If you have a business where transporting people, equipment or products is a key aspect of your everyday responsibilities, you need commercial auto insurance. This is the case because personal auto insurance doesn't cover accidents or damages that occur while working.
This may seem like an odd nuanced part of auto insurance, but using vehicles for work presents different — and sometimes higher — risks than using vehicles only for personal purposes. Carrying people — as taxis or ride-sharing service do — adds additional liability and bodily injury risks to your insurance policy. Your personal car insurance policy likely won't be able to provide the extra amount of coverage required.
If you have a business that uses vehicles, the state may require you to have commercial auto insurance. In Arkansas, for example, passenger carriers, property carriers and hazardous substance carriers must carry a certain amount of liability insurance. Vehicles that transport hazardous material must carry between $1 million and $5 million in liability insurance while passenger carrier requirements depend on the number of passengers carried. For example, passenger carriers that carry 1 to 12 people must carry:
- $50,000 in bodily injury liability per person
- $80,000 in bodily injury liability per accident
- $30,000 in property damage liability
Be sure to check with your state about your industry's specific requirements. A general business in Arkansas is required to carry:
- $15,000 in bodily injury liability per person
- $30,000 in bodily injury liability per accident
- $10,000 in property damage liability
What Does Commercial Auto Insurance Cover?
Commercial auto insurance offers the same coverages as a personal auto insurance policy. This includes:
- Comprehensive Coverage: This coverage helps if the vehicle is damaged by fire, wind, hail, theft, vandalism or another covered incident.
- Collision Coverage: This coverage helps if the vehicle is damaged by a collision with a vehicle or object.
- Uninsured/Underinsured Motorist Coverage: If the driver crashes with someone who doesn't carry insurance, this coverage helps pay for the damages.
- Liability Insurance: This helps pay for property damage and bodily injury the driver may cause to someone else.
- Personal Injury Protection: This helps with medical expenses in the event the driver and their passengers are injured while operating the vehicle.
Does Commercial Auto Insurance Cover Personal Use
Although personal auto insurance doesn't cover work use, the opposite is not true. Commercial auto insurance generally does cover personal use. Speak with your Berryhill Insurance agent about who is covered beneath your policy.
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