What is the Difference Between Personal and Commercial Auto Insurance?

A common misunderstanding among our clients regarding insurance is the mistaken belief that auto insurance policies are one size fits all, and it's simply not true. As a basic example, there are personal and commercial auto policies. Each policy has a specific rating and only covers certain types of activities that are specific to that policy. Many times things people believe are covered by one policy are really covered by another and they don't have. Many insurance companies will not cover a person using their personal vehicle for business activities or commercial reasons. A personal auto policy is for personal auto use and a commercial auto policy is for when someone is using the vehicle for business use. For example, if a person is using a vehicle that's insured on their personal auto policy for business activities like running their own paint company or doing their own lawn care business, that would mean they are using their personal vehicle for work purposes. It would be wise for that person to call their insurance agent to find out if they are actually covered for those activities.

The Difference Between Personal and Commercial Insurance

One Size Does Not Fit All

Many people believe they are covered under their personal insurance policy when they are driving their personal vehicle for a business purpose. This is not necessarily true.

Personal auto policy is for personal auto use only.
Commercial auto policy is for when someone is using the vehicle for business use. Examples of that would be driving for a food delivery service, rideshare, farm work, maid service, or construction work.

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One Size Does Not Fit All

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