Should You Get Personal Or Commercial Auto Insurance?

Posted on: 24 September 2021


Typically, the coverage you choose depends on the state where you live and how you use your car. Personal auto insurance covers you and your family members. This means that if your friend or employee is involved in an accident while driving your vehicle, they're likely not covered. 

Alternatively, commercial auto insurance would cover you, your employees, tools, and any other occupants in the vehicle. It's costlier than personal insurance, which is why some opt to remain with personal auto insurance. 

If you're debating whether to get commercial or personal auto insurance, the following tips can help. 

Who Owns the Vehicle? 

Do you own the vehicle, or is it part of your business? If it's part of the business, are you a sole proprietor in a corporation or partnership? 

If you own the car and use it solely for personal use, get personal auto insurance. This is a car you use to commute to your workplace or business and then home. You likely fall under personal auto insurance, but contact your insurance to be sure. If the vehicle is part of your business and used for your business, consider commercial insurance. 

How Do You Use the Vehicle? 

Do you use your vehicle solely to travel from home to work and maybe run errands while at home? If it's more of a family vehicle than a work vehicle, consider getting personal auto insurance. Currently, it's hard for small businesses to have a dedicated business vehicle. In most cases, personal vehicles double up as business vehicles. 

If you're in such a situation, consider which use overlaps the other more. For example, if you use your car primarily for personal use and a few business errands, look into personal auto insurance. 

You should consider commercial auto insurance if you're a contractor who travels to job sites with expensive tools in the truck. Commercial auto insurance will offer the coverage you need in case you're involved in an accident that damages your tools. 

Type of Vehicle

You can buy personal auto insurance for a Ford truck, an SUV, or a sedan. The same wouldn't apply to commercial vehicles such as an 18-wheeler truck.

Heavy vehicles typically cause more damage when involved in accidents. You can't compare the impact of a heavy-duty truck to that of a personal compact car. This is why the former need special insurance coverages that personal auto insurance may not offer.