Figuring out who needs commercial auto insurance can be confusing, but we’re here to help. Although coverage availability and requirements vary by state, these are general factors to consider when deciding if you need commercial auto insurance:
- Vehicle Type: Does your business own any cars or trucks used for business purposes, or do you use any specialized vehicles such as a dump truck, box truck, cargo van, tow truck, or large semi truck with a weight over 20,000 pounds? If so, you need a commercial auto policy.
- Vehicle Ownership: If you own a vehicle registered under your business name, your personal auto insurance policy typically won’t cover it, and you’ll need to buy commercial auto insurance.
- Drivers: If your employees drive company vehicles or their personal vehicles for day-to-day business operations, like visiting job sites or transporting goods, you should have a commercial policy. You can also protect your business with hired and non-owned auto (HNOA) coverage, a type of commercial auto insurance that can also help cover auto accidents that happen while your employee is using their personal vehicle for business purposes.
- Vehicle Equipment: If you have permanently attached equipment to any of your business vehicles used for business purposes, make sure it’s covered by a commercial policy.
There are a few major differences between a personal auto policy and a commercial auto policy when it comes to what’s covered under each. A personal auto insurance policy protects you when you’re driving a car you use for commuting, driving around town or running personal errands. But it usually doesn’t offer enough protection if you’re a business owner. When operating a vehicle for business, it’s important to know the risks you face because they’re different and bigger. Learn more about what type of auto insurance coverage is right for you:
What’s the Difference Between Commercial and Personal Auto Insurance?
Commercial auto insurance coverage is needed if you’re using your company vehicles for business reasons. Typically, any of your employees with a valid license would be covered under this policy as additional insureds. It’s important to note that commercial auto insurance usually offers more comprehensive coverages, like higher liability limits.
Drivers often ask us, “Do I need commercial car insurance if I use my personal vehicle to drive to and from work?” The answer is usually “no,” because commuting is considered personal use.
You will need personal auto insurance coverage if you’re driving your car for personal reasons, including commuting to and from work. In most cases, personal auto insurance will not cover a vehicle that is used to operate a business. The coverage limits also tend to be lower.
Do I Need Commercial Vehicle Insurance and Personal Auto Insurance?
If you use your personal vehicle for business purposes or your business vehicle for personal reasons, you may want to consider having both commercial and personal auto insurance coverage. Most states require your company-owned vehicles to be covered by a commercial auto insurance policy. The type of policy(s) you need will largely depend on how the vehicle is titled and used.
For example, if one of your employees gets into a car accident on their way to complete a business errand for your company, you could be sued for bodily injury or property damage. While personal auto insurance wouldn’t cover you in this situation, having a
non-owned vehicle insurance policy would.
