What Defines a Commercial Vehicle?

When considering insurance either for yourself or for your business, you may hear the term commercial vehicle a lot. Though it may seem like it, not all commercial vehicles are eighteen wheelers or passenger carriers. In fact, nearly every vehicle can be considered a commercial vehicle.

Generally, a commercial vehicle is a vehicle used for commercial purposes. This includes company cars, trucks, buses, travel trailers, etc. Vehicles that are over 26,001 pounds are typically always considered commercial vehicles.

The most common types of commercial vehicles include:

Semi-trucks
Buses
Box trucks
Pickup trucks
Taxis

Trailers

Can I Buy Commercial Auto Insurance for a Personal Vehicle?
Personal auto insurance usually won’t cover you if an accident happens while the vehicle is being used for work purposes. That said, commuting to and from work is not considered a business purpose. If you only use your personal vehicle for commuting, your personal auto insurance policy will be enough.

You can purchase commercial auto insurance for a personal vehicle that is used for genuine work purposes, however. If you frequently transport goods, equipment or clients, you need commercial auto insurance. Be careful when insuring a personal vehicle, though. If an insurance agency discovers that a vehicle insured with commercial auto insurance is not used for work purposes, the insured may be dropped from the policy.

Do Employees Offer Commercial Auto Insurance?
Commercial auto insurance is typically the responsibility of the employer. Vehicles owned by the business should be insured with a commercial auto insurance policy, which will cover employees who use them. These employees are called permissive users.

It’s not as simple when it comes to employees using their personal vehicles. A typical commercial auto insurance policy owned by the business won’t cover the employees’ personal vehicles, which is where the importance of the employees’ own auto insurance policy comes in.

Businesses can add coverage for this gap, however. Hired and non-owned insurance covers any vehicle used but not owned by the business—including personal employee vehicles. This coverage also covers leased vehicles. For employers, this coverage is extremely important to avoid any gaps in liability insurance. Employees should speak openly with their employers and ask about the company’s auto insurance policy. The last thing anyone wants is to find themselves without protection in case of a wreck.

What Does Commercial Auto Insurance Cover?
Commercial auto insurance provides a lot of the same coverages as personal auto insurance. Aside from Hired and Non-owned insurance, it also covers:

Liability: Liability coverage helps avoid lawsuits by providing compensation for bodily injury and property damage the driver might cause in an at-fault wreck. If a lawsuit does occur, it can also help with legal fees.
Medical Payments: Medical payments coverage helps pay for medical bills for you and your passengers after a wreck.
Collision: Collision coverage helps pay for repairs on damages that occur as a result of collision with another vehicle or object.
Uninsured/Underinsured Motorist Coverage: Uninsured/underinsured motorist coverage provides compensation if the driver wrecks with another motorist who does not carry auto insurance.

The cost of commercial auto insurance varies depending on the type and weight of the vehicle, size of the business, the credit score of the insured and more. Small businesses pay an average between $750-$1,200 a year per vehicle for commercial auto insurance.

Commercial auto insurance is often required, as well. In Texas, commercial vehicles need to carry:

$300,000 in liability for goods carriers weighing 26,000 pounds or less
$500,000 in liability for property carriers weighing 26,000 pounds or more

There are different limits depending on the weight of the vehicle and type of cargo.

What Defines a Commercial Vehicle?

No Comments