Understanding the difference between commercial, business, and personal auto insurance is crucial especially if you use your car for any business driving. While an occasional drive to pick up stuff from the store to the office isn’t a big deal, making frequent cargo deliveries and transporting business-related cargo can put you in a more liable position. Not knowing the difference between these types of insurance could lead to a costly lesson in case you get involved in an accident while doing an errand for work.
Commercial Auto Policy
A commercial auto insurance policy is designed for companies or businesses that use cars or vehicles to conduct business. This vary from transporting goods, delivering products and services, or the vehicle being the service itself. For example, a contractor that deploys trucks to project sites, or a furniture store that delivers furnitures to different locations.
Personal Auto Policy
A personal auto policy, as the name suggests itself, covers all things that are considered “personal” in nature. From your leisure activities, your daily drive from home to office, and your errands to the grocery store. All of these are considered “personal”. You and drivers you list under the policy are covered by the auto policy that is tailored to cover individuals that use their cars for personal purposes.
Commercial, Business, and Personal Policies Provide Similar Basic Coverage
You can purchase liability insurance to pay for damages caused to another driver, personal injury protection to cover both parties, and physical damage protection to cover damages to you or your car. The major difference between the three is that the personal policy is usually lesser than the rest. It also tends to cover the car owner and anyone who has permission to drive the car. On the other hand commercial and business insurance policies may impose who is covered and who’s not.