Commercial vs. Personal Auto Insurance
Figuring out what kind of insurance — and how much — you need can be confusing. Use the following resources to help you decide whether personal auto insurance or commercial auto insurance is right for you.
Do you need a commercial policy?
Not sure whether you need a personal or commercial auto insurance policy? Here are some things to consider when deciding what kind of insurance policy you need:
- Who owns and drives the vehicle – If a business owns your vehicle, you'll most likely need a commercial auto insurance policy. If you're a sole proprietor, you might only need a personal auto insurance policy. The type of policy you need also depends on how often the vehicle is used and what it's used for.
- How the vehicle is used – If you use your vehicle for business purposes, you'll probably need a commercial auto insurance policy. If you're a sole proprietor who only travels to one or two job sites a day or uses your vehicle for commuting, you might only need a personal auto insurance policy.
- The type and weight of the vehicle – If the vehicle you drive is heavier than a normal size pickup or SUV — like a dump truck, tow truck, semi truck or commercial trailer — you might require a commercial auto insurance policy. Heavy-duty vehicles can cause more damage if they're involved in an accident and sometimes need special insurance coverages.
- Required business liability limits – If your business vehicle requires higher liability limits, you will probably need a commercial auto insurance policy. Commercial auto insurance policies typically offer higher limits than personal auto insurance policies.
How to determine if you need commercial auto insurance
Personal auto insurance policies can provide enough auto insurance coverage for some businesses, especially if you're also driving your vehicle for personal use. However, if you require specific commercial auto insurance coverages, high liability insurance limits, operate an unusual vehicle, haul special equipment, transport goods or people, or have other special needs, then you'll need commercial auto insurance.