What is the difference between personal and commercial car insurance?
Personal car insurance only covers claims related to the personal use of a vehicle. This includes commuting to and from work. They have lower insurance limits and cost less than commercial car insurance. Insurance companies will deny personal claims on car insurance for accidents that occur when a vehicle is used for business purposes.
Commercial car insurance is designed for business-owned vehicles that tend to cover more land. They usually have higher insurance limits and higher premiums due to the increased risk.
Who needs commercial car insurance?
If one or more vehicles are used to perform tasks related to your profession or business other than commuting, you probably need commercial car insurance. This coverage is needed when vehicles are:
- Owned by a company or partnership
- Perform a service
- Transport of people or goods for a fee
- Transport of customers or employees
- Transport tools or equipment used to carry out business
- Towing a trailer used for doing business
- Driving to and from workplaces
- Driven by employees during work
What does commercial car insurance cover?
Commercial car insurance covers the cost of accidents with commercial vehicles. It covers the following types of coverage:
- Liability for car accidents : Liability insurance pays for damages in an accident you or your employee caused, including medical bills and property damage. It also covers your legal costs in the event that you are sued.
- Medical: This coverage pays medical expenses if you, your employee and / or passengers are injured in an accident. It kicks in no matter who was wrong for the crash.
- Collision and vehicle damage: This insurance protects you financially against damage to the vehicle caused by bad weather, vandalism or collision with an object.
- Uninsured motorist: Despite state laws against it, one in eight drivers in the United States drives without the mandatory minimum insurance, according to Insurance Research Council . Uninsured motorist cover protects you if an uninsured driver causes a collision with a company vehicle.
What happens if the vehicles you use in business are not owned by the company?
If you rent or lease your vehicles or if you or your employees use personally owned vehicles for business purposes, commercial car insurance will not protect you. In that case, you need rented and non-owned car insurance. Personal car insurance does not cover accidents that occur when a vehicle is used for business purposes. Having employed and non-owned car insurance can help you and your employees protect you from personal liability for accidents.