what is commercial insurance

What is Commercial Insurance for Vehicles and Who Needs Coverage?

There are a whopping 268 million cars on the road in the United States. That massive number makes the USA the second-biggest vehicle market on the planet.

If we can pull anything from that information, it’s that a lot of Americans like to drive. As a matter of fact, some people love driving so much that they’ve chosen to make a career out of it.

Truck drivers, delivery people, chauffeurs, rideshare drivers… There are no shortage of professions out there that get people behind the wheel and out on the road.

As driving-based professions pick up in popularity, many have asked us the question, “What is commercial insurance?”

To help you better understand the intricacies of commercial insurance policies and figure out if you need one, below, our team breaks down the most frequently asked commercial insurance queries.

What Is Commercial Insurance?

A commercial auto insurance policy covers a vehicle and the property inside of it from damage or theft. This is not dissimilar to how your personal auto insurance policy might work.

What makes commercial auto insurance different is the fact that it’s solely for vehicles that get leveraged for commercial or business purposes.

What Does a Commercial Auto Insurance Policy Cover?

When you have your commercial vehicle or “fleet” covered by a commercial auto insurance policy, you enjoy a variety of protections.

For starters, your local laws likely dictate the need for a minimum amount of commercial auto insurance coverage. Any reputable policy you buy in your market would put you in compliance with those laws.

Beyond being legally protected, when you have good commercial insurance coverage, you may enjoy the following:

  • Protection from injury liability
  • Protection from property liability
  • Personal injury coverage
  • Coverage for employee injuries
  • Uninsured motorist coverage
  • Loading and unloading liability protection
  • Protection from towing costs
  • Protection from the theft of commercial property inside of your vehicle
  • Loss of income protection while your vehicle is being repaired
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The above list is just an example of common policy terms. Be sure to assess your commercial auto insurance policy thoroughly to ensure you’re getting the coverage you need.

Who Needs Commercial Auto Insurance?

There are a lot of opinions on when one needs commercial auto insurance versus when somebody doesn’t need it. As a general rule, anytime you’re using your vehicle to make money, you’ll want to be covered by a commercial policy.

Some examples of jobs that in most situations would require a commercial auto insurance policy include:

  • Pulling freight
  • Towing cars
  • Delivering newspaper
  • Delivering goods or packages
  • Transporting people for commercial purposes
  • Moving heavy machinery
  • Moving equipment for a gardening or housekeeping business
  • Moving chemicals between job sites

When in doubt, call your personal insurance company and describe how your vehicle is being used. Ask if you would be covered if an accident were to occur when operating your vehicle under the pretenses in question.

Will My Personal Auto Insurance Policy Cover My Commercial Vehicle?

In most cases, the answer is no.

There are a virtually unlimited amount of stories of business owners who unwittingly thought their personal auto insurance policies would cover their commercial vehicle and were left out to dry after an accident.

Remember, when in doubt, contact your insurance company and ask.

The reason why insurance companies sell separate policies for commercial and personal vehicles is that the two kinds of vehicles present different liabilities to insurers.

If you get into an accident and your coverage is denied because your vehicle was operating in a commercial capacity, you could be liable to pay hundreds of thousands of dollars in medical expenses and property damage.

Where Can I Find Commercial Auto Insurance?

Commercial auto insurance may be sold through whatever company sells you your personal auto insurance.

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This is especially true if your driving-based job has you operating a standard vehicle and not truck.

If your job has you operating a big-rig, you’ll want to engage an insurance provider that deals specifically in big-rigs. You can read more here to get an example of the kind of company you should be engaging.

How Much Does Commercial Auto Insurance Cost?

The cost of commercial auto insurance will depend on your business and the kind of vehicle you’re using.

For example, if you’re operating a big-rig truck, your insurance policy will cost more than if you’re operating a compact car. That’s because the value of a big-rig truck and its damage potential far outweigh what could go wrong with a standard sized vehicle.

If you own a fleet of commercial vehicles, many insurers who specialize in commercial auto insurance will give you bulk rates that will allow you to bring your insurance burden down.

At the end of the day, you’ll want to get as many quotes from as many insurers as possible to find the best commercial coverage at the best price.

Wrapping Up What is Commercial Insurance for Vehicles and Who Needs Coverage

For those of you still wondering “what is commercial insurance”, in summary, commercial insurance is an auto policy that is custom built for vehicles that operate for commercial purposes.

It’s important to note that, even if you’re operating your vehicle only part-time for business, your personal insurance policy may not cover you.

For that reason, when in doubt, always contact your insurance provider and find out if you’re covered. If you’re not, buy a new policy or upgrade your existing one to keep your livelihood safe.

Want more information on everything from vehicle repairs to insurance information and beyond? If so, read more of our content on Certified Master Tech today!