Different Between Commercial Truck Insurance and Personal Auto Insurance

Different Between Commercial Truck Insurance and Personal Auto Insurance

Written by Sophie Robertson, In finance, Published On
January 17, 2023
, 153 Views
Last modified on January 24th, 2023

Insurance is an effective tool to withstand unforeseen financial trouble that occurs after accidental damages. Whether you drive a personal or commercial vehicle, getting it insured is an essential part of your life. Commercial vehicles comparatively hit the road more than personal ones so it requires specialized coverage. Because your exposure to risks is comparatively greater than a vehicle used for personal motives. You need adequate truck insurance to fully protect your vehicles from a number of possibilities on the road. It safeguards your investment, drivers, and other people on the road.

When you go on an auto insurance hunt, you should be aware of the difference between commercial and personal vehicle insurance. This is because many people get confused between these two coverages. So, read out this post as it will help you to neither take unnecessary coverage nor buy an inadequate policy for your hard-earned asset. Without further ado, let’s understand the key difference between the two, so you can make an informed decision and give your vehicle the finest protection.

How is private auto insurance different from commercial truck insurance?

Personal Auto Insurance

The key difference between commercial and private auto insurance is the level of liabilities each policy covers. However, there are some other major differentiating factors, let’s take a quick look at the table below to know the major dissimilarities between the two.

Specification Personal auto insurance Commercial truck insurance
Cost of premium Lower

Because personal vehicles are not exposed to high risk.

Higher

Because commercial trucks are exposed to numerous risks on the road.

Coverage Offers third-party liabilities coverage and excludes passengers.

This policy does not cover damages that occurred when the vehicle is used for non-personal motives.

Offers coverage to third parties, drivers, as well passengers.

This policy does not cover vehicle damages occurring when used for personal use unless the insured takes non-trucking liability insurance.

Types Third-party and comprehensive. Collison, comprehensive, third-party, owner-operator insurance, private carrier insurance, and many more.
Nature of operation Personal. Money making. Hauling of various types of cargo is involved. So, operators often take cargo insurance for the safety of the shipment.
Limit Lower coverage limit. Higher coverage limit.

To comprehend each differentiating factor of private and commercial auto insurance. Let us understand all the inclusions and exclusions of these two policies.

Private auto insurance

A vehicle policy that offers protection to private vehicles is called private auto insurance. This insurance is further divided into two types:

  • Third-party vehicle insurance.
  • Comprehensive vehicle insurance.

In third-party vehicle insurance, the insured gets covered for property damages and bodily injuries done to other people in an accident. This coverage is also mandatory by the state. Therefore, if you want to avoid getting deftly fined, you need to buy this cover for your personal auto.

On the other hand, comprehensive vehicle insurance protects the insured against their own damages and physical injuries in an accident. You can say it is an extended version of third-party vehicle insurance because it also covers other people against losses. This type of policy proves to be beneficial as it gives robust protection to your personal vehicle.

Inclusions of private auto insurance

  • It protects you against the damages and losses arising out of an accident.
  • It covers personal accidents.
  • It reimburses for the losses occurring due to fire, theft, natural calamities, and vandalism.
  • It also covers third-party damages and physical injuries.

Exclusions of private auto insurance

  • Do not cover vehicles that are used for commercial motives.
  • If you don’t opt for extra coverage then personal drivers are not included in the policy.
  • Doesn’t cover passengers’ physical injuries that rise in accidents.

Commercial truck insurance

A policy that protects commercial vehicles against various risks is called commercial truck insurance. This type of insurance is very broad because there are several types of trucks and vehicles used to perform trucking operations. From box trucks, tow trucks, and pickup trucks to semi-trucks and dump trucks, all need this coverage for complete protection on and off the road. As commercial vehicles are mostly on the road, they are more exposed to risk. These risks are related to drivers, passengers, hauling cargo, and other people on the road. So, they need a wide range of coverage for full protection. For instance, truckers need cargo insurance to safeguard their freight from numerous possibilities on the road that can damage it.

Inclusions of commercial truck insurance

  • It offers protection to the insured from damages and losses suffered in an accident.
  • It provides coverage for drivers who are likely to get injured in an accident.
  • This insurance covers commercial trucks against losses arising out of natural disasters, theft, fire, explosion, or vandalism.
  • You get an option to protect the passengers.
  • This policy also covers third-party liabilities.

Exclusions of commercial truck insurance

  • Don’t cover vehicles or trucks used for personal purposes (unless you take non-trucking liability coverage).
  • Damages happening due to electrical or mechanical breakdowns are not included in this policy.
  • Does not cover regular wear and tear of trucks.
  • Losses or damages occurring in the event of a nuclear attack, war, and radiation are excluded from this coverage.
  • Damages that occur due to the over-usage of vehicles are not covered.
  • Doesn’t cover damages that occur while an uninsured person drives the insured vehicle.

Parting thoughts

Insurance is a tool that offers financial comfort against various expenses that occur after an accident. No matter if you own a commercial truck or private car, it is a vital mode of transportation and hauling cargo from one point to another. However, trucks and vehicles used for commercial purposes are more prone to damage than private ones. So, protecting your wheels and the people behind the steering is important for smooth trucking operations.

You must have understood the difference, inclusions, and exclusions in both types of insurance policies. It would be now easier for you to choose what type of coverage you need for your vehicle. Remember, wherever you go insurance shopping, always compare the quotes and see what level of coverage each insurer is offering at that specific rate. Pick the best one that meets your needs and budget!

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