Let’s be honest: many people don’t know the difference between auto insurance policies when it comes to personal and commercial vehicle plans. After all, they’re both vehicle protection, so they cover the same things, right? Wrong, actually. Commercial and personal car insurance policies are very different. Luckily, understanding their differences doesn’t have to be hard.
The vehicle policy differences
Most insurance providers offer personal and commercial auto policies. They are different policies from each other, even if the protection they offer is similar (more on that next). However, you can not have a personal policy on a commercial vehicle.
Insurance providers will not allow you to use your personal vehicle for commercial purposes, including gig drivers (rideshare, for example). The risks are different between personal and commercial use, so the policy is different in its protection, premium amounts, and more.
Another main difference between commercial and personal auto insurance is that the company that owns the vehicle is the one that is insured, rather than each individual employee. Since employees switch back and forth between commercial vehicles, it makes sense that the policy is designed to reflect the risk of various employees within the commercial setting.
The protection differences
The actual policy protection for commercial and personal vehicles is very similar. They both offer legal protection, liability protection, damage to the vehicle, medical expenses from a collision, etc.
The main difference in the protection is that commercial auto insurance typically offers more protection. Many policies offer higher liability limits, and they are designed specifically to protect insurance claims related to businesses or business operations.
If you were to use your personal vehicle to do business-related tasks, you could possibly have a claim denied if you were to submit one related specifically to work tasks. This is because you have a personal auto insurance policy, not a commercial one.
How do I know what kind of insurance I need?
The best way to understand the difference between commercial and auto insurance policies is that if you are using your vehicle for anything other than personal activities (commuting, running errands, etc.), you need commercial insurance. This includes something as “simple” as delivery drivers -- including those with utility trailers-- and as complex as contractors or other commercial commuting jobs.
The risks, protection, and premium prices will all be different between commercial and personal insurance.
If you want more information on all of the policy pros and cons, your best choice is to contact your local insurance agent, Harbour Insurance Services, and get some information on what is available. Independent and local agents are the best resource for accurate information on quotes for your area as well as your commercial insurance needs.
Having the right policy in place is essential for your own protection -- in multiple forms. The worst thing possible is to have to submit a claim for what an insurance company decides is a commercial claim when you have only a personal insurance policy in place.
Give your vehicle the protection you deserve with the right commercial policy in place for your needs!
Contact Harbour Insurance Services, at (281) 520-4090 with any questions or get started and Get a Free Quote here.