Whether you need to get a commercial vehicle policy will depend on your vehicle type and usage. We’ll discuss different scenarios where you need a commercial policy and when a personal policy would suffice.
If you any of these things apply to you, you need a commercial auto policy:
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What type of vehicle you have: If you have a pickup truck or a van that is rated at more than one ton (think Ford F450). At the same time, any pickup truck that has a flat bed or toolboxes instead of a regular bed only qualify for a commercial auto policy.
Even if you use these types of vehicles for personal use, because of vehicle size or type, you need a commercial policy.
- Your vehicle usage: If you are pulling a trailer with your vehicle to conduct your business or hauling lot of tools in your vehicle you need business vehicle insurance. If you are visiting more than 2 jobsites per day, you need a commercial policy.
- Your occupation: Depending on your occupation and your vehicle usage you may need to get a commercial policy. If you have a cargo van and you are a plumber, painter or electrician, your personal auto policy may not provide coverage.
If you are a delivery driver (food or packages) you need a commercial policy. Few insurance companies offer endorsement for deliveries on a personal policy.
- Company Signs: If your vehicle has company advertisement it does not qualify for a personal policy.
Who owns the vehicle: If your vehicle is registered to a company name it would disqualified from a personal auto policy.
What qualifies as business use?
If your job demands that you use your vehicle in conducting business like driving to multiple job sites (more than 2 per day), driving clients, hauling a trailer to do business, delivering food or packages, all that would fall under commercial use.
- Landscaper who uses their truck to pull a trailer carrying lawn mowing equipment.
- If you are transporting people for a fee like taxi or limo service would be business use and therefore only a commercial auto policy would provide coverage.
- Even if you are driving for Uber or Lyft would falls under commercial use, but some insurance companies offer endorsements on personal auto policies for ride-sharing services.
Commuting to and from work is not considered business use.
How do you insure a commercial vehicle for personal use?
If your vehicle only qualifies for a commercial auto policy but you only use it for personal use, you can get a non-business commercial policy. In this case you cannot use your vehicle for-hire purposes.
If you decide to start using it for business, you need to contact your insurance company to change the business classification.
Some vehicle types will not qualify for a non-business commercial policy. A large vehicle like a dump truck or a box truck would only qualify for business use.
Does it cost more to insure my vehicle under a commercial policy?
Commercial vehicle insurance is usually higher than a standard auto policy. Commercial vehicles spend more time on the road, therefore increasing the risk of an accident. Typical business will choose higher limits of liability to protect their business.
While high liability limit on a personal policy is usually 100/300/100, a business policy can go in excess of a million.
It also cost more because a commercial vehicle, depending on the size, can cause more property damage or more bodily injury in an accident than a personal car.
Does personal auto insurance cover business use?
Your personal auto insurance does cover some business usage with an endorsement. If you are a real estate agent, doctor or a lawyer and you need to travel to multiple sites your personal auto policy can be endorsed for this type of business.
However, you must avoid transporting clients in your vehicle.
As long your vehicle type qualifies for a personal policy, you have no business signs on the vehicle and you travel to no more than 2 jobsites per day, in most cases your personal auto policy can be endorsed to cover some business usage.
Make sure to contact your insurance agent or the company to make sure that there are no gaps in coverage.
We at Bargain Insurance Connection are here to help you with any questions you may have about your coverage and whether you need to get a commercial auto policy.
For free consultation give us a call at 816.453.7722 or use our commercial auto quote form.