Why You Need Commercial Vehicle Insurance vs. Personal Auto Coverage
There are several important distinctions between personal automobile insurance coverage, which is designed to protect a limited number of drivers who share a private vehicle, and commercial vehicle insurance for companies that maintain a fleet of cars, trucks and/or vans for business use. In broad terms, commercial vehicle insurance offers additional protection that personal automobile drivers typically don't need.
Personal vehicle insurance is intended to cover everyday usage of a vehicle for things like shopping, performing errands, and driving to and from work. It is not intended for the kinds of circumstances that can arise if you use your vehicle for commercial purposes. For example, if you are a handyman and store your tools in your vehicle, they may not be covered under a personal insurance policy if they are damaged or stolen, or if they cause damage to your vehicle as the result of an incident or accident. To get this kind of coverage, you need a commercial insurance policy. These policies are designed to protect you, your passengers and your property when you use a vehicle for business purposes.
The types of coverage available for commercial policies are pretty much the same as those available for personal policies. They include:
- Collision coverage. This coverage reimburses you for damage sustained by your vehicle as the result of a collision with another vehicle or stationary object.
- Damage coverage. Protects your car from theft, fires, vandalism and other select types of potential damage.
- Uninsured or underinsured motorist coverage. This type of coverage protects you if you are involved in an accident with a motorist who does not have car insurance of his or her own, or if his or her policy is insufficient to cover the costs of damages and injuries.
- Personal injury coverage. This is a no-fault type of coverage that protects you and the other occupants of your vehicle if any of you are injured in an accident.
- Liability coverage, both for bodily injury and property damage. This type of coverage protects you in situations where you were at fault and caused the injury or death of another person, or if you were at fault and damaged another person's property.
- Combined single limit coverage. This optional coverage combines protection against both injury and property damage under a single maximum dollar amount.
The key here is to understand that coverage eligibilities, limits and exclusions differ between personal and commercial vehicle insurance policies. Also, the exact definition of what is and is not covered by each of these items varies. Generally, commercial vehicle insurance is more inclusive and comprehensive than personal car insurance in the types of situations it covers.
When you're shopping around for commercial insurance coverage, you should be prepared to answer detailed questions about the nature of your business activities as they relate to vehicle usage. Commercial vehicle insurance, like personal insurance, can also be tailored to cover multiple drivers on a single vehicle or a fleet of company-owned vehicles.