4 Things To Know About Commercial Vehicle InsuranceDo you use your vehicle for business purposes? Your personal car may not cover you. Why? Because if you or your employees use your personally insured vehicles for business purposes — other than commute — you may need a commercial auto policy to be properly protected. To make sure your work vehicle is ready for the road, learn more about commercial auto policies and how to protect yourself and your business when it comes time to file an insurance claim.
1. What is Commercial Vehicle Insurance?
In some ways, commercial vehicle insurance is similar to your personal auto policy. It includes coverage for liability, injury, collisions and uninsured or underinsured motorists much like your personal policy, as well as comprehensive insurance.
Commercial policies have higher liability limits than personal policies, however. They also can cover employees named on the policy or can offer blanket coverage for all employees of your business. Additionally, they also can include other specialized coverages, including:
- Non-owned vehicle coverage, which covers you when employees occasionally use their own personal vehicles for your business purposes
- Cargo coverage, which covers damage or theft of items your vehicle is hauling
- Trailer interchange coverage, which covers trailers towed by your vehicle that are owned by other businesses
- Hired vehicle coverage, which covers you if you rent vehicles for clients or employees
- Rental reimbursement, which covers the costs to rent a temporary replacement for your vehicle if it needs to be fixed
2. Do I Need Commercial Vehicle Insurance?
Insurance companies regard personal and commercial auto insurance as two very different types of policies because of the differences in risk. Some business uses violate the terms of your personal policy or simply aren’t covered, so it’s important to know when you need a separate policy.
You don’t need commercial auto insurance if you’re just using your personal vehicle on your commute to work. And if you occasionally use your car for business purposes, your insurance company might be able to tweak your personal policy — for added cost, of course — so that your work-based driving is covered. But you may need commercial auto insurance in the following cases.
- Your vehicle is owned or leased by a corporation or partnership, or your vehicle is registered and/or titled to a business.
- You use your vehicle for transport or delivery of goods in exchange for payment.
- You use your vehicle to transport people for a fee.
- Employees drive the vehicle for work.
- Your vehicle has work-specific equipment for your business, such as ladder racks, snowplows, winches, cooking/catering equipment, permanent toolboxes, racing equipment, or hydraulic lifts.
- Your vehicle is used to tow a trailer used to conduct business.
- Your vehicle is used to transport hazardous or flammable material.
- You frequently drive long distances to visit job sites or meet clients.
3. What Kind of Commercial Vehicle Insurance Do You Need?
Again, that depends on the business you operate or the extent of the use of your personal vehicle for work. Policies can be tailored to fit your needs; if you’re simply using your personal car to deliver newspapers or pizzas, for example, you probably don’t need coverage for towing trailers.
If your business vehicle is a large commercial machine (like a tow truck, dump truck, flatbed, cement truck, tractor trailer or semi-truck), you’re definitely going to need a commercial truck insurance policy. Such policies are required by law.
4. Does Commercial Vehicle Insurance Cover Personal Use?
Generally, yes. Personal use will be covered for company-owned vehicles as long as the company has commercial auto coverage.
–Written by Arnie Aurellano