Different Types Of Coverage
While some contractors believe all commercial vehicle insurance coverage is similar, this is a huge misconception. Before choosing a liability insurance policy, you should conduct extensive research on the available options. Regardless, if you are an independent contractor with only two commercial vehicles or a contractor with a large fleet of tractor-trailers, commercial auto insurance is a necessity.
Liability auto insurance is very limited, as it only covers the damages caused by the motor vehicle accident or the medical costs of third-party drivers injured in the accident. While this insurance is better than no coverage, it is genuinely not enough for contractors.
Insurance coverage is a necessity and requirement for all Canadian contractors who operate commercial vehicles and carry their materials around for completing specialized jobs such as demanding a licensed contractor for paving parking lots and driveways. Commercial auto insurance for contractors is very unique in that it protects the contractor from incurring any financial losses, while their drivers transport materials and move vehicles from place to place. It will not only provide funds for a commercial vehicle lost in a collision, but it also covers damages to third-party vehicles. This type of coverage does not provide funds for the damaged materials being transported.
Personal Vs Commercial Auto Insurance: Final Verdict
If you are still confused if you need commercial auto insurance then we are here for your support. Below are some points you can consider to make a well-informed decision:
|Personal Auto Insurance|
|Hauling tools and equipment to the worksite.|
Commercial Auto Insurance Coverage
A company with vehicles used specifically for business purposes invests in commercial auto insurance coverage for those vehicles. However, there are many reasons employees may use their personal vehicles for work. In these instances, the company might provide commercial insurance for employees. Still, this isnt always the case. If youre required by your employer to use your personal vehicle for business reasons, you need to inquire about the insurance coverage you are provided.
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Looking To Purchase Insurance
Contact Bieritz Insurance Agency today! We offer an assortment of products for all your insurance needs. Our staff is dedicated to working with you to procure the best possible policy at the best price. Our offices are located in Cooperstown and Morris, New York. You can contact us at our Cooperstown office at -547-2951 or at our Morris office at -263-5170. to find out more about our company and to make an appointment. We look forward to hearing from you!
Do You Expect To Insure Family Members
One of the biggest differences between commercial auto insurance and personal auto insurance is the extension of coverage to family members. A personal auto policy extends broader coverage to family members in more circumstances. A commercial auto insurance policy may cover family members only when driving or occupying the insured auto. So, identify whether personal coverage for family members beyond use of the insured auto is desired to determine which type of policy is appropriate.
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Does Commercial Auto Insurance Cover Personal Use
Commercial auto insurance typically covers employees who are given permission to drive your business vehicle. This policy will help pay the costs of accidents when an employee is driving, even if the vehicle was used for personal reasons.
So, what about personal vehicles occasionally used for work? That’s where a policy called hired and non-owned auto insurance comes into play.
What Does Commercial Auto Insurance Cover
If you own a vehicle thats used primarily for business, its likely youll need a commercial auto insurance policy. It covers vehicles used for purposes like:
- Driving to job sites
- Towing a trailer for business purposes
- Performing any service that you or an employee is paid to do.
Commercial auto insurance isnt just for big trucks, vans or customized business vehicles. People driving everyday cars and pickup trucks may also need and can benefit from commercial auto coverage.
The simplest case for commercial auto insurance is that if your business owns a vehicle, it must be covered by commercial auto insurance. Similar to your personal car coverage, it will pay for legal expenses, bodily injury and property damage related to auto accidents, along with vehicle-related thefts. Typically, commercial auto insurance covers higher claims, a wider range of vehicles and more complex legal problems. Thats because business vehicles are typically more expensive, policies cover multiple drivers with different levels of driving experience and vehicles used for business purposes and on job sites typically face greater risks.
Some of the things covered by commercial auto insurance include:
Did you know: Commercial auto coverage typically covers employees who are allowed to use a business vehicle, even if they have an accident while driving for personal reasons?
> > MORE: Why do You Need Commercial Auto Insurance?
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How Is Commercial Auto Insurance Useful
Commercial auto insurance adds another layer of protection to your business. Vehicles are a vital part of operations, and an accident, stolen work vehicle or injury could put your business at risk. This type of insurance covers cars, trucks, pickups, vans, trailers and fleets used for work purposes. It protects your business, drivers and your vehicles from exposure to threats.
