Commercial auto insurance in 2024. A complete guide.

Auto commercial insurance

Whether you drive a company or personal vehicle for business purposes, you may require commercial auto insurance.

Understanding how commercial auto insurance works is essential when considering it for any business activity.

In this guide to commercial auto insurance, we will cover what it is, why you need it, and help you compare coverage to find the best commercial auto insurance.

Table of contents

What is commercial auto insurance?
What does commercial auto insurance cover?
Commercial auto liability insurance
Is commercial vehicle insurance required?
Commercial auto insurance vs personal
Does commercial auto insurance cover personal use?
Is commercial auto insurance cheaper than personal?
How much is commercial auto insurance?

What is commercial auto insurance?

Commercial auto insurance is vehicle insurance that covers physical damage and liability claims whether you, your employees, or another party was at fault.

Commercial auto insurance protects the insured in ways that a personal auto insurance policy can’t and explicitly covers your business vehicles up to your policy limits.

This business insurance covers various commercial vehicles, such as company cars, commercial trucks, and automobiles used for business purposes.

What does commercial auto insurance cover?

Commercial auto insurance provides various coverages for vehicles used by your business.

There are three main components of most standard commercial auto insurance policies.

Physical damage insurance. This portion of your insurance includes collision and comprehensive coverage.
Commercial auto liability insurance. This portion of the insurance includes property damage, bodily injury, underinsured motorist, and uninsured motorist coverage.
Other coverage. Other coverages include towing and labor costs, medical payments, reimbursement for rentals, lease gap coverage, and auto loans.

Commercial auto liability insurance

As mentioned, this portion of auto commercial insurance includes damage and bodily injury coverage.

Commercial auto liability insurance will financially protect you from any property damage to another vehicle or bodily injury to others if you are involved in an accident.

Bodily injury coverage pays others’ loss of wages and medical expenses, plus your legal fees, if you face a claim and a subsequent lawsuit.

Commercial auto insurance coverages

Customized commercial auto insurance is available, with various options. In addition to liability insurance, here are the common coverages you can choose from.

Collision insurance

This portion of your coverage helps pay for damage to your covered vehicle if you crash into another. In addition, it covers you if another vehicle collides with yours or your vehicle rolls over, regardless of who is at fault. Collision coverage may be required if your vehicle is leased or financed.

Comprehensive insurance

This portion of your policy pays for vehicle damages from causes other than a collision. Damage causes usually include vandalism, theft, weather events, fire, or damage from an animal.

Underinsured motorist coverage

This portion of your policy protects you if an at-fault driver doesn’t have adequate liability insurance to cover any damage or medical bills.

Uninsured motorist coverage

This portion of your policy helps to pay for any property damage or injuries if an uninsured driver crashes into you or, in some cases, an unidentified driver.

Optional add-ons

Beyond the standard components of a business auto policy, you can usually customize with the following options.

Roadside assistance coverage is additional protection for cases if you face problems not typically covered by your commercial auto policy. Such cases include locking yourself out of your car, dead batteries, emergencies, and flat tires.

New vehicle replacement cost helps replace your vehicle with a new or comparable vehicle if you suffer a total loss. It may also provide gap coverage for an amount above the actual cash value of your vehicle you may owe.

Hired auto coverage specifically covers collision and comprehensive damage for rented or leased vehicles.

Personal injury or medical payments coverage helps pay for covered persons’ reasonable and necessary medical bills or sometimes funeral expenses.

Is commercial vehicle insurance required?

In short, you are required to carry commercial vehicle insurance if you use business vehicles. In addition, third-party insurance is obligatory in every case.

You will also need commercial vehicle insurance for any business vehicles an employee owns, leases, or rents if they use them during business activities.

As a business, it’s best to protect your livelihood with adequate insurance. It’s advisable not to rely on personal or minimal auto coverage.

You should also consider commercial vehicle insurance as an independent contractor or self-employed person.

Businesses that benefit from commercial vehicle insurance include:

Retail and service-led businesses
Food, drink, and grocery distributors
Commercial wholesalers & distributors
Contractors (plumbers, electricians, builders, etc.)

