What's the difference between commercial auto insurance vs personal cost? When shopping for auto coverage, when does it make more sense to buy commercial rather than a personal car insurance policy?
Commercial Auto Insurance vs Personal Cost
Once you find the car of your dreams, you need to determine the type and amount of insurance you need. This is not always as straightforward as it seems, since there are numerous types of auto insurance available.
Further complicating things is the type of economy that exists today. Now more than ever people are working multiple jobs, some of them as self-employed subcontractors. This can blur the line between commercial and personal use of many assets, including your vehicle. So what is the difference between commercial auto insurance vs personal cost?
Commercial Auto Insurance
If you are like one of the millions of Americans who has at least one job where you are self-employed, you probably use your car for work. In some circumstances, this may mean that you are best covered by a commercial auto insurance policy. Commercial polices tend to offer higher coverage limits, though they do come with increased premiums.
There are other perks to investing in a commercial policy, especially for companies concerned with loss and liability. Many policies also cover the contents and the mechanics of trailers that are hauled as part of your business, non-owned vehicle coverage for employees, and instant rental reimbursement. In addition, they tend to offer single-deductible options, which is ideal for those who use specialized equipment as part of their jobs that they would also like covered while commuting.
Personal Car Insurance Cost
There are two alternatives to commercial auto insurance: personal auto insurance and relying on commercial auto insurance vs personal cost. Personal auto insurance may be recommended for those who use their vehicles for work infrequently, and do not transport items or people as part of their business operation. If you get into an accident while on the job, as long as you have not violated any terms of your personal policy, it still covers you for damages. This can save you thousands of dollars.
Make sure you read your policy carefully, and ask your agent questions about the line between personal and commercial use. If the authorities or the insurance company decides that you were engaging in a business transaction at the time of the collision, or that you were using your vehicle for primarily work-related purposes, you may find that you are suddenly no longer covered - then commercial auto insurance vs personal cost difference might not seem that high.
Insurance companies can cancel policies altogether if they believe that an individual is misusing it. You can avoid this dangerous situation by speaking with an agent and letting them know exactly how you intend to use the vehicle.
Relying on commercial auto insurance vs personal cost alone is not recommended. In fact, in many jurisdictions, it is actually illegal. Personal cost would be driving without an adequate insurance policy, and relying on your own finances to cover your damage and that you cause to other vehicles, people, or property.
Should You Get Commercial Or Personal Auto Insurance?
When trying to determine if you should look into business auto insurance, you can ask yourself a few questions:
- Who owns the vehicle and who is the primary driver? Vehicles owned by a corporation and driven by an executive or an employee require commercial insurance. If you are self-employed with no staff, you may not need the comprehensive coverage.
- How is the vehicle used? If the car is used primarily for business reasons, you should get a commercial policy. People who only drive their car for short distances once or twice a week can probably rely on their personal policy.
- What type of vehicle is it? Large, heavy-duty vehicles, including those heavier than pick-up trucks, must have insurance with a commercial policy.
- What are your business requirements? In some industries, vehicles used for business use must be covered by a commercial policy, even if they are driven infrequently for business uses.
These questions above can help guide you to the right commercial auto insurance policy for you, but you need to be familiar with the rules and regulations of your industry and your municipality. Never try to "get away with" using a personal policy where legislation requires you to invest in a commercial one.
Commercial Auto Insurance vs Personal Cost - The Bottom Line
We hope this article on commercial auto insurance vs personal cost has been informative. Anyone on the road should have some form of auto insurance. This is the best way to protect your vehicle, and your bank account, should you find yourself in a collision or in another form of trouble on the road.
However, investing in the wrong type of plan can cost you a lot of money while still leaving you with inadequate coverage. Make sure you speak with an agent and consider the information above before you take the plunge and make a determination about the type of car insurance you purchase.
Further Reading On Business Auto Insurance
Read through helpful commercial auto insurance for small business to help you better understand polices you own or are buying.
- Business Auto Coverage Form
- Bobtail And Deadhead Coverage
- Bobtail And Physical Damage Insurance
- Bobtail Insurance vs Non-Trucking Liability
- Commercial Auto Insurance Hired And Non-Owned
- Commercial Auto Insurance vs Personal Cost