How To Determine If You Need Commercial Auto Insurance
Personal auto insurance policies can provide enough auto insurance coverage for some businesses, especially if you’re also driving your vehicle for personal use. However, if you require specific commercial auto insurance coverages, high Liability insurance limits, operate an unusual vehicle, haul special equipment, transport goods or people, or have other special needs, then you’ll need commercial auto insurance.
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What Kind Of Vehicle Are You Insuring
The type of vehicle you drive is one of the main criteria to consider when comparing personal auto insurance with commercial auto insurance. If you operate a vehicle that has a very specific business purpose, then you may require commercial coverage. A flatbed truck used in a towing business, for example, would typically require a commercial auto policy. Certain commercial vehicles may not be eligible for personal auto policies.
Difference Between Commercial Car Insurance And Business Car Insurance
Commercial auto insurance covers specialized cars for specific jobs, whereas business auto insurance covers automobiles used for ordinary traffic travels.
Business owners must understand the distinction between business and commercial insurance because the wrong insurance can result in costly lawsuits. Both of these policies are more expensive than a personal auto policy. Is a personal or business plan required for a lone proprietor? It is determined by the extent to which it is employed for labor. Commercial auto insurance is typically more expensive than business insurance since commercial vehicles represent greater hazards.
Any heavy-duty vehicle used for construction is more likely to cause harm than a tiny automobile used for commuting. The larger the danger, the higher the insurance rates.
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Personal Auto Insurance Vs Commercial Auto Insurance
Both personal and commercial auto policies are essentially very similar they provide you with protection against common threats. These policies offer financial protection and provide you with resources to recover if you file an insurance claim. How they differ is in the type of threats, plan limits and types of policies available. Personal auto insurance is geared towards individuals, while commercial auto policies are customized for all types of businesses and functions.
One thing they both have in common is that personal will not cover you when driving for business use and commercial will not cover personal-use driving.
It is important that your insurance company is aware that you are using your personal vehicle for business purposes. Should a collision occur, your claim will likely not be processed if you havent disclosed the usage of your private car to your insurance company. Cancellation of your policy altogether may occur as a result. However, if your business use covers your daily commute to work, you are covered.
How Commercial And Private Auto Insurance Sometimes Cross Over
To understand how commercial and private auto insurance policies may sometimes be intertwined, consider the following examples:
A self-employed tow truck operator owns a flatbed truck, titled in the individual’s name, that is almost always used to rescue and transport disabled vehicles. The owner/operator might drive the truck to the grocery store on occasion, but the vast percentage of the vehicle’s use is geared toward business. Although used for business and personal purposes, a personal auto policy may not extend coverage to this vehicle because it’s clearly designed and manufactured for, and primarily used for, its intended commercial use.
A florist who owns a pickup truck may use the truck to run errands, take vacations and drive to other activities. That vehicle could be parked in a personal driveway or home garage, and children or friends might drive it occasionally, with permission. There may even be a spouse who commutes to work with the vehicle. From time to time, the pickup may be used to run work errands, and while such trips entail business use, they only account for very minimal mileage each year. Under these circumstances, insuring that truck on a commercial auto policy may not be necessary, as the owner predominantly uses the vehicle in a personal capacity.
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Understanding Commercial Auto Insurance
Before choosing insurance for your commercial vehicles, wise buyers should spend some time researching the coverage options and learning about the commercial auto insurance market. This section will cover the basics of commercial auto insurance, including the coverage, costs, and requirements. Afterward, well review all of the top providers and what makes them stand out. Also, if you want to learn more about other forms of construction insurance policies, make sure to check out our complete guide to the different types of construction insurance.
A Business Owns The Vehicle
Having a vehicle titled in a business name is a sure sign that you need a commercial auto insurance policy.
Personal auto policies are not designed to protect and defend corporations from auto lawsuits and settlements. They are designed to defend you, protect your personal assets, and prevent you and your family from experiencing financial harm.
Most personal auto insurance underwriters will not accept submissions from vehicles owned by a business. Additionally, a personal auto policy in your name will not cover assets the business owns.
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Who Needs Commercial Car Insurance
If you run a business that relies on business vehicles to operate, then you likely need to have commercial car insurance to cover them. However, determining whether you need commercial coverage if youre self-employed or run a business as a sole proprietor can be a bit trickier.
When weighing a commercial policy as a sole proprietor, consider the following:
- What coverage your personal car insurance policy offers
- How you typically use the vehicle for business
- The vehicle type and weight
- What kind of liability coverage you have with your personal policy vs. the amount of coverage you need based on business activity
If you have personal car insurance already and are unsure about whether you need commercial coverage, an insurance agent should be able to help you. Just be prepared to explain how you use the vehicle for business and how often, so the agent can accurately assess what you need for coverage.
