Differences Between Auto Insurance and Commercial Auto Insurance

 car insurance

If, like many Americans, you’ve been using the family car for purposes that could be considered commercial use, you may want to sit yourself down and look over your insurance policy.

There are things you’ll need to consider when buying a commercial policy or making sure that your existing personal auto policy covers the vehicle for business use. Whether or not you need a commercial policy depends on how you use your vehicle and what company you have it insured with. Every company has different guidelines and may surcharge for business-use coverage on a personal auto policy.

If you’re unsure whether business use is covered on your personal insurance policy, it’s important to call your insurance company or agent. Ask yourself these questions, before anything else:

How do companies determine commercial use? 

One definition may include "engaging in transporting goods for compensation or a fee," which may include catering, door-to-door consulting services, newspaper delivery, landscaping, logging business, pizza, daycare or church van services, or even farm-to-market delivery. People who do these kinds of work are strongly encouraged to purchase a commercial vehicle policy.

Do you need more liability coverage than a personal auto policy provides? Generally, a commercial auto policy offers higher limits of liability, but less or no coverage in areas that are typically not associated with commercial auto risks.

Do you need special coverage for situations encountered while conducting business? Commercial auto policies usually offer these kinds of coverage, and they’re normally not available with personal auto policies. These include hired and no owned auto coverage and coverage for towing a trailer for business use.

Do you need to list any employees as drivers? Commercial auto policies allow you to list anyone that you employ. You don’t have that option with a personal auto policy. In general, you’ll need commercial auto coverage if the vehicle you use is owned by a corporate partnership or driven by employees, or if it’s used to haul tools or equipment weighing more than 500 pounds, make deliveries or heavy enough to require state or federal filings.

The differences between commercial and personal car insurance

The differences between commercial and personal auto insurance are many, but the main distinctions lie in extent and purpose of coverage. After all, businesses have many concerns private individuals don't share, such as increased liability risks. Besides having higher liability limits, commercial car insurance also includes these kinds of coverage:

  • Any auto liability — this coverage extends the liability coverage you have on existing commercial vehicles to any new vehicles you purchase, as well as hired and non-owned vehicles
  • Trailer interchange insurance — this insurance covers non-owned trailers you haul under a trailer interchange agreement
  • Rental reimbursement with downtime — this coverage helps cover the costs incurred to temporarily replace an inoperable commercial vehicle
  • Single-deductible options — if you haul a trailer or use other specialized (and probably expensive) equipment for work, you can extend it to cover those items and only pay your deductible once for claims on both the vehicle and trailer
  • Individual named insured coverage — allows you to extend your commercial coverage to protect you when you drive a vehicle you don't own
  • Non-owned vehicle coverage — protects you and your employees while driving vehicles not owned by your company


We at Quote Texas Insurance offer commercial automobile insurance policies that you can truly depend on. We get quality policies from the top 65 rated carriers in the industry using our unique 8-step process. Whether you have trucks, vans, trailers, buses, or construction and equipment, we make it easy for you to choose the most cost-effective policy for your important investments. If you are in Texas, don't hesitate! Call us now at 844-402-4464 to know how we can give you simple solutions to life’s complicated insurance problems.

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