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Differences Between Personal And Commercial Auto Insurance

In most regions of Canada, having auto insurance is mandatory. However, many drivers are still unclear about the differences between a personal and commercial auto insurance policy. The general rule of thumb is that any vehicle used for commercial purposes requires a commercial auto insurance policy. Aside from this general rule, there are other important details to consider when deciding on a personal or commercial auto insurance policy. If you are a driver that is trying to figure out which insurance coverage is right for you, read on to find out more on the differences between personal and commercial auto insurance

Personal and Commercial Auto Insurance: What’s The Difference?

Personal Auto Insurance

Personal auto insurance policies are generally intended for private passenger type vehicles (cars, small/medium SUVs, passenger vans, etc.) that are driven for pleasure, for commuting back and forth to work, or for business use (i.e. going to see clients, picking up samples, etc.). 

A personal auto insurance policy is designed to protect you, your family, and your vehicle. Usually, a personal auto insurance policy is comprehensive, meaning that you have coverage for medical fees and repair costs associated with an accident or for theft and vandalism. 

Occasionally, a private passenger type vehicle may require a commercial policy, depending on how the vehicle is being used (i.e. courier service).  

Commercial Auto Insurance

Commercial auto insurance is designed to cover commercial type vehicles (i.e. pickup trucks, cargo vans, stake trucks, etc.) that are driven to make deliveries or to go to various job sites while carrying tools or equipment. This type of insurance policy will provide coverage for any bodily injuries, property damage, and damage to the commercial vehicle.

Factors To Consider When Deciding To Get Commercial Auto Insurance

If you are trying to decide whether you need commercial auto insurance for your vehicle, consider the following two factors in order to determine your auto insurance needs.

Use Of Vehicle

This is the most important factor to consider when deciding on a commercial auto insurance policy. Usually, a commercial vehicle will serve specific purposes such as transporting people (i.e. a bus), merchandise, or tools. As a result, drivers are exposed to increased risk for themselves and their passengers and a commercial auto insurance policy is needed in this case. If you use your vehicle to transport merchandise or to make deliveries, you will probably need a commercial auto policy.

Type Of Vehicle

A commercial auto insurance policy is necessary if you drive a  commercial type vehicle, such as a heavy truck or a tool vehicle. These vehicles are generally more costly to repair and replace, so having a commercial auto insurance policy can save you money and give you peace of mind if you get into an accident.

If you have any further questions about personal and commercial auto insurance and would like to know how we can best meet your auto insurance needs, please contact us today and we will gladly help you out.