Difference Between Commercial Auto and Personal Auto Insurance Policies

Hey everyone! This is Jon Kuhlmann at Citizens Alliance Agency.

I'm here today to answer this question: What is the difference between commercial auto and personal auto and when are they needed?

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🚗 Commercial vs. Personal Auto Insurance: What's the Difference?

Understanding the distinction between these two types of auto insurance is crucial—especially if you use your vehicle for work. Here's a breakdown:

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🧾 Personal Auto Insurance

• Purpose: Covers everyday driving—commuting, errands, road trips, etc.

• Coverage Includes:

  • Liability for injuries or property damage

  • Collision and comprehensive (accidents, theft, weather)

  • Medical payments or personal injury protection

• Excludes: Business-related driving like deliveries or transporting clients

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🛠️ Commercial Auto Insurance

• Purpose: Designed for vehicles used in business operations.

• Coverage Includes:

  • All personal auto protections

  • Higher liability limits

  • Coverage for employees, leased/rented vehicles, and business equipment

  • Optional add-ons like Hired and Non-Owned Auto (HNOA) coverage

• Examples of Use:

  • Driving to job sites

  • Delivering goods

  • Transporting tools or passengers for pay

  • Operating branded or modified vehicles (e.g., food trucks, contractor vans)

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📌 When Do You Need Commercial Auto Insurance?

You likely need it if:

• The vehicle is owned or leased by a business

• You use it for work-related tasks beyond commuting

• You transport goods, equipment, or people for business

• The vehicle has permanent commercial modifications (like ladder racks or signage

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Using personal insurance for business driving can lead to denied claims and financial risk.

If you're unsure which policy fits your situation, I can help you think it through. Want to explore a specific scenario—Our agency can help you through this process.