Choosing Commercial Auto Insurance

 

The rules regarding commercial auto insurance in North Carolina can be somewhat confusing to the layman but one thing is easy to understand - if your business owns a vehicle, you're required to carry commercial auto insurance.  Whether it's one vehicle or a hundred, personal auto insurance won't work if the vehicles are owned by the business.  Personal vehicles are different.  Using a personal vehicle for work purposes may be okay with personal auto insurance coverage under certain circumstances.

Personal Car or Commercial Vehicle?

For small business owners, the line between what's business and what's personal can be fuzzy.  If you drive your personal vehicle for business purposes at times and you carry personal auto insurance coverage, it's important that you understand how your insurer defines commercial use of your car or truck.  Your insurer should also be aware of the ways that you use your vehicle.

If you're driving a personal vehicle covered by a personal auto insurance policy and cause/incur any damages, your insurance company may deny a claim if they determine the vehicle was being used for business purposes.  An example of this is personal cars being used for rideshare operations such as Lyft or Uber.  If you use your vehicle for any business-related purposes, your insurer may consider it as a commercial vehicle.  It's best to check with them and let them know what your activities include.

Here are some examples of personal car use that an insurer may consider business use:

• Providing a service for which you're paid a fee
• Picking up or delivering goods of any type
• Visiting clients at their locations

Your vehicle may also be considered a commercial vehicle if: 

• The named owner on the title is a business
• The vehicle is rented to others
• The vehicle is driven on a consistent basis by you or others for both personal and business purposes

Commercial Auto Insurance Costs

A variety of factors may influence the cost of your commercial auto insurance.  These include:

• Specific coverage needs, including the minimum amount of liability coverage required by law for specific vehicle(s).
• Where your business is located plays a role in premium costs.  Larger cities will usually require higher premium costs than small towns.
• Type of business is a factor.
• Types of vehicles are important.
• Driving history of vehicle operators factor in to policy costs.
• The extent of your vehicles' travel radius affects premium costs.