Commercial auto vs. personal auto insurance

Personal auto coverage protects your privately owned vehicle when operating for personal use. It covers activities that are not related to work errands and tasks. 

Your personal coverage will protect you in the event of an accident or incident during non-work hours or for activities that are for your own non-business use, such as driving to and from the grocery store, taking the kids to the park, and going on recreational drives.

While it may seem like a grey area, personal auto coverage would cover you if you're in an accident on your way to and from your business location outside of business hours.

For example, if you are driving from your house to your retail clothing store and get into an accident, you would need to be covered by personal auto insurance.

Commercial auto insurance will not cover personal, leased, and rented vehicles that you or your employees use.

Additionally, personal auto insurance will not cover accidents that occur in personal vehicles that are being used for business purposes.

To protect against lawsuits or incidents while using personal, leased, and rented automobiles for work, you should consider a hired and non-owned (HNOA) insurance policy.

Many single-person companies, such as sole proprietors, that don't need a separate work vehicle will purchase HNOA coverage to ensure they're protected while driving for work purposes.

HNOA can be purchased as a standalone policy or as an endorsement to your general liability or commercial vehicle insurance. 

Ensuring you have the right coverage is crucial so you aren't denied if you or your employees are in an accident while using your personal car for business use, or your business vehicle for personal purposes. 

Both commercial and personal auto coverage options provide financial protection in the event of an accident or incident. The key difference between the policies lies in when the vehicles are being used, for what purpose, and who owns them.

Personal auto covers you, your family members, and other passengers when you drive your own vehicle for personal reasons.

Commercial car insurance covers business-owned vehicles used during business operations or for commercial use.

Commercial auto insurance policies typically cost more than personal auto insurance policies. This is often due to several factors, the main one being the fact that commercial auto covers multiple vehicles and drivers (employees) rather than just one vehicle and driver.

Additionally, commercial auto coverage tends to have higher coverage limits to account for the greater risk associated with driving for work purposes.

The average small business owner who applies through TechInsurance pays $147 per month for commercial auto insurance.

Factors that impact your commercial auto insurance costs include:

• Your industry risks
• How many vehicles your business owns
• The types of vehicles your business owns
• Employee driving records
• The types of coverage you choose
• The policy limits you select
• Your claims history
• Frequency of business vehicle use

Small business owners can complete one easy online application to get free quotes from the top U.S. insurance companies.

You can also reach out to our licensed insurance agents if you have questions about commercial auto liability coverage or other types of insurance, such as general liability and workers' compensation.