Many people are still confused and find it difficult to differentiate between personal and commercial auto insurance. You must know what makes each type of insurance different, especially if you run your own business.
When you have a small business, the line that separates personal and commercial vehicle insurance can often be blurry. In some cases, small business owners may use their cars to travel to work-related destinations or transport goods and services.
If you find yourself using your vehicles to do business-related work, you might want to reconsider this decision as personal auto-insurance policies won’t cover any accidents if you utilize your car for business use.
If you’re still unsure about the dissimilarities between personal and commercial car insurance, keep reading. In this article, we will break down all the basics between personal and commercial auto insurance, so you stay aware and know what to do with your vehicles. Lets’s begin!
Commercial Auto Insurance
The most significant difference between personal and commercial car insurance is the ownership of the vehicle. When your business owns a car, it should be covered by commercial auto insurance.
1. Legal and medical bills
With commercial auto insurance, the policies included cover accidents that may occur while you or other employees use the company vehicle. Although both car insurance policies cover medical and legal bills related to vehicular accidents, commercial auto insurance also covers more complex legal issues and higher claims.
2. Protects employees
Additionally, it is standard that commercial auto insurance policies protect all your employees as additional beneficiaries, which ultimately means that whoever uses the company vehicle is covered as long as they have a valid license.
If you own a vehicle, but it’s primarily used for business, you may need to pursue this type of car insurance because it has higher liability limits than personal insurance. This type of insurance can protect vehicles that transport goods or equipment, drive clients and employees, haul heavy, work-related loads, and more.
Personal Auto Insurance
One of the most important things that you should remember when you use your car for business-related work is that personal auto insurance policies only cover personal-related reasons. These reasons include commuting to and from unrelated job travels.
Besides that, the insurance policy also covers one or two immediate family members, ensuring that they are protected should they be involved in any accidents.
1. Business use is not covered
Personal auto insurance was crafted strictly for personally owned vehicles, excluding business use entirely. If you get into an accident while doing business-related work, such as transporting goods, your claim will most likely be rejected.
Since this policy has less coverage, it’s less costly than commercial car insurance. However, some personal policies may offer limited business coverage. For this, it’s best to discuss the inclusions with a reputable insurance agent to find out what is and isn’t covered.
Hired and non-owned auto insurance
In some cases, you or your employees have no choice but to use personal vehicles to run work tasks. If that’s the case, you might want to consider purchasing hired and non-owned auto insurance. This “in-between” policy provides liability coverage when you get into an accident in your car while doing work-related tasks.
Hired and non-owned auto insurance provides coverage for business-rented vehicles and covers legal bills resulting from the accidents. However, you should know that it doesn’t cover vehicle damage.
Conclusion
Now that you know the difference between personal and commercial auto insurance, you’ll be able to be more responsible about the vehicle you choose to use for work-related errands. By speaking to a reliable insurance agency, you can purchase the right type of car insurance your business needs. This way, you, your employees, and business will remain protected and covered should there be any accidents on the road.
If you want to purchase car insurance, look no further; Quesurance is here to help you. We are a superior insurance agency that serves Hopatcong and the surrounding New Jersey communities. We provide personal and commercial insurance, business insurance, home insurance, and more. Get a free consultation from us today!
