can I get US auto insurance with a Canadian license Adobe Stock nito

Do You Need Car Insurance for Business Use?

If you plan to use your car for business, you’ll need commercial car insurance.

Affiliate disclosure: Automoblog and its partners may be compensated when you purchase the products below.

Whether you drive for a delivery business or use a company car, there are many cases in which you may need car insurance for business use. Your personal auto insurance does not cover vehicles used for business purposes, so you’ll need to purchase commercial car insurance to make sure you’re covered while on the job. 

Our experts have researched and reviewed all major insurance providers with the goal of identifying the best car insurance companies in the industry. We’ll also cover everything you need to know about commercial coverage as well as the top insurers we recommend.

Does Personal Car Insurance Cover a Business Car?

The short answer is no. Your private car insurance will not cover damages or accidents that occur while using a car for business use – whether it’s your personal vehicle or a company car.

So, if you choose to carry business supplies or conduct deliveries in your private vehicle, your personal insurance company will reject your claim should there be an accident. Similarly, damage that occurs while performing business duties in a company vehicle without commercial coverage will also not be covered. You’ll need commercial car insurance in these cases.

What is Commercial Car Insurance?

Commercial car insurance is coverage designed specifically for vehicles used for business purposes. These policies protect the owners from major financial liabilities, including coverage for medical expenses and property damage, that wouldn’t be covered under a personal auto insurance policy. 

Types of Commercial Coverage

Although personal and commercial auto insurance policies offer coverage for different situations, the standard types of coverage are similar for both. Standard commercial coverages include:

  • Bodily injury liability insurance: Covers other parties’ medical bills in a collision you’re found at fault for.
  • Property damage liability insurance: Covers the cost of damage to other people’s vehicles and property as a result of a collision you’re found at fault for.
  • Collision insurance: Covers damage to your vehicle from a collision with another car or inanimate object, regardless of who’s at fault.
  • Comprehensive insurance: Covers damage to your vehicle from non-collision events, such as theft, vandalism or acts of nature.
  • Medical payments (MedPay)/personal injury protection (PIP): Covers the cost of medical expenses for you and passengers after an accident.
  • Underinsured/uninsured motorist coverage: Covers damage to your vehicle and injuries to you and your passengers if you’re hit by a driver who lacks sufficient coverage.

On top of standard coverages, many commercial vehicle insurance companies offer additional coverage options that are tailored to your business needs. These add-on coverages can help you create a business auto insurance policy that works for your specific type of business for greater protection.

How Much Commercial Car Insurance Coverage is Required?

Almost all U.S. states mandate insurance for commercial cars, except New Hampshire. Minimum requirements vary by state but usually include some combination of bodily injury and property damage liability coverage. Some states also require medical coverage or underinsured/uninsured motorist coverage.

Like insurance for private cars, businesses aren’t required to purchase comprehensive or collision insurance for their vehicles. However, having a full-coverage auto insurance policy that includes comprehensive and collision coverage in addition to the required liability coverage offers the financial protection businesses need for most situations.

Types of Vehicles Eligible for Commercial Insurance

Commercial auto insurance covers a wide range of small and large vehicles used in your business, including delivery trucks, company cars, standard work vans and more. It also offers coverage for personal vehicles used for business purposes, such as if you drive your car for Instacart, Uber Eats or another type of food delivery service.

Our Recommendations for Business Car Insurance

As you can imagine, finding the right coverage can be a daunting task. When searching for commercial auto coverage, it’s best to compare auto insurance quotes from multiple reputable providers. We recommend looking into top providers such as GEICO, USAA and Progressive.

GEICO: Best Discounts

GEICO’s insurance plans are worth considering for both personal and commercial vehicles. In our review of the best insurance companies, GEICO received a high overall rating of 9.1 out of 10.0 for its great customer service, many coverage options and affordable policies, making it one of the ideal choices for commercial auto insurance.

GEICO auto insurance coverage is available in all 50 U.S. states, and its personal policies and business coverage plans are both known for being affordable. Its wide range of discounts help bring prices down even further. You can get up to 25% off for insuring multiple cars, while military personnel and families get a 15% discount. The provider rewards good behavior, and users can save on premiums for safe driving, wearing seat belts, driving new vehicles and more.

USAA: Best Military Provider

Popular with military families, USAA is a trusted name in the auto insurance industry for both personal and commercial coverage. Although its car insurance policies are only available to military members and their families, it’s a great choice for those who qualify. It received an overall rating of 9.3 out of 10.0 from our team, ranking it second in our list of the best car insurance companies. 

The company has an exceptional customer satisfaction reputation. It receives high scores in several J.D. Power customer satisfaction studies and is known for resolving claims efficiently. Customers will also welcome the numerous discounts on offer at USAA, including those for military personnel and their families.

Progressive: Best for High-Risk Drivers

Commercial car insurance from Progressive is available in all 50 states and covers a wide range of commercial vehicles. Whether you’re looking to cover a standard vehicle used for business purposes or an industrial truck, Progressive offers the coverage you need at affordable rates. 

Progressive is often among the cheapest car insurance providers in the country. The company offers several opportunities to save money on your business policy as well, which helps to make coverage even more affordable.

Frequently Asked Questions

Does car insurance cost more for business use?

You will normally spend more on car insurance for business use than you would on a personal auto policy. This is due to the fact that business policies typically cover multiple individuals as well as the higher risk that comes with insuring commercial vehicles. As a result, businesses end up paying more on insurance premiums than individuals.

What is covered under a commercial auto policy?

A commercial auto policy typically includes a combination of bodily injury and property damage liability coverage, medical expenses coverage and sometimes underinsured/uninsured motorist coverage. You may opt to protect your business vehicles further with a full-coverage policy that includes collision and comprehensive coverage.

Does being self-employed affect car insurance?

Being self-employed doesn’t automatically mean your car insurance rates will go up. The premiums you pay will depend on a number of factors, such as what the car is used for, how often the vehicle is used and so on.
So, if you’re self-employed and running a business that requires the frequent use of your car, the annual premiums will go up. On the other hand, if you work from home and don’t use the car as much, the premiums may stay the same or even decrease.

What is the difference between business and commercial auto insurance?

When shopping for an auto insurance policy for your business, you may also encounter the term “business auto insurance.” This is the same as commercial auto insurance, and both terms are used to define insurance coverage for your business vehicles.