Whether you use your vehicle for personal, business, or commercial purposes, it is imperative to get auto insurance to safeguard your finances and protect your vehicle from a potential threat. However, it is essential to understand the difference between commercial auto insurance and business & personal auto insurance to make informed choices. Though all these protect you against losses, they serve different purposes.
Coverage Limits
The basic coverage for all policies is the same – to cover damages to the other driver, personal injury protection to both parties, and damages to you or your car. However, the coverage limit varies. A personal car insurance policy covers your individual needs, while commercial auto insurance policies are designed to protect vehicles used for all types of business activities. The coverage limits for commercial insurance policies are higher as compared to personal auto insurance policies.
Commercial vs. Personal Auto Insurance: Purchasing the Right Type of Coverage Policy
The purpose of driving your vehicle will determine which type of coverage will suit your needs. If you drive for personal use, such as driving to work, going shopping, driving around your neighborhood, or personal excursions, you should purchase personal auto insurance. If you are driving your vehicle for work-related errands, your personal insurance policy will not cover any damage or injuries from an accident. For regular work-related errands, such as making deliveries, meeting clients, or hauling equipment, you may have to purchase a commercial auto insurance policy.
Commercial Insurance vs. Business insurance: What Is the Difference?
Wondering how commercial and business auto insurance differ from one another? They might sound similar, but there are notable differences. A vehicle’s business use implies using it to pursue your profession or occupation, such as a car driven by a realtor to show homes, a courier agent driving to make deliveries, or a lawyer going to meet clients. On the other hand, commercial use includes long haul trucks, transporting goods, tractor-trailers, or cement trucks. Commercial insurance policies are more expensive than business insurance, as commercial vehicles are more susceptible to risks and damages on the job.
Ensuring that Commercial Insurance Meets All State Requirements
While buying commercial auto insurance, it is imperative to ensure that the policy covers all the state requirements. Though the value may vary from state to state, all state regulations demand specific coverage requirements such as property damage insurance, bodily injury insurance, medical payments, uninsured driver insurance, etc. Ensure that you discuss your vehicle’s use in detail with your insurance company so that your policy covers all the requirements.
Distance Covered by the Vehicle Impacts Commercial and Business Insurance
As compared to a personal car, business and commercial use vehicles are expected to cover more miles. Commercial vehicles tend to be on the roads for longer hours, as most businesses operate beyond the usual eight-hour shift. The longer the vehicle is on the road, the higher are its chances of being involved in an accident. The premium for commercial and business policies is higher than personal auto insurance due to an increased risk factor.
Purchasing the right auto insurance can protect your vehicle and safeguard your finances in unforeseen circumstances.
Contact the experts at Phocus Insurance, in Phoenix, Arizona, for all your auto coverage needs.
