How Your Commercial Auto Insurance Coverage Compares to a Personal Auto Insurance Policy

Author: di_admin

Commercial auto insurance coverage can protect a company when dispatching drivers to execute a job. Auto insurance is essential for protecting your investment against common risk factors. But when it comes to business insurance, you must weigh the relative advantages and disadvantages of commercial insurance vs. personal coverage

Commercial Auto Insurance Coverage and How It Compares to Personal Auto Coverage

Knowing what type of insurance to go for can be challenging for a business owner. After all, the lines between personal and commercial vehicles are often blurred. But even if you already have personal coverage, it’s wise to invest in commercial auto if you use your vehicles for business purposes. 

Commercial and Personal Auto Insurance: How do They Differ? 

With small businesses, drawing the line between “personal” and “commercial” vehicles is often challenging. Many owners and employees of small enterprises routinely use their personal vehicles for work-related tasks. For instance, they often drive to and from work in their own cars and even use them to deliver stock or transport equipment.

But it’s important to note that most personal auto insurance policies exclude business usage. It means accidents when using a personal vehicle for work aren’t covered. The only exception in most cases is if the accident occurs while commuting to and from work.

Commercial and Personal Auto Insurance Compared 

Here’s a look at the most common types of auto insurance coverage: 

Commercial Auto Insurance

The most fundamental thing about commercial auto insurance is that it covers business vehicles. If your company owns the vehicle and only uses it for business purposes, it must protect it with a commercial insurance policy. 

It applies if they use the vehicle for the following purposes: 

  • Transporting goods or equipment
  • Driving employees or clients 
  • Performing services within the business’s scope 
  • Offering paid transport services, whether for goods or passengers 
  • Carrying heavy loads related to work
  • Towing trailers, equipment, and heavy machinery used for business

Commercial auto insurance generally offers higher compensation than personal auto insurance. They also cover different types of vehicles and protect policyholders against more complex legal situations.

Commercial insurance typically covers employees that are authorized to use the company vehicle. But the premiums will vary depending on the users’ driving records and the policy’s deductibles and coverage limits.

Personal Auto Insurance

Personal auto insurance generally covers only accidents while using the vehicle for personal reasons. It typically applies to using the vehicle for work commutes and trips unrelated to work functions. 

Personal auto insurance usually covers only the vehicle’s owner and up to two immediate members of the policyholder’s immediate family.

Most personal car insurance policies don’t cover any business use. If you get into an accident doing a work-related task and you get into an accident, the insurer will probably not honor your claim. 

There are cases wherein personal auto insurance might cover some types of business use. It is advisable to check with your insurer about specific coverages and exclusions.

Hired and Non-Owned Auto Insurance (HNOA)

There are cases wherein company owners or employees might use their personal vehicles for work-related functions. In such cases, hired and non-owned auto insurance (HNOA) might be feasible.

HNOA provides liability coverage for company owners or workers who get into an accident while using their vehicle for work-related tasks. It also covers accidents involving vehicles rented or leased by the company. If these scenarios are common in your company, HNOA might be a helpful supplement to commercial auto insurance. 

About Daniels Insurance, Inc.

At Daniels Insurance, Inc., we have a unique understanding of the risks that businesses like yours face on a regular basis. With the backing of our comprehensive coverages and our dedication to customer service and quick claims resolution, your business will be fully protected. For more information, contact us today at (855) 565-7616.