Does Commercial Auto Insurance Cover Personal Use?

Does Commercial Auto Insurance Cover Personal Use?

Does Commercial Auto Insurance Cover Personal Use?

If you use a vehicle – such as a car or truck – for work purposes, then there’s a good chance you’ll need commercial auto insurance. But what happens if you decide to use that same vehicle for personal purposes? Will your commercial auto insurance cover you if there’s an accident on your own time? 

The answer is not always. It all depends on the policy. Here’s a look at commercial auto insurance vs. personal insurance, and when you might need both.    

What Is Commercial Auto Insurance?

Commercial auto insurance, or business auto insurance, covers vehicles owned or used by a business. A commercial auto insurance policy usually includes:

  • Collision coverage
  • Medical expenses protection
  • Personal injury cover
  • Property damage
  • Uninsured motorist coverage 

For example, say you have an accident while using a company car for business purposes. Commercial auto insurance covers bodily harm or property damage sustained during the crash. 

Who can use commercial auto insurance? Well, your policy can cover anyone who regularly drives a commercial vehicle, including family members and employees. 

Who Needs Commercial Auto Insurance?

Not every business owner needs commercial auto insurance. If you mainly use your car for personal reasons, including commuting, you probably don’t need this level of coverage. 

However, you most likely do need it if you use a vehicle for work-related purposes. Work-related purposes include transporting goods for money or driving to job sites on a daily basis. Here are some examples of who should carry commercial auto insurance: 

  • Bakeries 
  • Couriers 
  • Driving instructors
  • Electricians
  • Gardeners  
  • Personal trainers
  • Plumbers 
  • Sales representatives
  • Trucking companies 

What Is the Difference Between Personal and Commercial Auto Insurance?

Personal and commercial auto insurance are similar products. However, there are some key differences. 

  • Everyone who drives a vehicle in the US needs personal auto insurance. Only certain individuals – such as business owners – need commercial insurance. 
  • Commercial policies usually offer higher coverage limits than personal insurance policies. 
  • Personal insurance may not be sufficient to cover heavy or specialist vehicles, given the damage they may cause if there’s an accident. 

Commercial vs. Personal Auto Insurance Cost

Commercial insurance policies can cost more than personal auto insurance. Why? Because the coverage is often more extensive, Investopedia explains. Costs are based on various factors, such as employee driving records. 

However, as with any type of insurance policy, it pays to shop around. InsurePro can help you find the most cost-effective auto insurance for your needs.  

Does Commercial Auto Insurance Cover Personal Use?

In short, it can, but not always. Let’s break down the two main scenarios when commercial auto insurance will – and will not – cover personal use. 

Employees Using Personal Vehicles for Work Purposes

Commercial insurance may not cover employees who choose to use a personal vehicle to run a workplace errand. It usually only covers business vehicles listed on the policy. 

Employees Using a Vehicle Provided by the Company

If you give employees company cars, and you explain that they can use the vehicle for business and personal purposes, your commercial policy will cover personal use. 

To be clear, personal auto insurance won’t cover commercial use. So, if you decide to start using your own car regularly for business purposes, and you don’t take out commercial auto insurance, you may not be insured. 

Do I Need Both Commercial and Personal Auto Insurance?

A driver uses GPS map navigation on his cell phone for directions.

Not sure if you need both? As a summary, here’s how you can tell. 

  • Even if you drive to work every day, you don’t need commercial auto insurance on the vehicle unless you’re using it frequently throughout the day for work purposes. 
  • You do need commercial insurance if your company owns vehicles or you use a vehicle for work-related tasks.

If in doubt, check with your insurance provider.  

What Happens if I Don’t Have the Right Auto Insurance Policy?

Let’s say you have personal insurance but not commercial auto insurance. You start using your car for business purposes on a daily basis, but you don’t carry commercial auto insurance. 

If you have an accident while working, the policy may not cover any property or personal damage incurred. You could face higher insurance premiums and financial penalties, depending on what happens. 

Let Us Help You Choose the Right Commercial Auto Insurance Policy

Are you looking for commercial auto insurance? InsurePro can help. Our team of licensed experts can match you with a suitable insurance policy based on your needs, giving you more time to run your business rather than searching for insurance.    

Ready to get started? Get the best insurance policy for you!