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How Do I Know if I Need Commercial Car Insurance?

There are many kinds of insurance policies to purchase and many of them, such as home insurance and auto insurance, are not only highly advised, but in many jurisdictions, is mandatory. Auto insurance, whether commercial or not, is a necessary kind of coverage if you own and operate a car. This is because if your vehicle is damaged, insurance will help cover the cost of repairs.  In addition, if injuries are sustained by other drivers, pedestrians or passengers, insurance will cover those costs, as well. Without insurance, the costs to the car owner could be astronomical. Also, if the owner of the car owns a business, damages could be so severe that the person loses his or business due to lack of funds. This does not have to happen as long as the business owner protects his or herself.

Commercial Car Insurance

Even though both kinds of insurance cover vehicles, commercial car insurance is a different form of auto insurance and there are reasons for having it fall under a different category than personal auto insurance. Therefore, you may be asking yourself, “how do I know if I need commercial car insurance?”

You can’t just start a business and expect personal auto insurance to cover car use. Commercial auto insurance is vehicle insurance that is not covered under a personal auto policy. If you are a business owner who uses a car solely for the business, you’ll need commercial insurance. You may also require additional coverage add-ons, as well to ensure that every aspect of the use of the car is covered. You need enough coverage to protect your vehicle, you, employees that use the car, and any passengers that are part of your vehicle.  In short, businesses deal with employees, work gear, equipment, passengers, etc. All of these need adequate coverage if a vehicle is involved. Therefore, commercial car insurance covers the car, employees, equipment, and your business in the event of a lawsuit. Determining if you need it or not can get tricky. So here are some specifics to tell if you need commercial auto insurance:

  1. Is your car being used for regular business use?

You need to determine if your car is being used for regular business use. To begin with, if a business owns it, you will most likely need the commercial insurance. A vehicle that is owned by a company is not generally a private vehicle. More specifically, what is considered “regular” business use? Ask yourself if the car is used for business more than three times a month in a one month period. If so, you need commercial insurance. If you’re just using the car to drive to and from work, that is not considered commercial use and can be covered under a personal policy. In addition, if you are a sole proprietor and you only travel to one or two job sites a day, private auto insurance may work. This is not a guarantee, however, and It’s important that you check with an insurance broker to ensure that you are following any rules or laws. With that said, if you are doing things with the vehicle like carrying equipment, towing for hire, delivering goods or services, using the car as a messenger service, using the vehicle as a chauffeur service, etc., you would need commercial insurance and depending on your state, may be required to have it.

  1. Who is the vehicle registered under?

Is the car registered under you or under the name of your business? If you are operating as a sole proprietor, you may be able to have only personal auto insurance, but it is highly advised that you check with an insurance broker to make sure. With that said, even if a car is registered under your name, if it’s used for business, you most likely will need to get commercial auto insurance.  If the car is registered under the name of your company, you definitely will need to get commercial auto insurance. A common sense approach comes into play here to ensure that you comply.

  1. Who is driving the vehicle?

Who are the people driving the car? Is it just you, or do a number of employees drive the car as well? When others are driving the vehicle, the risk becomes greater, and all of those people need to be covered. A commercial auto insurance policy will not only cover you but will also list the employees who use the car as drivers. You will definitely need commercial vehicle insurance if others are driving the car, and if you use the vehicle for business, even if you are the only driving, you will likely need commercial vehicle insurance as well.

  1. What kind of vehicle is it?

It should be noted that commercial vehicle insurance covers more than just cars. It also includes things like trucks, utility vans, limousines, taxicabs, flatbeds, etc. Therefore if your vehicle is heavier than a car, a pickup or an SUV, you’ll likely need commercial insurance. Keep in mind that vehicles that are more massive cause more damage if they are involved in an accident. Commercial auto insurance becomes even more critical when you are dealing with huge vehicles.

To determine if you need commercial auto insurance for sure, contact an insurance broker.  When you obtain commercial insurance, you’ll need a separate policy. In some cases, your insurance broker can add on the cost of the commercial insurance to your personal auto insurance.

To find a commercial auto insurance broker, the best is through word-of-mouth. Referrals are the best way to work with a company that others are happy with. Minus such recommendations, the next best thing to do is to get online and do some research. Every reputable provider of commercial auto insurance has a website. Study the sites and be sure to ask for a free, personal consultation. Many insurance brokers are providing commercial auto insurance. Be sure to inquire about packages and possible bundles to ensure that you are getting not only good coverage but affordable rates.

After working as digital marketing consultant for 4 years Deepak decided to leave and start his own Business. To know more about Deepak, find him on Facebook, LinkedIn now.


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