Insurance policies are designed to help mitigate risk. Finding the right insurance policy can be overwhelming since there are such a wide variety of specialized plans, each designed for unique circumstances and applications. For example, driving a car for personal transportation has a different risk profile than driving one as part of a commercial fleet, which is why personal auto insurance differs from commercial auto insurance.
In this article, our team at Morco Insurance Agency will go over a few of the key differences between personal and commercial auto insurance policies.
- Vehicle Use – One factor that determines whether you need personal or commercial auto insurance is how you use the vehicle. If you drive your vehicle for personal transportation, then you likely only need a personal auto insurance policy. On the other hand, if you drive your vehicle throughout the day as a key part of your work duties, then you need a commercial policy.
- Vehicle Type – In addition, some vehicles are designed for commercial use, and they therefore need commercial auto insurance. For example, it is exceedingly rare for anyone to drive an 18-wheel truck for recreation, and therefore these vehicles require commercial insurance.
- Vehicle Ownership – A third factor that affects whether you need personal or commercial auto insurance is who owns the vehicle in question. If you use your personal vehicle as part of your sole proprietorship business, then you may be able to use personal auto insurance. However, if you own multiple vehicles that are driven by employees, you need commercial auto insurance.