Most car owners often confuse personal auto insurance with commercial insurance. Both insurance policies are entirely different from each other. As the names suggest, personal auto insurance covers private-owned vehicles, while commercial insurance covers business vehicles. In this article, you'll get into the details of personal auto insurance so that you get to know what it entails.
What Is Personal Auto Insurance?
This insurance policy covers accidents that happen when you're driving your car for personal reasons. That includes any travel that's unrelated to your job duties and commuting to and from work. A personal auto insurance policy insures the owner of the car and their immediate family members.
What If You Use Your Car for Both Business and Personal Reasons?
If you rely on your vehicle to run your personal and business errands, you need to have more than a personal auto insurance policy. You'll have to purchase a commercial auto insurance policy; otherwise, your insurance company won't compensate you if you get into a car accident. With a commercial auto policy, any employee that drives your car will be covered.
Basically, a commercial policy has higher liability limits than your typical personal auto insurance. Make sure you get commercial insurance if you use your personal vehicle to:
- Drive employees or clients
- Transport goods
- Carry passengers for a fee
- Perform a service
- Haul work-related load
Do you use your private vehicle occasionally for work and don't want to purchase a commercial auto policy? Well, you have the option of buying a hired and non-owned auto insurance. With this insurance policy, you'll have liability coverage in the event you get into an accident while running business errands for your boss.
Things Your Personal Auto Insurance Won't Cover
Your insurance company won't compensate you if you decide to use your personal vehicle for commercial purposes. You should only use your personal vehicle for commuting or running errands that aren't work-related.
Unfortunately, your personal policy won't suffice if you decide to rent out your vehicle or provide rides to customers. So, before you provide your care for a ride or rent, it's important to have your insurance agent find the right insurance coverage for you.
Although personal auto insurance is much cheaper than commercial insurance, don't purchase it if you plan to use your vehicle for business. The best thing is to consult your insurance company or an independent auto agent before purchasing a policy. Both parties can help you choose the right coverage for your vehicle. Remember that having gaps in coverage can have grave financial consequences. To learn more, contact an auto insurance company.