Although perhaps not required by law, it is prudent for the owner or driver of a commercial vehicle to carry commercial auto insurance. It can rescue a person from unforeseen financial disaster because they thought they were protected when they were actually unprotected.
Commercial coverage is needed whenever a person is using their automobile for a commercial purpose. The law defines a commercial purpose as the transport of persons or property for any fare, fee, rate, charge or other consideration, directly or indirectly in connection with any business or other undertaking intended for profit. Consideration is a fancy legal word for payment. The kid delivering pizza, the courier and the guy plowing snow from your driveway are all using their vehicles for a commercial purpose. Even if your daughter is driving home from college for the weekend and bringing some friends with her that are chipping in for gas, you daughter can be deemed to have been driving that vehicle for a commercial purpose.
Commercial coverage is substantially similar to personal coverage, but when a vehicle is on the road more and being used more often than a personal vehicle, there’s more risk for the owner, driver and insurer. The more risk, the more claims. That’s why there is commercial auto insurance. It can cover liability and property damage, uninsured motorist, medical payments, and collision coverage. Additional coverages unavailable for personal policies are available with commercial policies.
Commercial coverage operates to protect both business and personal assets. If a claim arises when a person has been driving their personal vehicle for a commercial purpose, the insurer can decline coverage, leaving both business and personal assets exposed to be levied upon after a judgment is entered against you. For that reason it is wise to seek commercial auto coverage if your vehicle is used for business.
Next time your daughter is driving back from college, do yourself a favor and send her $25.00 for gas money. You’ll enjoy doing your yard work a lot more.