Personal Vs. Commercial Auto Insurance: How Do They Differ?

When running a small business, it is sometimes hard to differentiate between items you use for work and items you use for personal use. If you use your personal car for business purposes, it can create problems when it comes to insuring the vehicle. At Action Insurance, we know how confusing auto insurance can be, so we have put together this comprehensive personal vs. commercial auto insurance breakdown to help clear things up.

Commercial Auto Insurance

Commercial auto insurance covers vehicles that are owned by the business. It is a comprehensive policy that protects your vehicle while you or your employees are behind the wheel when an incident occurs. What makes a commercial auto policy different from a personal policy is that it covers a wider range of vehicles. This is why it may be more beneficial to have a commercial auto policy when you have or run a small business, which will better protect your automobile. If your car is used primarily for business activities, you should get this policy. Commercial auto policies usually cover:

  • Heavy-duty vehicles that are used to carry equipment for business purposes
  • Tow vehicles
  • Vehicles that are used to deliver services for the business
  • Cars that are used to transport clients and employees
  • Goods transportation vehicles

What is Hired and Non-owned Auto Insurance?

A hired and non-owned insurance offers protection in case you are unfortunately involved in an accident while driving to work in your own personal vehicle. It also protects vehicles that are rented or taken on lease by your business. However, it will only cover legal bills entailing an accident without covering any vehicle damage.

Personal Auto Insurance

On the other hand, personal auto insurance only protects vehicles used for personal use. If you are involved in an accident while using your personal car for business use, you may be in serious trouble because your insurance does not cover such liabilities. Personal auto policies are not as comprehensive as commercial auto insurance and are more limited. It is not advisable to run vehicle-intensive businesses with your personal vehicle if all you have is personal auto insurance coverage. Some personal auto insurance policies include limited coverage for business-related activities for your car, but this is never enough in the event of a serious emergency.

Therefore, it is always advisable for you to have commercial auto insurance coverage for your business vehicles. This is because personal auto insurance will not have sufficient coverage for business-related activities. Without commercial auto insurance coverage, you will have to meet the expenses of serious liabilities out of your own pocket. This may cripple your finances and lead to your business’s untimely closure.

It may be tempting for you to use your personal vehicle for business purposes, but this can be incredibly risky if you do not have the proper insurance coverage. Work with an agency that can secure you the right auto insurance policy. Contact Action Insurance Group who can help you find reliable coverage for the right price.

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