A commercial auto insurance policy is an insurance policy that covers vehicles used for commercial use. It is possible to have a car that serves both personal and business needs for you.
If you have a car that helps you commute to and from work, yet use it in the evenings for Uber or Lyft, it automatically becomes a business vehicle, requiring a business car insurance policy.
Can A Personal Car Use Commercial Auto Insurance?
Yes, depending on its function. Therefore, if your car serves both personal and commercial purposes, you cannot dismiss any part of it. The question of the type of insurance to use for your car is solely dependent on the function of your car.
In this case, your car is a business vehicle to the extent it conducts commercial functions and should be insured under commercial auto insurance.
You Need Commercial Auto Insurance if…
You Offer Any Transport Services Using Your Car
If you use your car to offer services like deliveries, Uber, or hauling, your car is a business vehicle. Therefore, even if you use it for your errands, or you initially bought it for personal use as its main function, it should be under commercial auto insurance.
Your Car Is Operated By Your Employees
You must purchase a commercial car insurance policy if you allow your employees to use your car. Whether or not your car is a business vehicle, if you involve your employees in driving it, it automatically qualifies as a commercial use car.
Your Car’s Ownership Name Is A Company Name
Another instance in which you must purchase business car insurance is if your car’s ownership is in a company or business name. Even if you use it for personal errands, it is identified as a business car.
Why Commercial Auto Insurance Over Personal Auto Insurance?
First, commercial car insurance will have more coverage than a personal cover. While personal auto insurance only covers you as the driver of the car, commercial car insurance will cover you, and your business. This includes; passengers, other drivers, and your employees.
Secondly, commercial car insurance covers liability as well. If you cause damage to other valuables in a collision or accident, your commercial car insurance will cover it, unlike personal auto insurance.
Also, business car insurance offers you more protection because it also covers costs that may occur following an accident and damage to other cars.
Under their collision protection, it does not matter whose fault a collision is; the insurance will cover even the other car’s damage repair costs.
While you may rely on luck to never cause an accident, did you know that it is illegal to operate a business vehicle without commercial auto insurance? If you are caught, you might have to pay high fines or lose your license.
In case of an accident, you use more money out of your pocket to cover expenses that are not covered in personal auto insurance.