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Personal vs. Commercial Auto Insurance

Many business owners may not understand the differences between commercial auto insurance and personal auto insurance. However, some key differences should be understood to avoid more significant issues down the road. Let's take a look at some of the key reasons. The two policies provide separate coverage and are not the same; however, they can be bundled as a package to save you or the employer additional money on the premium.

Some of the more obvious examples for requiring Commercial auto insurance are the necessity for small businesses to meet with their clients, transport equipment or products, or share company vehicle with employees. Also, keep in mind that if you are using your personal car for employer-related purposes, it is your employer's responsibility to insure any work-related driving you do for them. Your personal coverage will most likely not cover any claim related to a work incident.

There are fundamental differences between the two insurance policies. Commercial auto insurance policies usually have higher limits since a business may need more protection. Commercial auto insurance may also be tax-deductible where personal auto insurance is not. Personal policies generally do not cover things such as ride-sharing services. Suppose you are a ride-sharing provider and provide rides for Uber or Lyft. In that case, your policy must provide sufficient coverage, which can only be obtained with a commercial insurance policy. Also, Personal insurance policies will not cover food trucks or service trucks that carry tools such as ladders, toolboxes, or other equipment associated with the business.

Be aware: The risks of being sued due to a claim being denied for not carrying the proper insurance can be detrimental to your business and force the vehicle operator into a severe liability lawsuit if there are injuries where the victims could potentially sue and come after your assets.

Most types of commercial auto insurance are optional. However, depending on the state laws where your business operates, you might be required to purchase other types of policies such as workers' compensation insurance if you have employees or already have commercial auto insurance for a business-owned vehicle. If you are a commercial driver operating a business-owned vehicle, you must carry commercial auto insurance.

Personal auto insurance deals with your personal life. Commercial auto insurance deals with your entire business and the people who are employed or associated with the business. In the insurance company's eyes, the risks and liability factors are much more significant in a business scenario than they are for an individual, which is why policy limits and premiums have to be considerably higher for a business.

For More Information please reach out to the team here at CH.

Main office 315-234-7500


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