Commercial vs Personal Insurance

Meet Jim, the owner of a small landscaping and handyman business. Jim uses his truck to transport everything he needs to maintain his customer’s lawns, including a mower, ladders, and a permanent toolbox. One day, Jim is in a minor fender-bender on the way to a customer’s home. He calls his car insurance company and is given some unfortunate news—his personal auto insurance policy won’t cover his accident. Why? If you’re a small business owner, you need to know!


How is personal auto insurance different from commercial?

Jim’s personal auto insurance policy would likely not cover his claim for two reasons: 1) the way Jim uses his truck for his business is considered commercial use, not personal or pleasure use, and 2) Jim’s truck hauls a significant number of tools and has permanent attachments (like a ladder rack and toolbox) that he uses to conduct his services. Knowing the difference between personal and commercial auto insurance could help you avoid a situation like Jim’s. Here are some differences to consider when learning more about these two types of insurance policies.

Coverage Limits

Commercial auto insurance policies are specifically for vehicles that are used for business-related purposes. They are designed to meet the unique needs of a business and are written and rated with these needs in mind, so the type of coverage and coverage limits tend to be different than a personal auto insurance policy. In fact, the coverage limits for commercial auto insurance policies tend to be much higher than personal auto insurance policies.

Minimum Requirements

Just as many states require drivers to maintain a minimum amount of auto insurance coverage on their personal vehicle, many states also require businesses to maintain minimum coverage limits on their commercial vehicles. Additional insurance requirements could apply for vehicles that transport people for a fee (like limousines) or for vehicles that transport hazardous materials.


The cost of a commercial auto insurance policy depends on a number of factors including the size of the business, the types of vehicles that are being insured, and the amount of coverage that is needed. Personal auto insurance policies tend to be cheaper than commercial auto policies as there are fewer vehicles, fewer drivers, and less risk associated with the use of the vehicles.


Both commercial auto insurance policies and personal auto insurance policies can include coverage that requires a deductible. A deductible is the amount of money you would pay out-of-pocket up front for the damage to your vehicle in the event of an automobile accident.

Do I need commercial auto insurance?

It depends on the nature of your business and how your vehicles are used. If you use your vehicle to do activities related to your occupation or business (other than commuting), you may need a commercial auto insurance policy. If you have questions, talk to one of our friendly representatives by calling 1-877-GO-DIRECT (1-877-463-4732). They’re ready to help you find a cost-effective plan that meets the unique needs of your business.

How do I get a quote for commercial auto insurance?

Getting a quote for commercial auto insurance is easy! Simply stop by one of these office locations or call 1-877-GO-DIRECT (1-877-463-4732). When getting a quote, it may be helpful to have the driver’s license numbers for all drivers, as well as the VIN numbers for the vehicles you are looking to insure.

*Commercial auto insurance produced by Right Choice Insurance Agency, Inc. and Direct General Insurance Agency, Inc. d/b/a Direct Auto Insurance as agents for Titan Indemnity Company, a Nationwide Insurance Company & its affiliates. Not available in all stores. Pay plans, discounts and coverages subject to terms and conditions.