What is the difference between commercial and personal car coverage?

The difference between commercial and personal car insurance is that commercial car insurance coverage protects you while driving for work or in a work-owned vehicle. If you get into an accident while working, your commercial car insurance policy will protect you, not your personal car coverage. Car insurance rates are another difference between business and personal car insurance, so start comparing quotes online now so you can find the best coverage for both. Enter your ZIP code below.

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UPDATED: May 4, 2022

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Written By: Laura BerryReviewed By: Joel OhmanUPDATED: May 4, 2022Fact Checked

Here's what you need to know...

  • Personal car insurance and commercial insurance plans are very different
  • If you cause an accident, liability insurance will cover any damage you may have caused
  • Most personal insurance plans offer some type of collision and comprehensive coverage

Since personal car insurance and commercial car insurance have different risks, the policies are written differently. Car insurance is important for both individuals and for businesses.

Since the insurance company is taking on the liability and risk when you purchase a policy from them, the amount of that risk and liability is dependent upon many factors.

Read on the learn all about the differences between commercial auto insurance and personal auto insurance and then enter your zip above to start comparing FREE car insurance quotes!

Personal Car Insurance Policies

Personal car insurance policies are specifically written for individuals and families. Personal car insurance is required by most states (except New Hampshire) in order to legally drive a vehicle. There are many factors that determine the terms and rates of a personal car insurance policy.

The factors that affect personal car insurance rates can be both negative and positive. Positive factors will decrease the monthly premium rates while negative factors will increase monthly premium rates.

Some of these factors the driver can control while other factors cannot be controlled. Once you are aware of the negative and positive factors, you can do your best to change them to work in your favor.

Examples of positive factors include a clean driving record, being over 25, being married, living in a low crime area, and having anti-theft devices on your vehicle.

Some examples of negative factors are a poor driving record, being under the 25, being male, being single, living in a high crime area, and having a previous policy that was canceled due to non-payment.

Personal car insurance policies include both collision and comprehensive options. A collision only policy will only cover a collision between your vehicle and another car or object.

A comprehensive plan will cover collisions as well as other means of damage to your vehicle such as theft, vandalism, and natural disasters.

A personal car insurance policy will not cover you  if you are driving a company vehicle for your job. This requires a commercial car insurance policy carried by the company you work for.

Commercial car insurance policies are much different than personal car insurance policies for many reasons.

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Commercial Car Insurance Policies

A commercial car insurance policy is needed for any company that has commercial trucks or business vehicles. A commercial car insurance policy is in the company’s name and can specify which employees are covered when driving the vehicle or give blanket coverage for all employees.

If an employee is in an accident in a company vehicle, but does not have insurance, the company will have to pay out of pocket. This also opens the door for both the company and driver to be sued if they were at fault.

The two main types of commercial car insurance are liability insurance and physical damage coverage. If you cause an accident and damage another vehicle, cause bodily harm to another person, liability insurance will cover the damages.

Physical damage coverage will cover collision and theft of a company vehicle when driven for company purposes.

In addition to these two types of insurance, there is also the option to add uninsured motorist coverage, medical payments, roadside assistance, and other types of coverage.

Just as with personal car insurance, commercial car insurance rates can increase or decrease due to negative and positive factors. For example, the more established a business is, the lower monthly premium rates will be.

The more claims that have been filed due to accidents or other damages, the more the monthly premium rates will be. Companies can lower their rates by hiring responsible drivers and training them appropriately.

Comparing Car Insurance Quotes

To find either a personal or commercial car insurance policy to fit your budget, you can compare rates and quotes using an online comparison tool. An online comparison tool allows you to see what several top rated companies have to offer.

Whether you are looking for a car insurance policy for yourself or your business, online comparison tools are a great way to save time and money. Enter your zip code below and start comparing affordable car insurance quotes today!

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

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