Should I purchase a Business/Commercial Auto Insurance Policy... or a Personal Auto Insurance Policy?

In Colorado, coverage on a commercial auto insurance policy is similar to a personal lines auto policy. Most clients understand the need to purchase a personal auto insurance policy, but they are not sure if they need to purchase commercial auto policy.

There are 2 factors to consider In determining which policy to buy

     1.  the ownership of the vehicle and

    2.  the use of the vehicle.

In general, if the vehicle is titled in the name of the company, you will need to purchase a commercial auto policy as personal lines carriers will not issue a personal auto policy for a ‘company owned’ vehicle.

If the vehicle is primarily used for ‘business’ purposes but titled and owned by an individual, we highly suggest purchasing a commercial auto policy as you might have trouble collecting on a claim.  Personal lines carriers want ‘personal’ use on the vehicles they insure.  And if you read their insurance contract, most will ‘exclude’ coverage for business and/or commercial use.

Sometimes a carrier will allow commercial use on a personal lines auto insurance policy

Some personal lines carriers will allow you to endorse (add) a ‘business use’ endorsement onto a personal lines policy, but only for limited ‘business’ uses such as a realtor or salesperson.  Call your Denver Area insurance broker or agent to find out which policy type you should have.

Benefit of purchasing a commercial auto insurance policy

Commercial auto insurance policies also offer higher limits of liability insurance.  In Colorado, almost all commercial auto insurance carriers offer $1 million in liability coverage, whereas the most liability coverage you can get on a personal lines auto policy is $500,000.  And the cost difference to carry much higher liability is minimal.

For assistance in determining which type of auto policy you should purchase, Contact Us. One of our Colorado licensed insurance agents can discuss your needs and determine the best policy type for you or your commercial business!