Who Needs a Commercial Auto Insurance Policy and How to Get One: Your Biggest Questions Answered!

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Who Needs a Commercial Auto Insurance Policy and How to Get One: Your Biggest Questions Answered!

Who Needs a Commercial Auto Insurance Policy and How to Get One

Everyone needs to have insurance on their car – we all know that. It’s required by law, and we want to protect ourselves and those around us.

However, when you have a work vehicle it can be harder to understand what insurance coverage it needs. Can you add it to your regular policy? Does it need something different?

Vehicles used for work generally need to be on a separate commercial auto policy. Here’s how to know if your work vehicle falls into that category.

Once you know you need commercial car insurance, the next step is to figure out how to get it. The good news is that this coverage is pretty common.

Let’s get started!

Why is There a Commercial Auto Insurance Policy?

The first question you might ask is why does commercial driving insurance exist? Why don’t we just use one type of coverage for everything?

A vehicle used for work has very different risk exposure than a normal, daily car. Because insurance is designed to address risk, that means that commercial vehicles need separate coverage.

Some of the risks unique to work vehicles include:

  • The possibility of employee injury
  • Protection needed for work equipment
  • The likelihood that they are on the road – and at risk – a higher percentage of the time
  • Higher liability coverage needs

If a commercial vehicle is involved in an accident, there is a higher likelihood of a lawsuit. People believe companies have more money. That, in addition to the needs above, means that commercial insurance is separate from normal car insurance.

Who Needs Commercial Car Insurance?

If you use your work for both personal needs and work, does it qualify for commercial coverage? How much do you have to drive your car for work before it’s called “commercial?”

These are great questions. Because commercial car coverage is more expensive than normal car insurance, some people try to avoid having it applied.

However, keep in mind that the reason it’s a bit more expensive is that there is more coverage offered. You want to make sure that if work equipment is damaged, for instance, your insurance will cover it. Also, if you have a work vehicle on a personal policy, an accident may not be covered at all.

When Your Vehicle Needs Commercial Coverage

Here are some questions to ask to discover if you need a commercial auto policy:

  • Are any of your vehicles used for pickup or delivery of goods, including supplies, materials, newspaper, pizza, other food items, or for messenger services?
  • Are any of your vehicles registered or titled to a business, corporation, partnership, or DBA (Doing Business As)?
  • Are any of your vehicles a pickup, van, or utility vehicle with a gross weight exceeding 10,000 pounds, or do any of your vehicles have a rated load capacity over 2,000 pounds?
  • Do any employees or non-listed drivers drive any of your vehicles on a regular or occasional basis?
  • Do you use your vehicle for anything work-related other than commuting?

If you answered yes to any of these questions, you probably need a commercial policy. There are other standards too, such as if you have ladder racks, permanent tool boxes, cooking equipment, or other business modifications.

Remember, the reason you want commercial coverage is to make sure you have appropriate protection in case of an accident. A vehicle you use for business will generally be excluded from your personal policy.

Commercial Coverage Isn’t Just for Big Businesses

You might think that because you don’t have a large business or employees, you don’t need commercial coverage. That isn’t true. Remember, it’s based on the use of your car.

A small, one-person shuttle business needs commercial car insurance, just like a one-person landscaping firm or a pizza delivery driver. Don’t assume it’s just for the big companies!

If you have any questions about how your insurance company will view your vehicle – as personal or commercial – call them and ask. It’s better safe than sorry.

What Does Commercial Car Insurance Cover?

Once you have decided on commercial car coverage, it’s natural to wonder exactly what you’re getting. Commercial car insurance has some of the same features as personal policies. However, the limits are likely higher.

Here are some examples of commercial car insurance coverage:

  • Bodily injury liability – covers other peoples’ injuries
  • Property damage liability – covers other peoples’ property
  • Collision – pays for damage to your vehicle if your driver causes an accident
  • Comprehensive – pays for damage to your vehicle that are not due to collision
  • Uninsured/Underinsured – helps cover damages if the other driver has inadequate insurance
  • Medical payments – pays toward medical expenses for you and/or employees or passengers injured in an accident

In addition to these basic coverages, you will have specific business coverage. This includes protection for work equipment that might get damaged, specific vehicle modifications, and more.

How to Get a Commercial Auto Insurance Policy

So you’ve realized you need commercial car insurance. Now what? Where do you get it?

The good news is that most personal auto insurance companies also offer commercial coverage. You’ll generally have a separate policy with separate payments. Of course, this expense can be written off against your business taxes!

Even if your personal insurer has commercial coverage, you want to make sure you are getting the best rate. It pays to shop around.

Getting online quotes is convenient and easy. At Insured ASAP, we can get to know your business and find out exactly what you need. We can also make you aware of any discounts you are eligible for, so you get the best rates.

Do you need commercial insurance? If so, we’re here to help. Contact us today!

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