How To Know When You Should Switch To Commercial Car Insurance

Small Business

It can be challenging at best to determine if a commercial auto policy is needed. Typically, if your vehicle is being used for tasks that are related to your occupation, your profession, or for a business (excluding your commute), you should consider a commercial policy. Here is more information regarding commercial insurance vs personal auto insurance to help you determine what you require.

What Does Commercial Insurance Cover?

Commercial vehicle insurance will cover physical damages and liability damages for situations that aren’t covered by personal auto insurance policies. Understanding the differences between a commercial auto insurance policy and a personal auto insurance policy will be valuable for your business.

Business insurance will cover a variety of situations and vehicles that are used in business. This includes fleets of vehicles, company cars, box trucks, dry vans, work vans, utility vehicles, and other commercial rigs.

The insurance may also cover some of the contents in some of the vehicles. It will be dependent on what the vehicle is being used for. Understanding when you should switch from a personal insurance policy to a commercial insurance policy is vital to managing your company safely.

Why Can’t I Use My Personal Policy?

Personal auto policies aren’t meant for commercial use. They’re rated and written up differently. Also, you’ll find that in business there are specifics that must be covered for your company vehicles that preclude your personal vehicle. If you’re in a wreck, you’ll want to make sure that you have the proper liability insurance for your commercial vehicles. Without this, you may wind up having to sell everything in order to cover your losses.

Are There State Requirements?

Liability insurance is required by most states. If you don’t have it, you may wind up with hefty fines and have to pay for repairs to other vehicles that are involved in a wreck with yours. You may wind up losing everything.

What Are Some Situations Where I Will Require Commercial Insurance?

Here are some situations wherein you’ll need to have commercial insurance:

Taxi drivers

Pickup or delivery services

Messenger services

Limo services

Vehicles that are registered as a partnership, business, commercial, corporations, or if the vehicle is rented or even leased by others.

Vehicles that have snowplows attached may also require commercial insurance.

Catering or cooking trucks


Hydraulic lift vehicles

Racing vehicles and equipment

Even if you have insurance for your personal vehicle, you’ll need to have commercial insurance in order to fulfill the requirements of the state wherein the business is located.

Just as a personal insurance auto policy, a commercial insurance policy is going to give coverage for Bodily injury, liability, death or dismemberment, at fault accidents, legal defenses (in most cases) and property liability. If you set the brake on your vehicle and it rolls away and hits another vehicle you’ll be covered as long as you have the right policy.

Commercial insurance breaks it down further to a Combined Single Limit or a CSL. These policies give the same limits and applications as a regular personal insurance policy.

Commercial policies also include medical payments, personal injury protection or PIP, and uninsured motorist coverages regardless of who was at fault for the wreck. If the other driver doesn’t have enough insurance, you’ll still be covered for any damages to your vehicle.

Many people use their personal vehicle to transport goods or people for money. If this is the case, you’re going to require commercial insurance and higher liability limits due to the very nature of your work.

I Use A Trailer, Will I Need Commercial Insurance?

If you’re hauling a trailer to take things to and from a worksite, you’ll require commercial insurance as well. If you’re using a trailer to haul work supplies to and from your worksite you’re going to need commercial insurance for both the vehicle and the trailer.

If the trailer were to break free, the company would be at fault, so you want to make sure that you’re covered for any type of emergency.

Any time that your vehicle is in the company name, you’re going to require commercial insurance. This protects you, as well as any employees driving your vehicle.

I’m Still Unsure If I Need Commercial Insurance

If you’re unsure of whether or not to have commercial or personal auto insurance on your policy, ask your insurance agent which way you should go, and why. Give them as much information as possible so that they can help you make the right decision.

It’s always wise to check with US insurance brokers Miami FL, every six months and see if you need more, fewer coverages or a different type of coverage. Sometimes the premiums will also change so shopping around is a good idea.

When you shop around to make sure to check with a few other agencies as well. Sometimes due to policy changes, you can find great deals.

Learn all that you can about what your particular insurance company covers and doesn’t. If you find a gap in the insurance be sure to inquire about it and find out if there is a gap-type policy that you can secure to help protect your interests.

Pay attention to deductibles and make sure that you’re keeping an eye on the amount so that you can have it set aside for emergencies. If you were to get into an accident you want to be able to pay that amount as quickly as possible.

Focus on ways to keep your premiums low. Always take the time to make sure that your insurance is up to date.  Following these suggestions will go far in helping you to determine whether or not you need to have commercial insurance on your vehicles or if your personal auto policy is good enough.

Always read the fine print and when in doubt, check it out and find out what your policy will and won’t cover. Not all policies are the same. Make sure to understand what your policy does and doesn’t cover to be sure that your commercial vehicles are fully covered.

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