When do you need Commercial Auto Insurance?

Knowing when to go from a personal auto policy to a commercial auto policy can be a point of confusion for small business owners. Insuring your vehicle under the wrong policy can create the potential for a large uncovered claim.

Some personal lines insurers allow for what is called “business use” on an auto policy. The business use that this refers to is very limited and mostly is intended for people who have to commute to job sites or clients. A salesperson is the type of person this use typically applies too. This will generally not cover autos that have a commercial use.

So how do you know you need a commercial auto insurance policy?

1. The vehicle is titled in the business’s name. Most personal policies will not cover a vehicle not titled in a personal name, no matter the use.

2. An employee drives the vehicle. If an employee has to drive the vehicle for work purposes its ineligible for a personal lines policy and can result in a denied claim if they have an accident.

3. The vehicle is used to deliver people or goods for a fee. Almost all personal lines policies exclude delivery of any type of goods from coverage.

4. The vehicle is used to carry significant amounts of equipment or has a trailer attached for business purposes.

5. The vehicle gross weight is very high. Personal lines insurers are not in the business of insuring heavy duty trucks or semis.

These are just a few examples of when to know you need commercial auto insurance. Every situation is different however so please contact an agent at Keller National in order to figure out the right policy for your needs.

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