When you are on the road you are always at risk of getting into an accident. When a person is injured or personal property is damaged, someone will be held responsible. Often the responsible party will have to pay for the cost of the damage or pay for the injured person’s medical bills. This is why it is so essential to have auto insurance that helps you if you find yourself responsible. However, lines can blur when it comes to personal auto insurance and commercial auto insurance. Signet Insurance Group will break down the major differences between these two major insurance policies.
Defining of Various Auto Insurance Policies
• Personal Auto Insurance: As the name suggests, personal auto insurance is designed to cover individuals and their personal vehicles. Whether you are driving to work, running errands, or going on a vacation, personal auto insurance protects you and your vehicle in scenarios that do not involve commercial or business activities.
• Commercial Auto Insurance: This insurance is designed for businesses and covers vehicles used for business purposes. If you operate a delivery service, taxi, or any other business that involves the transportation of goods, services, or people, commercial auto insurance is a must.
Insurance Coverage Differences
• Personal Auto Insurance: Typically, it covers liability such as injury or damage you cause to others. Collision which involves damage to your car from an accident. Comprehensive which covers damage from events like theft or weather, personal injury protection, and uninsured/underinsured motorist protection.
• Commercial Auto Insurance: Apart from the coverages similar to personal policies, commercial auto insurance might offer coverage for equipment breakdowns, rented vehicles, employee drivers, and goods in transit.
Liability Limits
Commercial vehicles often have a much higher liability risk. For example, a delivery truck can cause more damage in an accident than a regular car. This means that commercial auto insurance policies usually come with higher liability limits compared to personal auto insurance. This will also result in a higher coverage amounts, but also potentially higher premiums.
Insurance Pricing & Premiums
Because of the added risks associated with business use, commercial auto insurance premiums tend to be higher than personal auto insurance. Factors such as the type of business, number of vehicles, type of goods transported, and driving radius can influence commercial rates.
Insurance Claim Rejection
Using a personally insured vehicle for commercial purposes like making deliveries without notifying the insurance company might lead to a claim rejection in the event of an accident. It is essential to ensure that the vehicle’s usage aligns with the policy type.
Named Driver vs. Any Driver Policies
• Personal Auto Insurance: Policies often cover the named drivers, usually family members or those specifically added to the policy.
• Commercial Auto Insurance: Many commercial policies offer “any driver” coverage, meaning any employee of the company can drive the vehicle and be covered.
Home, Business, Life & Auto Insurance Agency in Henderson, North LV, Reno, Spring Valley, Enterprise, Sunrise Manor, Paradise & Las Vegas, NV
Choosing between personal and commercial auto insurance hinges on how you intend to use your vehicle. If a vehicle is used primarily for business, commercial insurance is the right choice. For commercial or personal auto insurance or more, contact Signet Insurance Group today.
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