What Car Insurance Coverage Do I Need?

Decide how much liability coverage is enough for similar type of drivers.

Commercial vs individual auto insurance

Is commercial auto insurance more expensive than individual auto insurance or is it simply a different type of car insurance?


Commercial and personal car insurance come with different types of risks. The insurance policies are carefully drafted with unique policies and conditions. Both individuals and businesses require car insurance. The risk and liability involved in the insurance policies are governed by various factors. The final figure depends on the insurance service provider and the borrower’s credibility.

In the insurance world, there are plenty of terms and conditions no one understands. One has to be very careful with the insurance policy he/she chooses. When you apply for personal or commercial insurance, you must take a good look at the terms and conditions. This way, the policies can be understood better and wiser choices can be made.

Personal Car Insurance

As suggested by its name, personal car insurance is designed for families and individuals. All states expect car owners to carry an insurance policy. If you wish to drive your vehicle, you must have a valid insurance plan. The final rate and terms of the policy are controlled by various factors. Some of these factors depend on the driver. The driver can reduce or increase the premiums.

For example, drivers with good driving histories, below 30 years of age, living in a clean neighborhood with low crime rates – are likely to bag better car insurance deals.

Personal car insurance includes comprehensive and collision options.

  1. Collision car insurance covers the vehicle after an accident.
  2. Comprehensive coverage takes care of damages caused by natural disasters, theft, and vandalism.

Commercial Car Insurance

Commercial car insurance is meant for businesses with vehicles and trucks. The insurance is owned under the company’s name. Only certain employees are covered by the commercial car insurance plan. There are two types of insurance policies: physical damage and liability coverage.

  1. Liability coverage comes into the picture when you damage another vehicle or cause bodily injuries.
  2. Physical coverage takes care of vehicle theft and collision. The vehicle should be driven for official (company) purposes.

Apart from liability and physical coverage, commercial car insurance includes options like roadside assistance, uninsured motorist coverage, and medical payments. The rates of commercial car insurance policies can decrease or increase, due to the company.

For example, an established business will be asked to pay lower premiums than a new company. And, companies will fewer vehicle damages or accidents will receive low monthly premiums.

Difference between commercial and personal auto insurance


Individual auto insuranceBusiness auto insurance
Grabbing only bought cakes for co-workersNewspaper Delivery or Pizza Delivery to paying customers
Transporting a friend / family to a station or concertTransporting peaple to a station or concert as taxi services driver
Weekend road tripsRegularly driving long distances for work
Come to the construction site where you workTransportation of equipment and tools to the construction site where you work

Commercial car insurance comes with many terms and conditions. In fact, they are less common than personal policies. People who drive commercial vehicles are expected to be more responsible. Every company comes with a unique set of rules and regulations. Drivers must abide by these policies. Also, the vehicle has to be registered under the company’s name. This form of registration differs from the personal ones. Companies that lease vehicles will be subject to different insurance rates. That is because employees are bound to make continuous claims. This makes commercial insurance more expensive than the personal ones. Vehicles with commercial insurance should not be used for reasons other than work.

Who Needs Commercial Coverage?

A person will need a commercial coverage if he owns a company or a business in which various types of vehicles are used directly for business purposes of day to day operations. For instance, you will need a commercial coverage if you meet the following thresholds. One is if whatever you are doing involves singing a vehicle or a commercial vehicle for the purposes that directly impacts on the growth of the business. For instance, you need a commercial coverage if you are always towing carts carrying equipment from one place to another. Secondly, a person will need a commercial coverage if the vehicles are used in delivering services to clients who seek services such as traveling and tour services offered by your company. Thirdly, commercial coverage applies to cars that are attached or owned by a company, a partnership business or a society. If a vehicle is owned by more than one person who is enjoined in business, the one will need a commercial coverage.

Who Doesn’t Need Commercial Coverage

It is important to understand that commercial coverage does not apply to heavy commercial trucks such as Lorries and pick-ups. Commercial coverage, therefore, is suitable for those individuals who are operating a commercial business and not simply owning a vehicle that looks like a commercial car. In that case, you don’t need a commercial cover if your car does not generate income as a result of working directly to contribute to the firm directly.

Secondly, a person who needs a commercial cover is that person who owns a firm and there are vehicles attached to this firms. The firm employees must also be using or operating using the vehicles for such a firm or individual to consider taking a commercial coverage of your vehicle. There is, therefore, need to take the right cover while distinguishing between commercial and personal auto insurance.

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