Did You Know There are Different Types of Auto Insurance? You May Not Have the Right Type

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Few people like thinking about insurance. There's no shame in that. After all, insurance is what you use whenever the worst case situation happens to you. A car accident, a natural disaster, a medical emergency are all situations that one calls the insurance company for. People rarely call an insurance company when things are going right!

Thus, it's only natural for a few people to be well-educated about the different types of auto insurance out there to choose from. However, if you don't know about the different types, or are enrolled in the wrong one that unsuitable for your use case, then you'll be kicking yourself should that worst-case scenario ever happen (knock on wood!).

In order to help educate people about the different types of auto insurance they should consider, we've written this article. In it, we'll talk about the two principal different types of auto insurance and cover the delineations between personal and commercial insurance.


Personal Insurance

If you're like the average American, personal insurance is what you have right now. You may have it through one of the massive insurance companies, or a smaller boutique firm. But either way, you probably have a reasonable amount of coverage, pay a fixed amount per month, and don't own a lot of vehicles. Thus, personal insurance may well be right for you.

The big thing about personal insurance is that it only covers incidents that occur when the vehicle in question is being used for personal reasons. Whether that's commuting to work, going on a road trip across America, or stopping by the grocery store to pick up a carton of milk, your insurance company should have you covered.


Commercial Insurance

The big difference between commercial auto insurance and personal auto insurance is the type of liability that commercial insurance covers. Commercial insurance covers all incidents that occur when the vehicle in question is being used for commercial purposes.

Commercial purposes entail everything that's a part of money-making, revenue-generating activity for an official entity. For the purpose of understanding commercial auto insurance, let's say that you work for a warehouse. You need to make a delivery to a contractor who has a site set up across town. 

You hop in your vehicle to make the trek and meet with an accident along the way. Commercial insurance is what will save your butt.


Which of the Different Types of Auto Insurance is Right for You?

Given that there's a pretty clear difference between the different types of auto insurance, the answer to this question is fairly straightforward. Do you use your vehicle for work? If yes, then you need commercial auto insurance. If you own a company that owns vehicles, then you also need commercial auto insurance. But if, on the other hand, you only use your vehicle for personal use, then you would be wise to stay on your personal plan and avoid footing the bigger bill for commercial auto insurance.

With this knowledge under your belt, you're now better equipped to decide on the right auto insurance policy for you! For more financial advice, be sure to check out the rest of the insurance articles on the website!

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