Here are some cases when you will need a commercial vehicle policy:

You’re using your vehicle to transport goods
You transport goods or people for money in return
You require higher limits of liability due to your work
Employees operate your business vehicle or drive their own
The vehicle in use for business activities is registered to the business
You transport items for work purposes, like heavy tools or equipment

Your personal auto policy can only offer you enough coverage if you seldom use your car for business.

Commercial auto insurance vs personal

While personal auto insurance is sufficient in some cases, commercial auto insurance is necessary for others.

Here are some scenarios summarizing the differences between personal and commercial auto insurance.

Personal auto insurance

You can usually use your personal auto insurance for the following:

Driving family to the airport
Traveling across the country for a weekend trip
Buying and picking up lunch for your co-workers
Commuting to the construction site you work on

Commercial auto insurance

You can usually use your commercial auto insurance for the following:

Driving clients to work for business activities
Driving to job sites throughout the week for work
Delivering groceries and goods to paying customers
Driving a work vehicle with work tools to the construction site you work on

Does commercial auto insurance cover personal use?

By design, commercial auto insurance specifically covers business related activity. However, there are cases when it can cover personal use.

Vehicles that are protected by commercial auto insurance include vehicles your business owns, borrows, leases, or rents. It may also cover vehicles your employees drive for both personal and business use, whether you or they own the vehicle.

The common types of vehicles that are insured include:

Cars
Work vans
Cargo vans
Box trucks
Food trucks
Utility trucks
Pickup trucks

Commercial auto insurance is also known as truck insurance or commercial car insurance.

While this insurance type is commonly associated with branded work vehicles or trucks, regular automobiles may also use a commercial policy if they’re used for business purposes.

Key takeaways

Commercial auto insurance is vehicle insurance that covers physical damage and liability claims whether you, your employees, or another party was at fault.

Commercial auto insurance covers your business and employees’ vehicles up to your policy limits.

This business insurance covers various commercial vehicles, such as company cars, trucks, vans, and personal cars.

There are a few main components of most standard commercial auto insurance policies, which include physical damage insurance, liability insurance, and other specialized coverages.

While personal and commercial policies contain similar coverages, there are significant differences.

Commercial policies usually have higher liability limits and are tax-deductible, as business vehicles require more protection.

Businesses can cover vehicles not owned by them, i.e. if an employee drives their car for work.

Is commercial auto insurance cheaper than personal?

Commercial auto insurance is generally higher in cost than personal auto insurance.

Commercial policies are designed to cover business risks and have higher limits. This insurance provides more coverage than personal insurance for car accidents and associated damages.

A personal auto policy usually covers a solo driver who drives their own vehicle, but a commercial policy typically covers an entire business.

Your coverage costs depend on the value of each vehicle you insure and several other factors. The higher the risk with any insurance type, the higher the cost of premiums.

For example, if you drive a distribution van for a whole day’s work, the risk of an accident is much higher than using your personal car to commute to work.

How much is commercial auto insurance?

The overall cost of commercial auto insurance varies based on several factors.

Some of the defining factors include the following:

Vehicle use
Type of vehicle/s
Type of business
Value of the vehicle/s
Gross vehicle weight
Driver’s driving record/s
Experience level of the driver/s
How many drivers drive the vehicle
Vehicle make, model, and year
Past and present insurance claims history
Coverage options, including limits and deductibles

Commercial auto insurance quote

When looking for the cheap/cheapest commercial auto insurance, it’s best to shop around and compare quotes.

Comparing commercial auto insurance quotes can help you get the best commercial auto insurance for the best price.

Why insure your vehicle with Pitsas Insurances:

Quick settlement of claims
Flexible multiple drivers cover
We offer safe driver bonuses
Low-cost commercial vehicle insurance
²⁴⁄₇ road assistance and support in English
Special prices for British expats living in Cyprus
We are a leading provider of vehicle insurance in Cyprus

To learn more about our vehicle insurance plans, including Third Party Liability, Third Party, Fire & Theft, and Fully Comprehensive, see here.

To receive a hassle-free quote, see here.

Pitsas Insurances Team