Commercial Auto 101

If your business uses vehicles, you likely need commercial auto insurance. Here's what it covers, who needs it, and how it differs from personal auto.

What is commercial auto insurance?

Commercial auto insurance covers vehicles used for business purposes. This includes liability coverage (when you're at fault in an accident) and physical damage coverage (for damage to your own vehicle).

Who needs it?

You need commercial auto if:

• The vehicle is titled in your business name
• You use the vehicle primarily for work (deliveries, service calls, hauling equipment)
• Employees other than you drive the vehicle
• You haul goods or equipment for customers
• The vehicle is a truck, van, or specialized work vehicle

How is it different from personal auto?

Personal auto policies typically exclude business use. If you're in an accident while working and only have personal coverage, your claim could be denied. Commercial policies are designed for business use and typically offer higher liability limits.

What does it cover?

• Liability: Bodily injury and property damage you cause to others
• Collision: Damage to your vehicle from accidents
• Comprehensive: Theft, vandalism, weather damage, etc.
• Medical payments: Medical costs for you and passengers
• Uninsured motorist: When the other driver has no insurance

What affects the cost?

Several factors determine your premium:

• Type of vehicle (work trucks cost more than sedans)
• How the vehicle is used (long-haul vs. local)
• Driver experience and driving records
• Where you operate (urban areas cost more)
• Coverage limits and deductibles you choose