Tuesday, August 18, 2015

Commercial Auto vs. Personal Auto

We have many people ask us if their personal auto they use for their own business is less expensive on a personal auto policy or a commercial auto policy. Before getting into price here are some items we need to ask to see what policy it SHOULD be on:

How does my insurance company define "commercial use"?

Some insurers define it as transporting goods for compensation or a fee. But, because the definition of “commercial use” varies by company, your agent is the best resource for this answer. Your agent can tell you whether your insurer requires a commercial policy for businesses like these:

  • pizza and newspaper delivery
  • real estate
  • catering
  • door-to-door consulting services
  • landscaping or snowplowing services
  • day care or church van services
What kind of liability limits do I need?


As a business owner, you may want higher liability limits to meet contractual needs or just to better protect the business you’ve built. In general, a commercial auto policy can offer higher liability limits than a personal auto policy.

Does my personal policy cover me for issues specific to my business?

For example, if a trailer damages another vehicle while on a job, a personal liability policy may not cover the repairs. A commercial policy usually will.

I have employees that drive my vehicles. Does my policy cover that?

In general, if other people drive your vehicles for work, you need a commercial auto policy.

Do the passengers or contents in my vehicle matter?

Yes. Vehicles used for picking up or dropping off people or goods, or hauling tools or equipment, probably need a commercial policy.

Do I need certifications or filings?

Documentation requirements—like certificates of insurance or filings for trucking—are generally good indicators that a commercial policy is needed.

Give us a call at 435-674-2221 or e-mail us at info@msiagency.com and we can help you get the best coverage at the best price based on your specific condition. You can also visit our website at www.msiagency.com.