Who Needs Commercial Auto Insurance?

Running a small business is tricky enough. Between managing employees, checking inventory, and serving your customers, you may feel like there's not enough time in the day--especially for matters as complicated as insurance can be. Determining if you and your business could benefit from commercial auto insurance, though, isn't as tricky as you may think. Plus, it's especially important if your business relies on your vehicles.

Businesses engaged in the following types of industries typically purchase some form of commercial auto insurance: catering, landscaping, building, plumbing, farming, food delivery, and funeral services. Does your business fall into one of these categories? Read on to learn more about who could (and likely could not) benefit from commercial auto coverage.

You may need commercial auto insurance if…

When you use your vehicle for activities related to your business or job (or own a fleet of vehicles related to your business), you may need and qualify for a commercial auto insurance policy. Below are some scenarios that may indicate your eligibility:

  • Your company's name is on the vehicle title
  • Your vehicle has a commercial license plate or tag, or is registered as a commercial auto
  • You rent, lease, or otherwise give your vehicle to someone to use and you receive compensation
  • You use your vehicle to provide a service
  • Your employees drive company-owned vehicles
  • You haul tools or equipment that you use to conduct your business

You may not need commercial auto insurance if...

You may not need a commercial auto policy in addition to your personal auto policy if

  • you do not use your vehicle for business-related activities, or
  • you do not receive payment for the services you provide with your vehicle.

Below are a handful of scenarios that may not require commercial auto coverage, but keep in mind that every situation is different. Before deciding that you don't need a commercial auto policy, talk to an insurance agent, check your personal auto coverage limitations, and research your state's regulations. The following scenarios may not require commercial auto coverage:

  • Your vehicle is registered in your name
  • You use your vehicle to commute to work and home, and to run errands related to your everyday life
  • You carpool with others to work and everyone shares travel expenses
  • You're a real estate agent, lawyer, consultant, accountant, or clergy and occasionally transport clients in your vehicle
  • You volunteer for a nonprofit and help drive veterans and disabled community members to doctor's appointments
  • You volunteer for programs like Meals on Wheels to deliver meals and provide valuable services to the elderly in your city
  • You're a part-time consultant for a beauty product company and occasionally travel to customer's homes

Why worry about commercial auto insurance at all?

Your personal auto policy specifically excludes certain actions, like those you do for work, from coverage. This means that an accident or other loss may not be covered by your insurance if it's not a commercial auto policy...which could leave you stuck holding the bill for vehicle repairs, medical expenses, and other accident-related expenses.

Check your policy & state regulations for more details

Talk to your insurance agent about your state's specific definitions and requirements for commercial and personal auto insurance. At Direct Auto Insurance, we offer both types of policies and have knowledgeable agents that can speak to the specifics of each. Call 1-877-GO-DIRECT (1877-463-4732) to get a fast and free quote today!

More Information

*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.