What Kind Of Vehicles Are Covered By A Commercial Auto Insurance Policy
Box trucks, food trucks, work vans and service utility trucks are just a few examples of larger commercial vehicles which will require a commercial auto insurance policy, including coverage for employees operating the vehicle and possibly the equipment inside. You may have heard of this coverage referred to as commercial auto insurance, commercial car insurance, truck insurance, or fleet insurance. While commercial vehicle insurance is most commonly associated with trucks or more recognized work vehicles, regular cars and automobiles may also require a commercial auto policy if they’re used for business purposes.
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Are All Commercial Auto Policies The Same
NO! Negative! Commercial Auto policies are NOT all the same. Since most insurers believe that folks are price sensitive, a newer breed of Commercial Auto has come to the market. One that feels and looks like a commercial policy BUT it comes with many limitations and exclusions! Something that is not typical of true commercial policies like those offered by The Travelers, Hartford or Nationwide.
When Your Business Vehicle Is Also Your Personal Vehicle
Sometimes employees or executives of a company or other persons who are supplied with a vehicle owned by the company have only that vehicle. They do not own a personal vehicle nor do they obtain personal automobile coverage. The BACF does not cover personal use of the vehicle in this situation. To close this coverage gap, you need to add the Drive Other Car Coverage Endorsement to your BACF. This provides insurance while the named individual or a member of his or her family is driving a car borrowed from a third party.
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Comparing Car Insurance Policies:
Before you go ahead and decide to buy car insurance, be it commercial or private, it is essential to compare different insurance policies. You can compare car insurance online, which is easy and hassle-free with the use of the car insurance premium calculator. You can compare different car insurance quotes and understand the coverage and premium for the same. The higher coverage at a lower premium should be your objective while choosing a car insurance policy. This will offer wider coverage at a competitive price.
Price: Pick an insurance policy that takes care of your requirement and your pocket as well.
Coverage: Apart from the standard comprehensive car insurance policy, consider add-on covers such as Zero Depreciation, Engine Protection, Return to Invoice, etc. to make the insurance coverage more exhaustive.
Insured Declared Value : The IDV is the current market value of your car. Ensure you check the IDV offered by the insurer for the premium it quotes. Higher the IDV at a lower premium is an ideal approach to choose the right insurance for your car, be it commercial or private.
Exclusion: It is imperative to read the terms and conditions of the policy to understand what is not covered or excluded. This will help reduce the chances of rejection of claims.
When To File A Commercial Claim
If you use your personal vehicle for work purposes, it can be difficult to discern when to file a claim under your personal insurance as opposed to your commercial insurance. To answer this question, reflect on your activity when the accident occurred.
If you were commuting to or from work or out on your lunch break and had a collision, file a claim with your personal policy. If you are on the clock and fulfilling duties for your employer when an accident happens, commercial coverage will take care of the costs. If you do not have a commercial policy, you will not be covered when driving on duty, according to InsureOn.
Simply put, if you deliver passengers, packages, or anything else with your personal vehicle as a job, you need to have both a commercial and a personal auto insurance policy. While commercial auto coverage tends to cost more than personal coverage, shopping around to get quotes from different companies can help you find an affordable rate.
Check this out if you need additional information, resources, or guidance on car insurance.
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Employee Drivers And Other Gray Areas
There are some areas where the difference between personal and commercial auto insurance gets a little less clear. Here are a few examples from the gray area between commercial and personal auto insurance.
Realtors who use their personal vehicles for business purposes to take clients from house to house are usually fine with a personal auto insurance policy as long as the vehicle is classified under Business Use. This ensures you get the proper rating and coverage for your needs.
Pizza delivery drivers will almost never be covered under their personal auto insurance, as the business is considered to be very high-risk.
In some cases, the pizza company that employs them may offer Non-Owned Liability coverage, but this generally protects the business against lawsuits, NOT the employee! So if Kenny accidentally hits a pedestrian or clips a BMW while making a turn, he is still on the hook for his own legal fees and car repairs.
Ridesharing drivers have some coverage from the company they drive for , but they dont provide unlimited coverage at all times. These companies have designated time periods which determine whether you are covered and, if so, what your limits are. Uber and Lyft only provide coverage while you are logged into the app and working. But even then, this is contingent coverage, meaning they will only take over after your personal auto policy does its part.