Commercial Car Insurance Coverage: An Expert Guide (2024)

On the surface, commercial auto insurance can seem very similar to personal car insurance coverage. After all, both policies provide protection for a motor vehicle against a variety of perils, and both offer liability protection for car accidents.

However, commercial auto insurance differs from its personal counterpart in a few important ways, including the scope of the policy.

If your business requires the use of one or more vehicles, you probably need to carry a commercial auto policy or fleet insurance.

How Commercial Auto Insurance Differs from Private Coverage

In terms of coverage, commercial and private auto policies are usually pretty similar. Each can have collision, comprehensive, bodily injury, and liability coverage, and you can stack up different commercial policies against each other, similar to, say, comparing comprehensive car insurance policies.

However, the liability limits of a commercial policy will tend to be higher than those for personal insurance, as commercial drivers are open to more risks and litigation.

Additionally, commercial policies will have a greater scope. They are designed to pay for large fleets of vehicles or very expensive custom vehicles that would not usually be owned by private individuals. You can compare quotes from car insurance companies that insure modified cars to find the best policy for you.

Read more: best business insurance with car insurance

Different types of commercial policies apply in these situations. For example, some policies are made for fleet companies, while others are designed to provide taxi auto insurance.

Who Needs Commercial Car Insurance?

Any company that uses vehicles as part of its business should consider purchasing commercial auto coverage.  A few businesses have a particularly high need for this type of insurance:

• Taxi, shuttle, and limo services
• Fleet services
• Delivery services (such as Instacart car insurance)
• Any business that requires driving clients from one location to another

These types of businesses carry high liability risks, and the price of a claim can be extensive if an accident were to occur. Carrying the appropriate amount of auto insurance, alongside business general liability insurance, can protect the company from devastating lawsuits in the wake of a car accident.

It’s also worth noting that commercial insurance premiums for business vehicles can often be lowered by ensuring that sufficient security is installed to protect them.

Protecting your commercial vehicles by keeping them behind security gates and steel barriers in areas monitored by security cameras demonstrates to potential insurers that the risk of theft is significantly lower. For instance, if you drive a food truck, keeping it protected with this extra security combined with food truck insurance can keep your risk level low in the eyes of your insurance provider.

Many people mistakenly complete business-related activities in their privately insured vehicles, not realizing that this could result in a denied claim if the insurer found out.

It’s always better to be safe than sorry when purchasing insurance coverage, and check with your insurance company before using your personal car for business tasks. Don’t take a risk with your personal auto insurance policy. Commercial coverage for business purposes is designed to meet your business insurance needs, whether through a basic commercial car insurance policy or more comprehensive coverages.

Read more:

• Can I get car insurance for a car that is used for business purposes?
• Best Commercial Car Insurance Coverage Company

How Much Does Commercial Auto Coverage Cost?

The cost of a commercial auto policy will depend on your company’s risk level and the type of protection you require. The expense of insuring a fleet of 18-wheel tractor-trailers with fleet insurance will differ from that of a limousine service. (For more information, read our “Does car insurance cover trailers?“).

It is important to have your business analyzed by multiple insurance companies in order to get personalized quotes and find the best policies from the best insurance companies. This will give you sense of how much it will cost to insure your vehicles, depending on policy limits and coverage limits.

Case Studies: Exploring Commercial Auto Insurance Scenarios

Case Study 1: Fleet Services

John owns a fleet services company. When one of his drivers had an accident while transporting fragile goods, it resulted in significant damage. This case study emphasizes the need for comprehensive commercial auto insurance for businesses like John’s.

Case Study 2: Food Truck Security Measures

Sarah, a food truck owner, invests in security measures like gates and surveillance cameras to protect her vehicle. These measures reduce the risk of theft and damage, potentially lowering insurance premiums for business owners.

Case Study 3: Personal Vehicle Misuse

Mark, a small business owner, used his personally insured vehicle for business tasks. However, his insurance claim was denied when he got into an accident. This case study highlights the importance of having a tailored commercial auto insurance policy to avoid coverage gaps.