Anyone owning a vehicle with their name on it that is used for a business or that has it registered in the business name should buy a Commercial Auto Insurance Policy.

Do you Need Commercial Auto Insurance or Personal Auto Insurance?

Many customers call us to ask, “What is commercial auto insurance?” They aren’t sure whether they actually need commercial auto insurance, or business auto insurance, for their companies. Figuring out what kind of insurance — and how much — you need can be confusing. That’s why AIP provides the simple guide below to help you decide whether personal auto insurance or commercial auto insurance is right for you.

How to Determine if You Need Business Auto Insurance?

Personal auto insurance policies can provide enough auto insurance coverage for some businesses, especially if you’re also driving your vehicle for personal use. However, if you require specific Commercial auto insurance coverage’s, high Liability insurance limits, operate an unusual vehicle or haul special equipment, transport goods or people, or have other special needs, then you’ll need insurance for commercial cars, trucks and so forth.

The chart below illustrates the key differences between the protection offered by a personal auto insurance policy and a commercial vehicle insurance policy.

	Personal Auto	Commercial Auto
Who Owns the Vehicle(s)?
Individual Owns Vehicle
Sole Proprietor Owns Vehicle
Corporation Owns Vehicle	–
Rented Business Vehicle	–
Employee Owns Vehicle Used for Business	–
Vehicles
Single Vehicle
Multiple Vehicles	up to 4	up to 20
Vehicles with Special Equipment	–
Maximum Gross Vehicle Weight (GVW)	12,000 lbs.	Unlimited
Maximum Load Capacity	2,000 lbs.	Unlimited
Drivers
Named Insured Only
Employees or Coworkers	–
Resident Relative
Vehicle Use
Business Travel
Farming	–
Pickup or Delivery of Goods	–
Pickup or Delivery of People	–
Other
Maximum Liability – Combined Single Limit (CSL)	$500,000	$1,000,000
Maximum Number of Job Sites Per Day	2	Unlimited
Maximum Weight of Supplies & Equipment	500 lbs.	Unlimited
Coverage for a third Party as an Additional Insured	–
Waiver of Subrogation Against a Third Party	–
Liability Coverage for Hired or Non-Owned Autos	–
Liability Coverage for Mobile Equipment	–

A Note About Personal Auto Insurance Policies

If you decide to purchase a personal auto insurance policy, it’s important that you tell your insurance company that you’ll be driving the vehicle for business so that they can make a note on your policy. Many  policies do exclude commercial auto insurance, if you’re in an accident while using your vehicle for business, your accident may not be covered by your personal auto policy.