You may think commercial auto insurance only applies to vehicles owned by a business. However, this is not necessarily the case. Oftentimes, even a vehicle you own personally may need commercial coverage.
Understanding Commercial Vehicles and Commercial Auto Insurance
When businesses own vehicles, they likely have to buy commercial auto insurance. These policies contain specific protection for businesses and employee drivers. Coverage addresses the unique liability risks that business drivers face and pose to others on the road.
Personal Vehicles Used for Businesses
Sometimes, you might use your personal car in your line of business. For example, you might be a realtor who drives for work regularly. Or you might take courier jobs for businesses in your community.
Though the vehicle belongs to an individual, that doesn’t mean the business doesn’t have an investment in it. When you operate on their behalf, you become a liability to them. Therefore, they need protection as much as you do.
You might be able to add your car to your business's existing commercial auto policy through hired/non-owned auto coverage. It extends liability insurance to vehicles that the business does not own, but that operate on its behalf. However, commuting or doing the occasional errand usually doesn’t merit coverage.
Employees driving their own cars for business usually fall into this category. They will still have to maintain personal auto coverage, however. Hired/non-owned coverage only includes liability coverage. So, physical damage protection might still come from the employee's personal coverage.
If you are a sole proprietor, and the lines between your business and personal driving blurs, then you might have to buy a full commercial auto policy. It will apply both liability and physical damage protection to vehicle accidents.
Personal Vehicles that Require Commercial Insurance
Sometimes, you might have to buy a commercial auto policy even if you buy a vehicle solely for personal use. Often vehicles with significant weights classify as commercial under state law. These might include commercial passenger vans or large utility trucks. Therefore, you might have to buy a policy simply to address the higher operating risks that come with these vehicles.
To determine which policy you need, talk to your auto insurance provider. They can help you understand if you need a commercial auto policy.