Commercial auto insurance or personal auto insurance? That is the question. How do you know which you need, and what defines a commercial vehicle?
Auto insurance carriers have specific guidelines that distinguish personal vehicles from commercial vehicles, but these lines blur when it comes to issues such as telecommuting.
If you’re driving your vehicle to and from work, you don’t need commercial coverage. However, if you use it in your job, or if you’re self-employed and use it for business, you’ll probably need a commercial policy – especially if you have passengers.
You definitely need commercial coverage if you transport people, products, food, or other goods; or if employees drive your vehicle. If you own a business, and a vehicle is in your business’ name, you’ll need commercial coverage, regardless of how often or how it’s used.
Be forewarned: If you list a commercially used vehicle on your personal auto policy, your insurer won’t pay the claim. This leaves you responsible for all accident-related expenses such as medical costs and property damage.
It’s also not uncommon to see claims and lawsuits skyrocket when people realize the involved vehicle is a commercial one. Without coverage this could cost you your business, and your home and other assets.
Commercial auto insurance isn’t that much more expensive than personal insurance, especially if usage is limited and you don’t transport people. But it’s worth the peace of mind, even if you never need to file a claim.