If you’re self-employed or a small-business owner and the nature of your job requires the use of a vehicle, it is a smart choice to take out commercial auto insurance. The coverage of this policy depends on the specifications of your business. Your policy can include damage to your car, damage to other people’s property, and injury to others. Standard commercial auto insurance covers physical damage and liability for amounts, situations, and usage not covered by a personal auto insurance policy. It covers different vehicles used to carry out work duties.

 Personal Auto Insurance Vs. Commercial Auto Insurance

Insurance companies tend to charge significantly higher rates for auto coverage for a commercial vehicle than a personal car. This is because business drivers face bigger risks than personal drivers. The extent of coverage for personal auto insurance is very limited compared to a commercial vehicle policy.

Most jurisdictions mandate drivers to carry personal vehicle coverage, but this policy will not kick in when damages occur while driving for business purposes. If you frequently use your car for any work-related activity beyond commuting, you should take out the appropriate coverage policy. Chauffeuring, carrying heavy-duty items, and making deliveries are some work duties that are covered under commercial auto insurance.

 Risks Faced by Commercial Vehicle Drivers

Commercial vehicles tend to go through a lot more wear and tear than other cars that are only used to commute from one place to another. Several visits to clients’ offices to render a service or to deliver products means you spend more time on the road, and this increases your risk of having an accident.

If your employee needs to use your car to run work errands, they must take out a hired and non-owned policy for your vehicle. Hired and non-owned policy is common in foodservice businesses where employees tend to make deliveries using their employer’s personal vehicles.

How Premiums Are Determined

Providers will look at various factors before setting their premium rate. These include:

• Mileage
• Owner of the vehicle
• Driving record
• Geographic location
• Driver’s age and profession
• Vehicle size

If you are a high-risk policyholder with a bad driving record, you may be charged more than others. Younger drivers, especially between the age of 16-24 make up a higher percentage of road accident victims. Therefore, if you are a young driver or have a young teen who is new to driving, be prepared to pay more.

 Do I Really Need Commercial Auto Insurance?

If you use your personal car for work purposes occasionally, you may not need to purchase a commercial auto policy, because your insurance carrier might be able to tailor your policy to accommodate your needs. Almost every state requires commercial auto insurance for businesses that have vehicles titled to the company and for employees who frequently drive to job sites. Moving work equipment from one place to another or transporting employees and clients calls for commercial auto insurance coverage.

For all of your auto insurance needs, visit Young Insurance. We are ready to help you find reliable insurance today.