Most drivers assume their personal auto policy covers anything in an accident, but the moment your car starts helping with work duties like deliveries or a side hustle, there could be a gap in coverage, causing confusion and frustration when trying to file a claim.
Let’s talk about why this happens and the difference between personal and commercial auto insurance.
Personal auto insurance is designed to help cover you and your family during day-to-day driving. This typically includes commuting, running errands, road trips or other personal activities—basically, anything not business-related.
These are the different types of personal auto coverage:
Basically, a personal auto policy is meant for people who use their cars for personal reasons, like driving to work or taking a vacation. It's not meant for work that earns you money or supports a business.
A commercial auto policy is for vehicles used in work-related activities. This may include certain sedans, vans, or trucks, depending on how the vehicle is used for work.
A commercial auto policy isn't just for big or established businesses. Your personal vehicle may need a commercial auto policy if you regularly use it for work (beyond commuting).
Here are some examples of when you might need a commercial auto policy:
A common misconception is that many people think that if they do not have employees, they can drive a vehicle with a logo under a personal use policy.
A commercial auto policy is meant to help handle the risks that come with driving for business purposes.
The main difference between personal and commercial auto insurance is how the vehicle is used.
If you’re using your car for anything work-related, even once in a while, it’s worth double-checking with an insurance agent. The more your car becomes part of your work, the more important it is that your insurance matches what you’re doing with it.
This is important because, without the proper coverage, your claim could be denied after an accident, which can lead to unexpected out-of-pocket costs!
Not necessarily. Rates depend on the driver, vehicle, and how it’s being used. In many cases, commercial auto rates may be comparable to personal auto rates, but a commercial policy would provide the appropriate coverage if you use your vehicle for business purposes.
Choosing the wrong type of coverage can end up costing you much more than your premium. Plus, businesses often face extra expenses after an accident, like damaged equipment, lost materials and more. Those business-related losses typically aren’t included in personal auto policies at all.
So, it’s not just about finding the lowest premium. Making sure you have right coverage in place can help protect both your finances and your livelihood.
If you’re unsure whether you need commercial auto insurance, ask yourself: “Am I using this vehicle for work or business purposes?” When in doubt, consult a Kemper Auto agent. They can review your current policy along with you and help you determine if commercial coverage is necessary.
This material is for general informational purposes only. Products, services, and discounts referenced herein are not available in all states or in all underwriting companies. All statements are subject to the terms, exclusions and conditions of the applicable policy. In all instances, current policy contract language prevails. Other terms, conditions and exclusions may apply.