Commercial auto insurance and private auto insurance are similar in so many ways, but there are differences. For example, if your business owns the vehicle, then you have to use a commercial auto insurance provider.

If your private vehicle is registered to you, even if you own a business, then you need private auto insurance for that vehicle. Deciding if you need a commercial auto insurance provider or you need a private auto insurance provider hinges on a few factors.

The Main Differences

There are a few key differences between a commercial auto insurance plan and a personal auto insurance plan including:

• Who drives the vehicle?
• What the vehicle is used for.
• Business liability limits.
• Size of the vehicle.

Personal insurance plans do not cover the number of drivers not living in the same household, but a commercial plan can. For example, your personal vehicle is used by you and other drivers in your household listed on the policy. Commercial policies are more flexible when it comes to who is driving the work truck.

Personal-use vehicles typically travel less than commercial-use vehicles. Personal vehicles are usually at less risk of accidents and damage. About one quarter of truck accidents are due to driver error. This is a consideration when a commercial auto provider is issuing a policy.

Private passenger vehicles are typically smaller in size and less expensive than commercial vehicles. Private personal insurance will not cover damage to commercial trucks and other large-sized commercial-use vehicles.

Limits of Liability

Each state sets the liability limit requirements for vehicle insurance. In most states, business liability requirements are set higher than private vehicle limit requirements. A commercial policy provides a higher level of liability limits to better protect a business from being held financially responsible for an accident.

Do You Need a Commercial Vehicle Policy?

Having the right coverage in place to protect your business from liability is essential. If your vehicles are registered in your business name, have multiple drivers, and are used for deliveries and other services, you need to connect with a commercial insurance provider. The right plan will be affordable and provide the protection your business can depend on.