Are You Covered? Commercial vs Personal Auto Insurance

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Crash, smash, dent. On quiet streets and busy highways, accidents happen every day. Is your vehicle protected?

Accidents by the Numbers

An estimated 57,732,000 crashes occurred on U.S. highways between 2006 and 2015, according to the AAA Foundation for Traffic Safety 2017 Traffic Safety Culture Index report.

These 57 million crashes resulted in 23,541,000 injuries and 355,562 fatalities.

  • More than 1 in 5 drivers (21.4%) report having been involved in a motor vehicle crash in which someone had to go to the hospital.
  • 11.1% of drivers have been seriously injured in a crash themselves.
  • Nearly 1 in 3 drivers (31.6%) report having a relative who was seriously injured or killed in a motor vehicle crash.

Do You Have the Right Auto Insurance in Place?

You’ve got auto insurance, so you’re covered in the event of an accident.

Or are you?

If you’re relying on the wrong type of auto insurance, you could find yourself holding the bill if an accident should strike the next time you get behind the wheel.

Commercial vs Personal Auto Insurance

If you’ve got a hard-working vehicle that helps you get the job done, you may need more than a personal auto policy to adequately protect it. But sometimes the line between a personal and work vehicle can be a bit hard to decipher, particularly when your vehicle is used for both purposes.

Do you use your personal truck as your work truck?

If you’re a construction professional, this may sound familiar. On workdays, you load it up with tools and equipment and take it from worksite to worksite. And then on weekends, you load it up with groceries, kids, pets, and soccer equipment.

Or maybe your job calls for you to drive your own personal hybrid sedan from one county to the next while you make sales calls and drop off samples and merchandise.

Perhaps you’re a small business owner who lets your employees use your SUV from time to time to pick up supplies or lunch for the team.

These are all examples of personal vehicles that do double-duty as work vehicles. And examples of people who need more protection than is offered with a personal auto policy.

Personal auto policies generally don’t cover business driving. If you’re using your vehicle for work purposes when an accident occurs, your personal insurance company may deny your claim.

Do You Need Commercial Auto Coverage?

If the only work-related driving you do is commuting from home to the office each day, then a personal policy is likely enough for you.

However, if you can answer yes to either of these questions, you probably need commercial auto coverage:

  • Do you frequently use your personal vehicle for business/ work purposes?
  • Does your business own the vehicle?

What Does Auto Insurance Cover?

Just like personal auto insurance, you can choose the right amount of commercial coverage for your specific needs.

Both commercial and personal auto insurance typically offer the following major types of coverage:

  • Liability coverage for property damage or bodily injury that you’ve caused to someone else
  • Collision coverage for damage to your car, no matter who’s at fault
  • Comprehensive coverage for damage not caused by a crash
  • Uninsured motor coverage for hit-and-runs or run-ins with an uninsured/ underinsured driver

Liability Coverage

Liability coverage is required by law if you own or operate a vehicle in nearly every state in the U.S. Liability insurance protects you against claims and lawsuits for third-party damages and bodily injuries. If you’re responsible for an accident that leads to bodily injury and damage to someone else’s vehicle, liability coverage is there to cover the costs of medical bills, vehicle repairs, and even lawyers, court costs, and judgments in the event of a lawsuit.

According to the Insurance Research Council, the average cost per bodily injury liability claim increased 32.1% from 2005 to 2013 from $11,738 to $15,506.

Without the right auto liability coverage in place, you could be held responsible for the high-cost of an accident if you’re at fault.

Collision Coverage

Collision coverage is there to protect you in the event your vehicle has a run-in with another vehicle, a stationary object (like a tree, pole, or streetlight), or goes flipping into a ditch. With collision coverage, you can submit a claim and get reimbursed for vehicle repairs -- no matter who was at fault.

According to AAA data for passenger vehicle collision losses, the average loss for a collision claim is $5,256. Sure, you may be able to afford to pay that out of pocket if you swerve off the road and into a nearby tree… but with collision coverage, that kind of accident would be covered.

Comprehensive Coverage

Not all damage comes in the form of a car accident. Comprehensive coverage is there to protect you from losses arising from non-collision events.

Imagine waking up one morning to find your new luxury SUV has been stolen out of your driveway while you slept. Or that a flash flood or mudslide has carried away your work truck. Comprehensive coverage is designed to cover falling trees, fires, vandalism, theft, natural disasters, and even damage done to your car by animals.

Comprehensive coverage isn’t required, but many drivers see the value in protecting themselves against non-collision damage. 78% of insured drivers purchase comprehensive coverage for their vehicles, according to the Insurance Information Institute.

Uninsured Motorist Coverage

Even though liability insurance is required by law to operate a vehicle in most states, that doesn’t mean everyone on the road is driving legally and responsibly. Uninsured and underinsured motorist coverage is there to protect you in the event you’re the victim of a car crash caused by someone without insurance coverage.

Imagine a worst-case scenario. You’re driving your brand new luxury vehicle through a busy intersection. Out of nowhere, a car runs a red light at a very high speed, slamming into yours. You’re hurt. Your vehicle is a twisted pile of metal. And the person who was driving the other car - the one who caused the accident - isn’t insured.

Normally, the insurer for the at-fault driver would be responsible for the damage. If the at-fault driver has no insurance or is only carrying the bare minimum required, there could be a large coverage gap for the medical care and car repairs you need.

Uninsured motorist coverage comes in a few different forms:

  • Uninsured motorist bodily injury - pays for bodily injuries for people protected under your policy caused by an uninsured driver.
  • Uninsured motorist property damage - pays for damage to your vehicle caused by an uninsured driver.
  • Underinsured motorist - pays when the liability limits of the other driver’s policy aren’t high enough to cover your bodily injuries.

Are You Covered Against Hit and Runs?

According to AAA, more than one hit-and-run crash happens somewhere in the US every minute. In 2016, there were 2,049 fatalities resulting from hit-and-run crashes, the highest number ever recorded.

If you come out from a meeting with a client to find your work truck has been severely sideswiped while you were reviewing budgets and planning documents, are you covered?

If you have collision coverage for your vehicle, you can file a claim with your insurance company no matter who was at fault. You’ll have to pay out-of-pocket for your deductible, but beyond that, your collision coverage will pay to repair the damages to your vehicle.

What if you’re injured?

Liability coverage will only pay for medical expenses for third-party people if you’re at fault for an accident. In the case of a hit-and-run where you, or your passengers, are injured, liability coverage isn’t designed to cover your medical bills.

In this case, medical payments coverage or personal injury protection (PIP), which is also known as no-fault insurance, could be the answer. Medical payments and PIP coverage can help pay for bodily injuries to you or your passengers, no matter who’s at fault in an accident.

Don’t Drive Another Mile Without Adequate Coverage

Still think you’re covered against all the risks of the road?

If you’re relying on personal auto insurance to protect a vehicle you use for work purposes, you may not be.

If you’re only carrying the minimum liability protection required by your state, you may not be.

Take a moment today and reassess your auto coverage. Talk to an insurance agent about your specific vehicle and driving needs. An accident can happen in a blink of an eye, so there’s never a bad time to be sure that you’ve got enough auto coverage in place to protect you, your passengers, and your vehicles.

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