You\u2019re used to carrying insurance on your vehicle, but if you\u2019re a business owner, your personal insurance might not be enough. Commercial auto insurance could be required, depending on your business and how your vehicles are used. So who needs commercial auto insurance?<\/p>\n
In order to determine if it\u2019s needed, it\u2019s helpful to understand what it is as well as what it\u2019s not. Like a personal auto policy, commercial vehicle insurance is intended to cover damage and injuries involving the covered vehicle. The main difference is that the amount of coverage, and the situations and usages that are covered, is more appropriate for vehicles used for business.<\/p>\n
Personal auto insurance is the type of insurance that is familiar to anyone who drives. At minimum, it covers liability in the event of an accident, and can also cover damage to your own vehicle as well as your personal medical expenses in an accident. However, if you are in an accident while using your vehicle for business, you will more-than-likely not be covered.
\nLiability limits are a common difference between the two types of policies. Businesses will very often need higher limits, and commercial insurance makes this available.<\/p>\n
You are probably aware if your business has a commercial truck, insurance for it will need to cover commercial use. What about other vehicles?
\nIf your vehicle\u2019s business use is limited to commuting to and from your business, personal auto insurance is probably adequate. If it is used for more than that, you just might need a commercial policy. Here are some questions to ask to decide if you will need business vehicle insurance:
\n\u2022 Do employees use the vehicle?
\n\u2022 Is it used to get to job sites or clients?
\n\u2022 Is it used to carry equipment or tools used in your business?
\n\u2022 Is it used to deliver goods?
\n\u2022 Is it used to carry passengers or other items for pay?
\n\u2022 Does it have equipment installed that is used for your business (e.g. winches, hydraulic lifts, etc.)?
\n\u2022 Is the vehicle owned by a business entity rather than a person?
\n\u2022 Is the vehicle significantly heavier than a typical passenger vehicle?
\nIf the answer is \u201cYes\u201d to one or more of those questions, you\u2019ll probably need commercial car insurance.<\/p>\n
A commercial auto policy will offer similar coverage to the personal policies that you\u2019re used to, but tailored to the needs of a business vehicle. The common coverage that you\u2019ll see includes:
\n\u2022 Liability \u2013 Coverage for damage to others\u2019 property and for injury to others.
\n\u2022 Collision \u2013 Coverage for damage to the business vehicle from an accident.
\n\u2022 Comprehensive \u2013 Coverage for damage to the business vehicle, other than from a collision.
\n\u2022 Personal injury \u2013 Coverage for your own or your employees\u2019 injuries resulting from an accident.
\n\u2022 Uninsured\/underinsured motorist \u2013 Covers accidents involving a driver who isn\u2019t adequately insured.
\n\u2022 Non-owned auto \u2013 This covers you or your employees when driving a vehicle that\u2019s rented or borrowed.
\nWhile there are additional coverages available, these are the types that are most common.<\/p>\n
If you drive for a ridesharing service like Uber or Lyft, you might need ridesharing insurance. The ridesharing companies do cover you while you are driving for them, but this coverage is only in effect from the time you accept a ride through the time you drop your passenger off. You won\u2019t be covered while you are waiting for a ride request. Rideshare insurance is intended to cover you during this period; additionally, it can help with the deductibles during the times you are covered by Uber or Lyft.<\/p>\n
The needs of a business differ in a lot of ways from those of the rest of us, and their auto insurance needs are no exception. If you own a business, not having the right insurance coverage could devastate your business in the event of an accident. This article should give you a better idea of whether you need it or not, but if you\u2019re still unsure, contact an insurance agent who can answer any questions you might have.<\/p>\n