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Driving a vehicle is the most dangerous thing most of us do on a daily basis. Because it’s so dangerous, nearly every state requires some kind of coverage. Even if you live in New Hampshire or Virginia where coverage isn’t required by law, you should still consider having a policy. You won’t be fined for not having insurance, but you’ll still be on the hook to pay for damages after an accident.

Just because you know you need to have coverage doesn’t mean you know what kind of coverage you’re supposed to have. It can be difficult to figure out if a personal auto policy will cover you in the event of an accident, or if you actually need commercial insurance.

Here’s what you need to know about commercial vs. personal auto insurance, including how much they cost.

Types of Commercial Vs. Personal Auto Insurance

Digging deeper into the different types of commercial vs. personal auto insurance can help you see how they are different, which in turn can help you decide if you need a commercial policy or not.

Personal auto insurance only covers accidents that occur while you’re driving your car for personal use. This does include commuting to and from work, but it does not offer protection if you’re driving while you’re on the clock.

In contrast, a commercial auto insurance policy will not cover you if you’re driving your vehicle for personal reasons, but if you’re completing job duties while driving, a commercial policy will protect you.

Some things a commercial policy covers include:

  • Transporting goods or equipment
  • Driving clients or employees
  • Performing a service
  • Passengers who are charged for a ride
  • Hauling loads for work
  • Towing a trailer for business

The simplest way to know if you need a commercial auto policy is to consider who owns the car. If your business owns the vehicle, it must be covered by commercial auto insurance.

What if you’re somewhere in the middle? Like if you use a personal vehicle for work?

A commercial policy may be appropriate in this case, but you may also want to look into a hired and non-owned auto insurance (HNOA) policy. It’s a great option if you or an employee uses a personal vehicle to run work errands, or if you regularly rent cars for work purposes.

It is important to keep in mind that an HNOA policy will cover legal bills resulting from an accident, but it will not cover physical damage. It is meant to provide liability-only coverage.

Cost of Commercial Vs. Personal Auto Insurance

In general, a commercial auto policy costs more than a personal policy. That’s because this type of policy tends to have higher limits and it is meant to cover an entire business, which means covering multiple drivers and multiple vehicles.

That doesn’t mean a commercial auto policy is automatically expensive. There are things you can do to keep costs low.

A few things you can do to save on a commercial auto policy include:

  • Purchasing and insuring the cheapest car models
  • Keeping the number of vehicles that are insured to a minimum
  • Reducing the amount of time the vehicles are used
  • Only allowing employees with good driving records to drive company vehicles

The type of coverage and policy limits you choose can also have a big impact on how much you pay for commercial auto insurance. Contact DJM Insurance and we can answer all the questions you have regarding commercial vs. personal auto insurance. Because we represent over 50 carriers, we can find you a great deal on car insurance!

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