Difference Between Private and Commercial Car Insurance

As the names suggest, a private car the insurance policy covers a car used for personal purposes, while a commercial vehicle insurance policy covers a vehicle used for commercial purposes, such as a taxi or cab.

The risk factors for private cars and commercial vehicles are very different, which is why there are two different policies available. A commercial vehicle is normally on the road for much longer than a personal vehicle and is often used to carry passengers, necessitating a broader coverage.

Private Vehicle Insurance: Experts recommend having adequate auto insurance because it covers both your own damage and third-party liability. It provides financial protection against accidents, fraud, natural disasters, arson, protests, third-party liabilities, and even personal injury compensation for the owner-driver.

The coverage for passengers and non-owner drivers are not included and must be purchased separately. The insurance policy would protect the vehicle if it is used for commercial purposes, even though it is against the policy's wording.

Commercial Vehicle Insurance: Since damage to your commercial vehicle can have a negative effect on your business, this form of policy provides financial protection against losses or damages to the vehicle in the event of an accident, third-party liabilities, theft, fire, and natural disasters, as well as personal accident coverage for the driver and passenger.

Daily wear and tear, as well as electrical or mechanical breakdown, are on the list of exclusions. Furthermore, if the commercial vehicle is used for personal purposes or is driven by someone other than the named driver on the policy, no coverage is given.

Commercial vehicle insurance rates are higher than private vehicle insurance premiums because the risk factor is higher. Commercial vehicles must have valid third-party liability, driver, and passenger coverage, while private vehicles must only have third-party liability coverage. By comparing the different deals, you can purchase Car Insurance Online in any form.

Can a Commercial Vehicle Be Used for Private Use?

Many cab and taxi drivers use their vehicles to socialize with friends and relatives. However, if you have a commercial vehicle insurance policy, it would not cover the personal use of the vehicle. As a result, if the damage happened while the vehicle was being used for personal reasons, you would not be able to file a claim under the commercial policy. Private auto insurance policyholders are in the same boat.

Conclusion:

Motor insurance is required if you own a car for personal or business use, and it should be able to cover all possible risks. As a result, it's important to understand the differences between Commercial Vehicle Insurance and private vehicle insurance.

Sponsor Ads

• Ad Space Available - Rent it Now!

Report this Page

Created on Apr 16th 2021 06:22. Viewed 222 times.

Share on APSense

Comments