When Do You Need Commercial Auto Insurance?

If you regularly use your truck in the conduct of your business or have purchased vehicles specifically for your business, then personal auto insurance is not the correct coverage. You’ll need to purchase commercial auto insurance (also known as business auto insurance).

Personal auto insurance is meant to cover your every day, non-business driving. When you use your car or truck regularly for business, that requires commercial auto insurance, which is calculated differently than personal auto insurance.

Commercial auto insurance and personal auto insurance have a lot in common. They tend to offer similar types of coverages, though commercial auto insurance policies may provide higher coverage limits. Common commercial auto insurance coverages include:

  • Bodily injury
  • Property damage
  • Combined single limit (both bodily injury and property damage)
  • Medical payments
  • Uninsured motorist coverage
  • Comprehensive physical damage
  • Collision coverage
  • Hired Auto (very important)
  • Non-Owned Auto (very important)
  • Symbol 1 liability when needed by contract

So, how do you tell when you need commercial auto insurance vs. personal auto insurance? That can be a tricky question, especially if you use a single vehicle for both personal and commercial use.

If you purchase a vehicle specifically for use at your business – such as a delivery truck, a truck used to travel to job sites, or a vehicle used to transport clients – then this should definitely be covered under a commercial auto insurance policy. Commercial auto insurance is also required when you use your vehicle to regularly transport goods or people for a fee, conduct service (ex. you have a mobile pet cleaning van), or to haul special tools or a trailer that is used to conduct business. You should also purchase commercial auto insurance if employees drive the vehicle as part of the business, OR if they drive their own vehicles as part of your business.  Further, if you rent or lease vehicles for business use, then a commercial auto policy is a necessity.

One instance where you do not need to purchase commercial auto insurance is if you primarily use your vehicle to commute to and from your place of business, such as a single office location.

A good way to figure out if you need commercial auto insurance is to ask yourself this question – aside from commuting to and from work, do I regularly need my vehicle to operate my business? If the answer is yes, you should probably sit down with an insurance agent to discuss commercial auto insurance options.

At Fusco & Orsini Insurance Services, we’d be glad to help you determine if you need commercial auto insurance and what type of policy coverages would be best for your budget and your situation. To learn more about commercial auto insurance (aka business auto insurance) call us at (858) 384-1506 or contact us through our website.

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