Everyone is aware that insurance is essential when driving a vehicle, but not many folks understand the differences between the different types of coverage.
Personal auto insurance is insurance for the car that you own and drive for personal use. Going to work, heading to the store, and other similar uses are covered under personal policies.
Commercial auto insurance coverage is taken out on vehicles that will be used strictly for your job or company. If you are an employee driving a commercial vehicle, the business owner needs to take out a policy on the vehicle.
We’ll cover all of the tidbits of the personal versus commercial auto insurance discussion. We’ll also discuss many different scenarios, which policy you need for what activity, and who is responsible for accidents involving commercial vehicles.
Steps to Take After Getting in an Accident With a Company Car
When do I need commercial auto insurance?
The answer to this question lies in the purpose you are using the vehicle for. This means that if you bought a car to drive for personal use but suddenly decided to become an Uber driver, then you need to take out a commercial auto insurance policy on the car.
Getting into an accident driving to work will be covered under your personal policy. Getting into an accident while doing your job will need a commercial policy to protect it. It’s a small but significant difference, and not everybody can see the intricacies of personal versus commercial auto insurance.
There are times when you need a commercial policy. Say you are investing in agriculture and you need to help your client buy a tractor to increase their productivity while farming. A commercial insurance policy is a clear choice here.
This is regardless of whether the policy is bought by you as an investor, or by the person you invested in. The tractor is being used for work purposes, so it needs commercial auto insurance.
The intent behind your use of the vehicle is what is most important when taking out a policy. This means that if you are a truck driver and your company insures your vehicle, but you need to use your truck for personal reasons, then you need to take out a personal auto insurance policy on your truck.
No business is going to pay for auto accidents that happen when a person is driving their vehicle for personal use.
Who is responsible for an accident that happens on the job?
If you are a company worker and your job is to drive for a living (such as delivery or rideshare), your employer must take out commercial auto insurance to cover your accidents that happen on the job.
You become responsible for your actions as an employee if you use a company car for anything unrelated to your job. Your bos is not going to protect you if you crash on the way to the beach in your pizza delivery vehicle. That is covered by your personal policy.
Some employers may worry that they do not have the money to take out a commercial policy on their vehicles, but there are creative solutions that make up for these hardships.
Rearrange your budget or find financial advice on how to allocate your resources according to priority. Buying insurance is always at the top of the list because the economic consequences of a company car getting in a wreck and not having insurance could potentially ruin your entire startup.
If you are an employee and you get in an accident, make sure you contact your boss as soon as possible. Your employer will contact the commercial insurance agent and handle the paperwork.
If you are an employer, talk to your agent about what type of commercial coverage you will need for your employees. Extra liability coverage and comprehensive coverage are more money, but they take the headache out of protecting your employees after they get into a accident.
Getting a commercial insurance policy for your business will take the nightmare out of the equation when a tragic event strikes. If you are an employee and you are driving a company car, always verify with your boss that you are covered by their commercial policy.
It’s really that simple. But without asking questions and being willing to learn, you won’t understand the nuances of the personal and commercial insurance sectors.
Shawn Laib writes and researches auto insurance for the auto insurance comparison site, BuyAutoInsurance.com. His job is to educate the public on the small differences between insurance coverages both personally and commercially.