What is the difference between a commercial auto insurance policy and a personal auto insurance policy? Do they not cover the same thing? Why does a business need a commercial auto insurance plan anyway? This is a common question that is asked. For those who are confused if they meet the criteria for commercial auto insurance or if their personal auto insurance is fine, InsureWise will break down the two types of insurance policies and help bring better understanding to who needs commercial auto insurance.
Automobile Insurance Coverage
When comparing the two types of auto insurance policies, both will cover the basic legal expenses, bodily injury, and property damage. What make the coverage a bit different is that a commercial auto insurance policy covers higher claims, different types of vehicles than is common and helps with more complex legal issues. Additionally, a commercial auto insurance policy will cover all of your employees with a driver’s license and you do not need a policy for each individual employee.
Who is Insured Under an Auto Policy?
A personal auto insurance policy covers those who are listed on the policy. A commercial auto insurance policy covers the business and their drivers. Certain businesses requires employees to be on the road. Some of the business models that should have commercial auto insurance are businesses that:
• Transport Goods, Product or Equipment
• Drives or Transports Client or Employees
• Charges Passengers or Goods a Fee for Transportation
• Tow Trailers, Haul Heavy Equipment
Is Commercial Auto Insurance Necessary?
If a vehicle is used as part of running a business, you do not want personal auto insurance, even if a personal vehicle is being used. These business models should and often require you to have a commercial auto insurance policy. If you were driving you own vehicle and your company doesn’t provide commercial auto insurance coverage and you were in an accident preforming work duties, you will not be covered by your company. You will need to apply your personal auto insurance in this scenario even if you were on the road for work reasons. If a job puts you on the road, your company needs to have a commercial auto insurance to protect you while you are on the road for work.
What Affects Auto Insurance Rates?
Commercial auto insurance often costs more since a company is seeking coverage for all of their vehicles and drivers. A personal insurance only covers the vehicles and number of drivers on the policy which will cause the cost of the policy to change. A commercial auto insurance works in a similar way in the sense that the scale of the business and its risk factors will determine the policy’s cost. A commercial auto insurance policy is determined on a few factors such as:
• Business Risk Factors
• Types of Vehicles Used
• The number of Vehicles and How Often They Are Driven
• Employee Driving Records and Auto Insurance Claim History
• Types of Coverage and the Policy Limit you Choose
Not all commercial auto insurance policies will be expensive. Depending on the nature of the business and what factors come into play, your commercial auto insurance can be very low.
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If your business requires a commercial auto insurance plan, or you need personal auto insurance, InsureWise can help. We provide a wide range when it comes to insurance protection policies and can ensure you are properly protected. For quality insurance policies, contact InsureWise today or click here to submit a quick and easy quote form.
