Car insurance purchased by a company is typically more expensive than an individual’s. Personal auto insurance policies typically do not cover vehicles registered under a business name.
Where and how often you drive and the value protecting your assets can significantly impact how much car insurance providers quote your policy. Longer than usual commutes or daily trips to multiple locations the driver is unfamiliar with increases the risk of an accident. Compared to the $100,000 per person and $300,000 per incident typically recommended for an individual policy, the millions of dollars a business could potentially be sued for may need significantly more extensive protection.
Is there a significant price difference between commercial and personal auto insurance?
Generally speaking, business auto insurance is more expensive than personal auto insurance. Due to the higher coverage limits frequently found in commercial policies, there is more protection in the event of an accident.
A commercial auto policy covers an entire business, whereas a personal auto policy typically only covers the vehicle’s driver. This might involve several drivers, numerous cars, trucks, and staff members with a bad driving history.
Insurance for commercial vehicles need not be prohibitively expensive. It is dependent on the nature of your company’s operations. A small company with only one or two employees who use company vehicles will have a much more affordable insurance premium than a large company with a large fleet of vehicles and many drivers.
Some factors, including the following, impact the price of commercial auto insurance:
- The potential dangers to your market
- Consider: the number of vehicles you have, the kinds of cars you drive, and everything in between
- When do employees typically use their cars?
- Coverage types
- Your chosen coverage maximum
- Documentation of past auto insurance claims
Why Insuring a Car for Business Costs More
Due to the more comprehensive coverage offered by commercial policies, commercial auto insurance premiums are typically higher than those for personal vehicles. In addition, there are:
- Vehicles used for business typically have:
- higher mileage than those driven solely for pleasure;
- unique equipment;
- higher liability risk;
- Sharing one commercial vehicle among several employees is a real possibility.
There’sThere’s More Protection with Commercial Car Insurance
Commercial auto insurance is more expensive but provides additional protection for the vehicle and its occupants. A common form of business vehicle insurance Typical elements of a national urban policy are:
- Insurance for bodily harm in the event of negligence
- Security if a customer is injured and sues your company
- Consequential Loss Insurance
- Insurance for accidents
- In an accident, your vehicle will be covered for repairs.
Personal Car Insurance Has Limitations for Business Purposes
Because of the inherent dangers, it is in your best interest to purchase commercial auto insurance if the majority of the miles you put on your vehicle are driven while conducting business. Additionally, parts of business-related uses and certain vehicles may not be eligible for coverage under a person’s auto insurance policy. Personal auto insurance claims may be rejected even if you only used the company car for personal reasons when the accident occurred.