Commercial auto insurance is not cheaper than personal auto insurance. Commercial auto coverage typically is more expensive because you’re at risk for higher liability and property damage claims when transporting people or goods for money. Commercial auto insurance also offers higher liability limits than personal insurance and provides protection against legal action an injured party might take against your business after an accident.
Besides, commercial auto policies typically cover multiple vehicles, and those vehicles tend to be expensive to insure due to factors such as special equipment or age. Multiple drivers and higher weekly mileage can also increase the cost of commercial insurance.
However, even if you are the only driver and your personal car is the only vehicle that needs coverage, commercial insurance can be worth the cost. If you use your car for business and you’re involved in an accident, even on your personal time, your personal insurance company may not cover your claim. It’s better to pay more to be well covered than to have no coverage at all when you need it.
The options for using your car for business have expanded in the past decade. Rideshare drivers — such as Uber and Lyft drivers — have unique needs, and a growing number of insurers are offering distinct ridesharing insurance. Adding ridesharing coverage to your personal policy is often cheaper than purchasing commercial auto insurance. These policies can cost $10 to $350 per year, depending on your location and insurer. They are designed to bridge the gap between your personal auto policy and the coverage that Uber, Lyft and some of the smaller rideshare companies provide for drivers.
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