What Are the Differences Between Commercial and Business and Personal Auto Insurance?

Insurance companies usually recommend buying separate auto insurance policies for your business and personal vehicles. Finalizing terms for both personal and commercial auto insurance in NC can be complicated at times because of the differences in coverage and situations covered. Learning the similarities and differences between these policies and the potential liabilities covered will help you choose the right coverage for your vehicle.

Similarities in Coverage

General auto insurance policies for business and personal use are similar in terms of premiums. The more coverage you require, the more premiums you will need to pay. The number of drivers plays a vital role in determining premiums for each of these plans. If you have a small business with a limited number of drivers and vehicles, your premiums will be lower than that of a company with a large fleet.

Each plan offers a limited amount of coverage. Be aware that neither personal nor commercial auto insurance in NC acts as umbrella insurance. The auto insurance coverage you need depends on the vehicle’s usage and model. Personal auto insurance rates are easier to figure out because it only covers one person in most cases, while business insurance policies generally cover multiple drivers of the insured vehicle.

Number of Drivers Covered

Using multiple drivers for a specific vehicle may raise the question of whether the vehicle should be covered by a personal or business auto insurance policy. While the personal policy automatically covers whoever drives the car, commercial auto insurance policies either cover all drivers or a few depending on how the insurance company stipulates the policy.

Important Differences Between Commercial and Business Auto Insurance

One of the major differences between business and commercial auto insurance is how the vehicles are used. Business auto insurance covers vehicles used to perform basic tasks, while commercial auto insurance covers special vehicles designed to perform specific tasks. Business auto insurance policies are needed if you or your employees use vehicles to transport goods around the city. Commercial auto insurance coverage is perfect for truck drivers who transport warehouse goods from state to state.

As a business owner, it’s important to learn the key differences between business and commercial insurance. Purchasing the wrong insurance may lead to a potential lawsuit in the future if something goes wrong. Due to the risks involved, both business and commercial auto insurance policies cost more than a personal plan. The classification of your business, such as operating your business as an LLC or sole proprietorship, may also be a factor in determining whether you’ll need a business or commercial plan.

In most cases, commercial plans are more expensive than business plans as insuring commercial vehicles is considered riskier. The more miles you drive, the higher your chances of being involved in an accident, which impacts your auto insurance rate. If you are operating a large truck, you have less flexibility to adjust to sudden road changes, which also impacts your premiums. A heavier vehicle used for construction has a higher risk of causing damage than a compact car used for commuting. Therefore, the higher the risk, the more premiums you will need to pay.

Consult with Pittman Insurance Group, LLC

While researching commercial auto insurance in NC, you must learn about local and state laws regarding the coverage. If you have any questions regarding business and commercial auto insurance, contact our team here at Pittman Insurance Group, LLC, and we will help you find the right policy.

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