Express courier next to his delivery van. Concept: Commercial car insurance ve personal car insurance.
Cedric Jackson
By: cjackson
Read in 8 minutes

Commercial Car Insurance Vs. Personal Car Insurance

Figuring out whether you need commercial car insurance or personal car insurance for your business can be a process. There are several factors that go into deciding which type is the best insurance for you. Different entrepreneurs have different insurance needs depending on the nature and size of their business. Depending on those factors and the type of coverage you are looking for, you will have different concerns when looking over policies.

In this article, you will find a guide to figuring out when to get commercial car insurance or personal car insurance. You will also find an explanation of the pros and cons of each type of insurance coverage along with what they typically offer.

Have in mind that deciding on the right car insurance is as important as deciding what type of other business insurances you need for your company.

What’s the Difference Between Commercial Car Insurance and Personal Car Insurance?

There are several important differences between personal car insurance and commercial car insurance policies. Coverage amounts and the purpose of coverage are what create these distinctions. Businesses almost always have more liability risks than individual drivers, meaning businesses’ liability limits are higher. However, there are a number of other important ways that commercial car insurance and personal car insurance differ. Many of these have to do with commercial car insurance policies being designed to protect businesses.

Commercial Car Insurance: Features and Uses

Commercial car insurance has some features and uses that set it apart from personal car insurance. These include:

  • Additional insured requirements
  • Higher limits, up to $2 million
  • Equipment attached to or used with vehicles
  • Property and liability trailer exposure
  • Coverage for hired vehicles
  • Loading and unloading exposure
  • Coverage for vehicles your business does not own

If your business needs coverage for higher liability limits, you should seriously consider opting for commercial car insurance over personal car insurance. This is often the case as companies continue to grow. When many entrepreneurs start, their private vehicle also doubles as their business vehicle. As businesses grow, however, this sort of setup does not work well. Eventually, businesses can become large enough that personal vehicles are not factored into operations at all. These different scenarios make it important to figure out what are the best car insurance plans for company vehicles to ensure you get the best coverage.

Personal Car Insurance: Features and Uses

Personal car insurance has a few main components to it. These normally include options to cover:

  • Liability coverage in case you cause damage or injury with your car
  • Bodily injury
  • Property damage
  • Personal injury protection
  • Collision coverage for accidents
  • Comprehensive coverage for theft and vandalism
  • Additional coverage for additional insurance needs

These policy features have some overlap with commercial car insurance policies. However, personal car insurance policies are not meant to cover the additional risk associated with business vehicles. This means that, outside of special circumstances, business vehicles are best covered with a commercial car insurance policy.

FAQs on Commercial Car Insurance Vs. Personal Car Insurance

Does My Personal Car Insurance Cover Business Use?

Your personal car insurance will cover some business uses, as will your employees’ personal car insurance policies. However, individual car insurance providers will not defend businesses in the event of any claims. They will not pay any damages to your business, either. These facts mean you should be very careful about using personal vehicles for business uses. Since employees’ insurance will not defend your business in the event of claims, you should not put yourself at unnecessary exposure to losses.

Does My Commercial Car Insurance Cover Personal Use or Do I Need Both?

Personal use is covered by commercial car insurance. There can be some extra steps required by particular providers, so be sure to check. This is especially the case if family members will use your commercial vehicle for personal use. Be careful to check that your policy will cover other drivers using commercial vehicles for own purposes.

Is Commercial Car Insurance More Expensive?

The average cost of commercial car insurance is between $900-1,200 for $1 million liability every year. Personal car insurance is often about $940 per year. While commercial car insurance can be more expensive than personal car insurance, it offers much higher coverage in a variety of business contexts. This additional coverage is necessary to protect your business assets from potential losses and yourself from a possible litigation. Though commercial car insurance can be more expensive than personal car insurance, the benefits compensate for the increase in cost.

What Happens if I Use My Personal Car Insurance for Business Use?

Being behind the wheel for business puts you at greater risk for accidents and vehicular damage. Depending on your provider and policy, this could violate your policy’s terms and conditions. You should check with your personal car insurance provider if you have any questions about your terms. They can also help you figure out ways to ensure your vehicle for exactly the business and personal use balance you have in mind.

Do I Need Special Car Insurance for Transporting People?

If you are transporting clients, you need commercial car insurance. Personal car insurance is not designed for the additional risk of regularly letting strangers into your car. Neither does personal car insurance accommodate a business model built on transporting people. Make sure to check with your personal car insurance provider to see if they can work with you to fit your specific situation.


It is important to understand the distinctions between personal car insurance and business auto policies. Coverage is different, as are the terms and conditions. Since businesses tend to have more risks using vehicles than individuals, they tend to pay slightly more. However, business auto policies are worthwhile since they offer protection from liability and other concerns that are not offered by personal car insurance. Understanding these distinctions can help you pick the best small business insurance for your unique needs.

At Camino Financial, part of our mission of “No business left behind” is keeping you updated with the best market information available. Our tools and resources are specially selected to help you make the best decisions for your business’s growth and success. To stay on top of discounts, best prices, and best practices for your small business subscribe to our free weekly newsletter today!


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