What Is Commercial Auto Insurance?

What Is Commercial Auto Insurance?

Feb 25, 2022

We often get questions about commercial auto insurance policies. Sometimes, insurance terms can be confusing for those who are unfamiliar with them. With so many different providers and types of coverage, this is quite common. Let’s take a closer look at commercial auto insurance, who needs it, and what it provides.


Commercial Auto Insurance

Commercial auto insurance policies cover vehicles used for business reasons. They’re designed to insure these vehicles when a personal auto insurance policy wouldn’t apply. That’s because insurers write personal policies with a rate for an assumed type of use. Business vehicles often see heavier, frequent use, and many unique factors come into play.

Do I Need Commercial Auto Insurance?

Whether you need commercial auto insurance depends on a number of factors. Perhaps the best question to ask is if you use the vehicle for business reasons. If you do, consider meeting with an agent to discuss whether a personal auto policy is enough.

There are many vehicles that are covered under commercial insurance policies. These may include company cars given to staff members, box trucks, taxis, tow trucks, vans, and buses. If your business owns vehicles, you’ll likely need some form of commercial insurance. However, you may also need it if you use your personal vehicle to earn money. With the growing presence of the gig economy, commercial policies are becoming more commonplace.

Many people work as a contractor for Lyft, Door Dash, Uber, or Grub Hub. A personal auto insurance policy may not cover you while transporting passengers or delivering food for such services. This niche industry often calls for a commercial policy to protect both drivers and passengers.

Types of Commercial Auto Insurance

There are a number of things that are covered under a commercial auto insurance plan. They are similar to what applies to a personal policy. It often covers collisions, or damage to your property and other vehicles in an accident. Comprehensive damage from theft, animals, or disasters may also apply, as does liability. This covers you if you’re found at fault for an accident which causes others harm. Policies also include coverage for uninsured or underinsured motorists to provide greater peace of mind.

Some policies also offer a variety of extras or add-ons. They can include things like roadside assistance and towing, rental reimbursement, and personal injury protection. Some policies may even offer things like loan or new vehicle replacement coverage. These types of “gap” insurance policies ensure you’re financially able to replace a totaled vehicle.

Benefits of Commercial Auto Insurance

Commercial auto insurance policies provide companies with many benefits. These are some of the most common worth mentioning.

1. Higher Limits

Accidents with business vehicles are more likely to lead to lawsuits. This is because a driver represents a company and its reputation. Commercial policies have higher coverage limits to protect drivers in these cases.

2. Equipment Protection

Many companies transport specialty equipment like kitchen instruments, hydraulic components, or construction tools. These can be costly to replace, and personal policies rarely cover them.

3. Leasing Requirements

Your lease may require you to obtain commercial auto insurance. This means you may face fines or penalties if you don’t have it.

4. Continued Employment

For some rideshare and delivery companies, having a commercial insurance policy is required for employment.

Commercial auto insurance is vital for modern companies. If you need insurance for your company vehicle, we hope you’ll reach out for a free quote today. We work with many different providers to source the best coverage for our clients. Our team would be happy to discuss your unique needs together.

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We've had our home, auto and life insurance with Michael Cooper for years. My wife and I really feel like Michael and the team at Omega Insurance Group look out for our best interest and educate us on what we really need.Jeff C. & Jennifer B.Lincoln NE
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