Insurance policies can be a bit overwhelming and confusing especially when it comes to businesses. If you are running a certain type of business and it involves using cars, such as for the delivery of goods in delivery trucks or for passenger transport such as through taxis and limousines, you have to purchase commercial auto insurance for those vehicles. While a lot of individuals have an idea what car insurance is, many are quite confused about the difference between commercial auto insurance and personal car insurance. They do not always realize the importance of having commercial auto insurance when you use a car for business purposes instead of using a standard personal car insurance policy.
The Difference Between Commercial Auto And Personal Car Insurance
Commercial car insurance and personal car insurance are two types of vehicle insurance policies. Both of the policies are very similar especially when it comes to the basic structure of the car insurance coverage. But, commercial vehicle insurance tends to include a more comprehensive coverage that is specifically tailored for a business and its needs. Businesses typically may have more assets that need to be protected, and businesses also use their vehicles in a different manner than we would for a personal car. Personal car insurance is for vehicles that you and your family use in your private lives. On the other hand, commercial car insurance is for vehicles used primarily for business. Like many small businesses have learned with their bank accounts, it is dangerous to mix your personal life with your professional one. Your car insurance is the same and needs to be separated.
Why Purchase Commercial Auto Insurance For Your Business?
You need commercial car insurance for your business to protect your business from potential liability should there be an accident when employees are using a vehicle for business purposes. Without commercial car insurance, your business could be liable for the entire cost of unwanted events such as accidents, collision, theft, and other calamities. The problem occurs when you use your vehicle for a business purpose but only have personal car insurance coverage. Your personal insurance specifically does not cover business related items to include cars. You have to have a separate commercial car insurance policy for those cars that are used for the business in order to be covered. And, if you have a car for your business, every state in the country requires you to have car insurance protection to license the vehicle.
What Commercial Auto Insurance Usually Covers
Commercial car insurance is identical to the types of coverage that are offered to personal automobiles. Businesses can purchase collision, comprehensive, liability, uninsured and underinsured motorist coverage and other types of coverage as well. With commercial car insurance like personal insurance, states require businesses to have liability coverage should the commercial vehicle get into an at fault accident where there are injuries to another people or damages to personal property.
Commercial car insurance may cost more than what business owners are used to paying with their personal automobile insurance. That is one reason why many business owners, especially small businesses, may often drag their heels in purchasing commercial car insurance. This is a very dangerous game to play. There is a potential that a claim may not be paid since personal car insurance does not cover business vehicles or cars used in a primarily business capacity. The risk of liability is very great for business owners, and it is imperative that business owners have commercial car insurance for their business’s vehicles.
Photo Credit – © iStockphoto.com/LUGO