Can a Personal Auto Insurance Policy Provide Coverage for my Business Vehicle?

A delivery man inside a delivery van

Getting commercial auto insurance for your vehicle is of utmost importance. However, many business owners still believe that this is not necessary and that their personal auto insurance policy covers them for work-related uses of their vehicle. But nothing could be further from the truth. If you are running a business and you are using your vehicle for commercial purposes, a personal auto insurance is likely not enough to provide you comprehensive coverage in the event of a mishap.

Imagine a four-car pileup where one of the vehicles is owned by a florist delivering flowers to a client. After investigating the crash, the florist’s insurance company is not likely to honor the claim filed by that person for the simple reason that they were carrying commercial goods meant to be sold.

Many factors are considered by insurance agents when they are deciding whether to approve or deny an insurance claim. The beauty of a commercial auto insurance policy is that many risks can be underwritten for vehicles used for business-related purposes. After all, commercial vehicles are exposed to a lot of risks that privately driven vehicles are not exposed to.

Benefits of a commercial auto insurance policy

Like a personal auto insurance policy, a commercial auto insurance policy also provides financial coverage for the repair or replacement of vehicles that are damaged in accidents, in addition to paying the claims of people who may have been injured during the mishaps.

However, a commercial auto insurance policy offers a number of other advantages:

  • Your insurance’s liability coverage can be extended to any new vehicle you end up owning.
  • You can also extend the coverage to provide protection for you or your employee when you are using vehicles that don’t belong to your company.
  • Coverage can also be provided for the costs you incur while your commercial vehicle is under repair or in the process of being replaced.

Who needs commercial auto insurance?

It is true that in some instances, a personal auto insurance will be enough for a business vehicle. For instance, if you only use your car to drive from home to your main place of work, then a personal auto insurance is enough as this is considered commuting. Driving your vehicle to other locations as required by your work or business, however, can be considered commercial use, depending on how often you use your vehicle and depending on your agreement with your insurance company.

If you are wary of these gray areas and if you don’t want to end up arguing with your insurance provider about whether your vehicle is used more for personal or for business use, then choosing commercial auto insurance at the outset might be a good idea.

In general, you should get commercial auto insurance if you fit the following criteria: 

  • If your vehicle is being driven by your employees or is registered under your company
  • If your vehicle is used in the delivery or pick-up of commercial goods
  • If you are using your vehicle as a taxi or providing limousine or shuttle services to transport people
  • If your vehicle is leased or rented to other people
  • If the vehicle is used in selling, repairing, and other services for the purpose of receiving compensation
  • If the vehicle has equipment used to provide commercial services, e.g. snowplowing, cooking, cleaning, etc.

If you are still uncertain whether your vehicle needs commercial auto insurance or not, don’t worry. Quote Texas Insurance Insurance is here to help you design an appropriate insurance policy that will meet all your needs as a small business owner.

For more information, please call us at 844-402-4464. Our team of insurance professionals will be more than happy to help you get started on acquiring protection for your business vehicle.