Although personal and commercial auto insurance policies are similar when it comes to coverage, there are stark differences when it comes to the circumstances of coverage. Commercial auto insurance will only cover vehicles that are owned by a business or used for work purposes. These vehicles are generally known as commercial vehicles.
In order to ensure adequate protection, you need to figure out whether your car is a personal vehicle or a commercial vehicle. While the line may be hazy, there are a few key points that insurance companies will cite to classify a car as a commercial auto:
You use your car to pick up work supplies or deliver goods
You perform business services in your car for pay
You use your car to travel between work locations
You use your car to visit clients
The last two points can be a little hazy. If you run a graphic design business — and you usually deal with clients entirely online — but a client wants to meet in person, that one-off visit might not mean that you now own a company car. But if you make a regular habit of it, then you might be better off with commercial auto insurance than a standard personal vehicle policy.
The difference may seem trivial, but it's quite important. If you are in an accident while performing work-related duties in your car, and you do not have a commercial auto insurance policy in place, then your insurer may choose not to cover the damages.
If you use your personal vehicle for business on an occasional basis, you might not need to get covered under a commercial policy. But you should talk to your insurer and let them know that you might make a delivery or visit a client now and then, so that they can make a note of it.
What is a Commercial Vehicle?
Essentially any vehicle can be a commercial vehicle. The most common commercial vehicles are certain trucks and vans, but normal cars can also be commercial vehicles if used for work.
It is crucial to find the right insurance for your vehicle. Insuring your car with the wrong insurance can leave you with gaps in your coverage when it comes time to file a claim. Connect with your insurance agent and discuss your auto insurance needs whether you have a personal or commercial vehicle.