For those who are not sure, we are going to take a look at the differences between personal, business and commercial auto insurance. It is easy to become lost when trying to wind your way through the auto insurance maze. But, if you don’t know where you are going, it’s far too easy to end up getting lost and not having the insurance coverages you need.

When it comes to the similarities between personal, business, and commercial auto insurance, we are talking about the basic coverages they offer. This includes both bodily injury and property damage. You should also have the option to buy physical damage coverage under the guise of comprehensive coverage and/or collision coverage.

Liability coverage is intended to cover you the event you or someone authorized by you is involved in an accident resulting in third-party injury or property damage.

Physical damage coverage is intended to cover your vehicle in the event of an accident and is not required unless you have a loan on your vehicle or it is leased.

For the most part, the differences do not typically involve the coverages. However, you may find that business and commercial policies may offer some coverages not available on personal auto policies.

The biggest difference has to do with the amount of “exposure” associated with business and commercial usage. Typically, these types of vehicle usage present a much higher risk than personal usage. This is because the average business vehicle see far more use on a daily basis, which of course increases the risk of accidents.

There are many different types of commercial risk ranging from the real estate agent driving from house to house to the truck driver who is on the road for umpteen hours a day driving at 65 to 75 mph. Keep in mind lawyers tend to smell blood when they know they are dealing with a company instead of an individual.

This is the type of insurance most of us have. It covers us when we are driving to work, to the store, or anywhere else. It covers “you” against financial losses should you be involved in an accident.

From driving the company car for sales calls to driving a large truck, you need business auto insurance. You may be able to add a “business use” endorsement to your personal use policy.

If on the other hand, you have ladder racks, tool boxes, etc. on a large pickup, you are more likely to need commercial insurance.

Keep in mind many insurers have specific requirements that must be met for a vehicle to be insured as “business” rather than “commercial” and that few if any can be fooled into paying a claim for a contractor who has decided to opt out of buying commercial insurance.

The obvious needs for commercial insurance are things like dump trucks and 18-wheelers, but if you own a fleet of service vehicles, you would need this type of insurance. It also offers “non-owned” and “hired” coverages that you may not be able to get on personal and business insurance policies.  Also, with commercial coverage, you have much higher liability coverage as commercial risks tend to be much higher and the damages and injuries worse.

Insurance is a complicated topic, but hopefully, this gave you at least a little insight into the different types of insurance offered. Be sure to talk your agent about your needs and let them guide you towards the best coverages to meet them.