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Drive at Work? You May Need Commercial Car Insurance.

See why your personal car insurance might not cover you 

Do you regularly use your own car for business purposes? Do you deliver food orders, drive for a gig app or give rides to clients? If so, you may need commercial car insurance.   

What is commercial car insurance? 

Commercial car insurance is a lot like personal car insurance

The big differences are: 

  • Commercial car insurance provides more coverage than a policy for a personal car. It may cover a fleet of vehicles, as well as provide coverage for several named employees. 
    • It usually has higher coverage limits, or the maximum amount that the insurer will pay for damages and injuries in a claim. The limits on a commercial policy usually start at $1 million.  
    • It offers more coverage. That’s why the premiums for commercial car insurance in Washington can be double the cost of a personal auto policy; however, that will depend on the use. A landscaper, for example, would tend to pay a higher rate than a lower-risk job, like a traveling business consultant.  

Why do I need commercial car insurance?

Two woman carrying baked good to a delivery, to illustrate the need for commercial car insurance.
If you are using your personal van, car, truck or SUV to deliver goods or materials, you will need commercial car insurance. Get in touch with a AAA Washington insurance agent to learn more. Photo: AdobeStock

Your personal car insurance — unless you’re just commuting to work — may not cover you in an accident. 

The problem is that personal car insurance policies often won’t allow you to use your car for many work-related or business purposes. If you get into an accident while on the job, the insurance company may not pay the damage claim in a lot of scenarios. 

Here are just a few types of workers who often need commercial insurance: 

  • Contactors who transport materials to a job site in their personal trucks 
  • Delivery drivers, including those who drive for gig apps 
  • Realtors who routinely take clients around in their car to see homes for sale
  • Truckers

Tip: AAA Washington offers commercial car insurance through its partner providers. Contact a AAA Washington insurance agent today to get a commercial car insurance quote. 

Do I always need commercial car insurance?

commercial car man loading props adobestock adobestock
A wide variety of professions require small business owners to get specialized insurance. Photo: AdobeStock

You don’t need commercial car insurance if you’re simply commuting to work. And if you occasionally use your car for business purposes, you may be able to tweak your personal auto policy — for an added cost — so that your work-based driving is covered. 

But you typically do need commercial car insurance in the following cases:

  • Your car is owned or leased by a corporation or partnership, registered and/or titled to a business.
  • You use your car to carry or deliver goods in exchange for pay. 
  • You use your car to drive passengers for a fee.
  • Employees drive the car for work-related tasks.
  • Your truck has work-specific equipment for your business, such as ladder racks, snowplows, winches, cooking/catering equipment, permanent toolboxes, racing equipment or hydraulic lifts.
  • Your truck is used to tow a trailer used to conduct business.
  • You transport hazardous or flammable materials.
  • You frequently drive long distances to visit job sites or meet clients.

What does commercial auto insurance cover? 

An electrical contract stands behind his van full of tools, to illustrate the need for commercial car insurance.
Commercial auto insurance differs from personal car insurance in that it provides more protection and also costs more. Photo: AdobeStock

Commercial car insurance is similar to personal car insurance in what it covers. 

The main categories of commercial car insurance coverage are collision, comprehensive and liability insurance.

  1. Collision insurance covers damage to the car in an accident where you or one of your employees has an accident.
  2. Comprehensive insurance covers damage to the car in scenarios that are typically out of the driver’s control, such as storm damage, theft and vandalism, and collisions with animals. 
  3. Liability insurance will pay claims to other people when you or one of your employees is at fault for an accident. Liability insurance is mandatory in Washington and Idaho for company-owned fleet cars and trucks, as well as personal vehicles used for work purposes. 

Tip: AAA Washington recommends increasing your liability coverage to equal the value of the business. You can do that by obtaining a commercial umbrella policy that increases the liability coverage on your commercial car insurance and other business coverage simultaneously.

Specialized coverage 

Commercial car insurance can also include other specialized insurance that you won’t find on personal car insurance policies. These can include: 

  • Non-owned vehicle coverage covers you when employees use their cars for your business purposes;
  • Cargo coverage covers damage or theft of items that you are hauling;
  • Trailer interchange coverage covers trailers towed by your vehicle that  other businesses own;
  • Rental reimbursement covers the costs to rent a temporary replacement for your vehicle if it needs to be fixed due to a covered loss. 

Is commercial vehicle insurance required?

AAA Washington can help you get car insurance for your small business. including florists
Contact a AAA Washington agent to get the best commercial auto insurance for your needs. Photo: AdobeStock

Every type of car, truck and SUV can be insured by a commercial car policy. Some vehicle types, like big commercial trucks and industrial vehicles, require commercial insurance. Company fleet cars owned will always require commercial insurance.  

The use of personal cars can be a gray area. But typically, if you’re using your car routinely at work to transport people or materials, you’ll need commercial car insurance. 

Does commercial car insurance cover personal use?

Generally, yes. Personal use will be covered for company-owned cars as long as the company has commercial car coverage and is rated for both commercial and personal use. 

It is not always clear if you need commercial car insurance for work-related driving or for a small business. Because commercial car insurance can be more complex, it is also not a good idea to try rely on online quotes. This is when a trusted expert can help you to find the best policy at the right price.  Get in touch with an experienced AAA Insurance agent to discuss all your options. 

—Written by AAA Washington staff 

—Top photo: AdobeStock

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