Personal Auto Insurance vs. Commercial Auto Insurance: Know the differences


While the two policies do offer coverage for your vehicles, it’s important to know when each insurance policy has to be used when a vehicle is associated with certain risks. Your personal auto insurance can’t cover a truck that you use on-site as a company vehicle and your commercial auto insurance can’t be used for the family car.

Personal Auto Insurance

Personal auto insurance is pretty explanatory in the sense that we use this policy to insure the vehicles we have for personal use. That could be driving to the store, to a restaurant, or to pick the kids up from school. The main purpose for this insurance policy is to protect you and your vehicle from any financial losses that might occur when involved in an accident.

There are different types of personal auto insurance to choose from, such as liability or comprehensive coverage. Liability is usually required in most states, but there are plenty of other options to choose from if you want more coverage.

Commercial Auto Insurance

Commercial auto insurance is meant to provide coverage for accidents that happen when an employee or the business owner is driving the company vehicle. There can be multiple vehicles added to the policy, sometimes with no limit, and any additional equipment that comes with the vehicle, like lift gates, can also be included with the coverage. Commercial auto insurance can provide coverage for:

  • Accidents (liability coverage)
  • Medical costs (for you and passengers)
  • Physical damages (accidents, vandalism, natural disasters)
  • Any accidents that involve uninsured motorists.

Commercial auto insurance will not cover any of your personal or leased vehicles.

Hired and Non-Owned Auto Insurance

Hired and non-owned auto insurance is somewhat in the middle of personal auto and commercial auto insurance. While commercial auto insurance does not cover your personal vehicle and vice versa, there is an option to purchase hired and non-owned auto insurance if you or other employees use personal vehicles to complete tasks for work. This policy is also good for businesses who rent or lease vehicles for business matters only. This policy will only provide liability coverage, not cover vehicle damages sustained in an accident.

Don’t wait for an accident to happen!

Having some type of car insurance, whether it be for personal or business reasons, is a necessity in the sense that it protects you from paying hefty costs for damages to the vehicle in an accident and any medical costs that have accrued for anyone involved, including yourself. It can also protect you from paying out-of-pocket for theft, vandalism, or physical damages from natural disasters.

If you’re looking for an auto insurance policy that meets all your needs, then give Galina-Ba;boa Global Insurance a call today at 512-366-8139.We can help you find an insurance policy by comparing deals and finding discounts!