What to Know About Personal vs. Commercial Car Insurance in NJ
Whether you run a bustling commercial enterprise, or are just an individual, it’s almost certain that your car or other auto-vehicle plays a very important role in your ability to properly navigate and conduct yourself through everyday life.
Businesses may need vehicles for all sorts of purposes, ranging from transporting goods or equipment to or from a warehouse or depot, to driving around clients or employees, delivering goods or services to a client, hauling heavy work-related load, and more.
Private individuals, of course, may rely on their vehicles for things ranging from commuting to work, to reaching grocery stores and other essential services, to going out to socialize, and more.
In less urbanized and built-up areas, in particular – such as Manahawkin, New Jersey – a car may well be nothing short of essential in order to get around, and to conduct your life or business as you desire and require on a daily basis.
Of course, every car has to be insured, and there are differences between the types of insurance provided for commercial purposes, and the types of insurance provided for personal, individual use.
Here are some things to know about both personal vs. commercial car insurance in NJ, what they cover, and the differences are between the two.
Small Businesses May Be in a Grey Area
For a small business, the line between what can be considered a “personal” and a “commercial” vehicle is likely to be blurry. Presumably, you will sometimes drive your work vehicle for personal use, or double up a personal vehicle for use in your business.
Just be aware that personal auto policies almost always exclude business use, meaning that you likely won’t be covered if you get in an accident while driving for work – excluding, of course, your commute.
You’ll want to take special care to investigate the specifics of your policy if you want cover for a multipurpose vehicle.
The “Named Insured”
If you’ve ever set up personal insurance for your vehicle, you will be familiar with the idea that the “named insured” for your policy will be a particular person.
Presumably, this person will be you – but it can also include your partner, or a member of your family.
For commercial insurance, however, there is still a “named insured,” but that named insured will be an entity instead of a person.
Just what the named entity is may vary depending on the structure of your business, but generally speaking it will probably be your business itself.
The benefit of the insurance policy will then be assigned to your business broadly, along with the liability.
Liability Coverage can Differ Significantly
For personal insurance, the aim of the insurance policy is, primarily, protecting you from dangers that can occur through events such as a car accident.
Commercial policies are designed to mitigate the risks that come with running a business – and as such, the liabilities insured against will be both more specific and varied.
You will need to look into the specific liabilities that are or are not covered – such as theft by an employee – and judge carefully whether the policy will realistically safeguard you against the risks you are likely to face in your professional context.
Personal vehicles Occasionally Used for Work Errands
If you or an employee of yours uses a personal vehicle for some work errands, it will likely be a good idea to look into purchasing hired and non-owner auto insurance.
This is a policy type that provides liability coverage if you get into an accident while driving your own vehicle for work purposes. It will also offer protection when your business rents or leases a vehicle.
This type of policy will not pay out for vehicle damage. Rather, its entire focus is in covering legal bills that result from an accident.
Protection Against Property, Liability & Medical Costs
Personal car insurance can involve various features, but is generally structured around a focus on protection against property, liability, and medical costs.
Property coverage pays for vehicle theft, or damage to your vehicle, whereas liability coverage pays for the legal responsibility you have for others and their property, in the case of an accident that was your fault.
This will involve things like paying for the cost of treating injuries, compensating for lost wages, and having the other parties cars repaired or replaced.
Comprehensive cover will protect your vehicle, along with potentially covering other vehicles you drive, against losses and damage resulting from incidents other than collision.
This may, for example, include damage that occurs as a result of flood, fire, or animal interference.
Collision cover exclusively handles cases where your vehicle hits, or gets hit by, another vehicle or object. This cover will pay for repairs, minus your deductible.
Depending on the age of your vehicle, you may not need this form of coverage, as it is often limited to the cash value of your car.
Additional forms of coverage include bodily injury protection, property damage liability, medical payments or personal injury protection, in addition to insured and uninsured motorist coverage
Higher Liability Limits
As the costs involved with commercial vehicles will tend to be significantly higher than with personal vehicles, a commercial vehicle policy will typically have a higher liability limit than a personal auto insurance policy.
This becomes especially important when dealing with things like large vehicles used to transport valuable goods or equipment.
Of course, the specifics of different commercial vehicle insurance policies will vary by type, and according to provider, and so it’s important to do your due diligence and research appropriately before making a commitment.
It’s entirely possible that one commercial auto insurance policy would be ideal for your particular needs, but that another would miss out on many of the key features that you are concerned with, and offer others which don’t necessarily apply to you.
Now you know all you need regarding personal vs. commercial car insurance NJ. Reach out to us with any questions.