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Do I Really Need a Commercial Auto Policy?

When it comes to auto insurance, the type of policy you need is usually pretty clear. The average consumer needs a personal auto policy to drive back and forth to work and to the store. A truck driver needs a commercial auto policy to cover his liabilities and whatever product he is hauling. But what happens when you’re driving your car not just to and from work, but in the course of your job? What’s the difference between an occasional errand and regular work use? Where does the line between personal and commercial use blur?

What Kind of Driving Do You Do?

Whether or not you need a commercial auto policy depends on several factors. The following are the most notable:

  • The vehicle is owned by the corporation or business. If this is the case, the insurance policy most often needs to be in the name of the business, not your personal name.
  • You transport people, or products/goods, for payment. This doesn’t mean you can’t take your friend to the airport in exchange for gas money. It means you can’t operate a commercial taxi or transport service out of your car. You can’t make deliveries for the local florist or home improvement store, either.
  • You use your vehicle to carry tools for your job; or you have to tow a trailer or other equipment with your car in order to do your job. This doesn’t mean you can’t throw a couple of hand tools in your car on your way to a friend’s house to do a handyman job. If you’re carrying tools from job site to job site, or supplies and other equipment, you are using your vehicle commercially.
  • Do you use your vehicle to offer a service, such as serving court papers or driving from location to location as a mobile doctor, vet, or other service-related task?

Why Commercial Insurance is Important

In many cases, the type of work you do may require you to carry higher limits of liability than your traditional personal car insurance policy. You may need additional coverage to ensure your business is properly protected as well, such as extra coverage for modifications you may have made to your vehicle (like a work truck) or special policies to cover the goods you are carrying for others.

Many personal auto policies specifically exclude business use. This means if you’re making a flower delivery for your shop in your personal car and get into an accident, your personal auto insurer may deny the claim. Some policies even specifically exclude jobs like pizza delivery, leaving the burden of coverage on the business owner and not the employee who is driving his own car during the course of his work day.

Commercial auto policies are very similar in nature to personal auto policies but may features a series of enhancements or limitations depending on the company you decide to work with. Talk to your insurance agent about your business, how you use your vehicle, and your needs. Having the right coverage is critical to protect both your personal and professional assets.