Generally, getting auto insurance is a straightforward process. There is, however, one small detail that can lead to major problems if it is not considered properly: the difference between personal insurance and commercial insurance. In fact, it is critical your vehicle or vehicles have the right type of insurance; otherwise they and their drivers risk not being covered by your insurance at all.
What Is Commercial Insurance?
At first, it would seem easy to determine whether a car needs commercial auto insurance or not. This type of insurance policy is necessary for all vehicles that are used for commercial purposes. However, there are times when you walk a fine line between personal and commercial use and it can be difficult for you to determine what kind of insurance is best. There are several factors that you should take into account.
First of all, you should consider all the people that use that vehicle. If it is being driven by people that are employed by you, even for personal purposes, this would constitute a need for a commercial insurance policy. Furthermore, if the car is registered under the name of a company then it would also call for this kind of insurance. However, that is not to say that if the car is registered under the owner’s name automatically excludes it from being a commercial vehicle.
The best way to determine what kind of insurance to get is to consider whether the car gets regular business use. Unfortunately, this is a definition that will likely change from insurance company to insurance company, but it generally means using the vehicle for commercial purposes for a business several times a month.
Who Needs Commercial Insurance?
Most people that have issues with this are small business owners that often use their own personal vehicles at their jobs, as well. However, if the car is used to carry equipment, material, transport people or goods or has winches, cranes etc. mounted to it, then it is most definitely a commercial vehicle and should be treated as such. One notable exception to this rule is people that transport clients on a regular basis such as lawyers, real estate agents, doctors etc.
There is no reason to avoid getting a commercial insurance policy. It offers the same basic coverage in case of an accident and will pay for repairs as well as damages to any third party involved in the accident. The extra costs of the premiums are very insignificant compared to the prospect of driving around town in a car with the wrong type of insurance, which makes it basically uninsured.
If you are looking for a competitive quote for commercial car insurance, you can always try online quote comparison services such as Cheapest Auto Insurance in California. Services such as these can help with insurance needs of any type, including commercial auto insurance.