Auto insurance can help you financially recover from accidents or incidents involving vehicles. Coverage is essential for any personal vehicle or a vehicle driven for business. If a business expects its employees to use their personal vehicles for work purposes, then in addition to commercial auto insurance, employers must also have hired non-owned auto coverage (HNOA). This insurance covers non-owned and leased vehicles.
Knowing the difference between personal and commercial auto insurance can be challenging. Generally, personal auto insurance only covers accidents while driving your vehicle for personal use. This coverage includes driving to run errands, commuting to and from work, travel or anything that is for personal use. Personal car insurance typically covers the vehicle’s owner and immediate family members. Check with Generation Insurance Services to find out precisely what isn’t covered by your personal auto insurance.
Sometimes, business owners and employees use their personal vehicles for business purposes. For example, they might use their car to travel to job sites, transport equipment or deliver goods. Personal auto insurance policies likely will exclude business use, which means you’re not covered if you have an accident while using your personal vehicle for work-related purposes.
If you or your employees drive for business, you need commercial auto insurance. This protection usually provides coverage for higher claims, different types of vehicles and more complex legal issues. In addition, commercial coverage usually includes all the business’s employees as additional insureds, which means every employee with a valid license can drive a company vehicle. However, it is essential companies ensure each employee who will be driving is suitable to drive to mitigate risks and costs. The cost of commercial car insurance can be affected by employees’ driving records, previous claims, the policy’s coverage limits and deductibles.
Commercial auto insurance is needed if you:
- Charge passengers a fee to ride in your vehicle
- Charge people a fee to transport goods in your vehicle
- Drive clients or employees
- Haul work-related loads
- Perform a service that you’re paid for
- Tow a trailer used for business
A commercial auto insurance policy costs more than personal auto insurance. This higher cost is due to higher limits and that a commercial policy covers an entire business. On the other hand, a personal auto policy only covers one person driving their personal vehicle, so it is typically less expensive.
All drivers should have insurance, whether they drive for business or for personal reasons. If you drive for work, you want to ensure your employer has you covered under their commercial auto policy.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.