Commercial Auto Insurance

What Does Commercial Auto Insurance Mean?

Commercial auto insurance is a policy designed for vehicles used for business purposes rather than personal use. It may cover trucks used by companies, a fleet of taxicabs, or even a car typically driven for business activities. This type of insurance is generally more expensive than standard car insurance.

It is also referred to as a business automobile policy.

Insuranceopedia Explains Commercial Auto Insurance

A business that requires a vehicle for its operations needs commercial auto insurance instead of a standard motorist policy, even though the premiums are higher. This is because the mileage driven for business purposes is often significantly greater than that of a personal vehicle, which increases the risk.

While the coverage may seem similar to personal auto insurance, as it also covers damage, injury, and liability, the business nature of the vehicle is what sets it apart. Claims paid under commercial auto insurance tend to be higher. For example, a commercial vehicle may carry goods or passengers that wouldn’t be fully covered under personal auto insurance, or the payout from a personal policy might not be sufficient to cover the losses in the event of an accident.