Commercial auto insurance: when your personal policy isn't enough
You need commercial auto insurance when a vehicle is owned by your business or used mainly for business, and often when you haul goods or people for pay. A personal auto policy may cover limited business use, like driving to meet a client, but it commonly excludes delivery work, carrying passengers for a fee and rideshare driving. If employees drive their own cars for your business, hired and non-owned auto coverage protects the business.
Published by Marcus L. Barber, former licensed Maryland property and casualty producer (2010–2012)Reviewed by Marcus L. Barber on Updated This guide is general education, not advice for your situation. We're an independent publisher, not an insurer or agent, and we may earn a commission from partner links. How we make money.
Key points
- Personal policies may allow limited business use, but not vehicles owned by or primarily used for a business.
- Delivery and rideshare driving is commonly excluded from personal policies; ask about a rideshare or delivery endorsement.
- Hired and non-owned auto coverage protects your business when employees drive their own or rented cars for work.
- Interstate for-hire trucking has federal minimums: $750,000 for general freight in vehicles of 10,001 pounds or more.
What a personal policy covers
The Insurance Information Institute (III) says a personal auto policy may provide coverage for limited business use. Driving to a client meeting or the bank is often fine. But if your business owns the vehicle, or a personal vehicle is used primarily for business, you need business auto coverage.
Many personal policies also have a livery exclusion: no coverage while carrying people for a fee. Tennessee's insurance department notes typical exceptions for share-the-expense car pools and volunteer work.
When you need commercial auto
- The vehicle is titled to your business.
- The vehicle is used mainly for business.
- You deliver products, haul materials or tow trailers for work.
- Employees drive company vehicles.
- You carry passengers for pay.
- Your vehicles are heavy trucks, or you haul for hire.
Maine's insurance bureau gives home-business examples that may require a commercial policy: delivering products, transporting children for a business, snowplowing and light hauling. Wisconsin's regulator notes that the physical damage part of a business auto premium depends on how vehicles are used, how far they travel and their weight. For pricing more broadly, seewhat small business insurance costs.
Rideshare and delivery drivers
Gig drivers face a specific gap. North Carolina's insurance department says personal policies don't cover a vehicle while it's logged into a transportation network platform, whether or not a passenger is in the car, or while delivering goods for a delivery platform. Maryland's regulator says most policies don't cover driving others for pay.
The riskiest stretch is when the app is on but you haven't accepted a ride. The rideshare company's coverage may be limited then, and Wisconsin's regulator warns it may not cover damage to your own car. Many insurers sell a rideshare or delivery endorsement to cover these periods; ask yours before you start driving.
Hired and non-owned auto coverage
If an employee hits someone while running an errand for your business in their own car, the injured person may sue your business too. Hired and non-owned auto (HNOA) coverage protects the business in that situation, and when you rent vehicles for work. Wisconsin's regulator describes business auto liability that can cover owned autos only, or all autos including those not owned, hired or leased, and recommends the broadest option for most businesses.
HNOA generally protects the business, not the employee's car; the employee's own auto policy still pays first for their vehicle. Some insurers add HNOA to a business owner's policy.
Federal minimums for trucking
Interstate motor carriers must carry at least these liability limits, according to the Federal Motor Carrier Safety Administration (smaller vehicles and some private carriers have other tiers):
| Carrier type | Minimum liability |
|---|---|
| General freight, vehicles 10,001 lbs or more | $750,000 |
| Certain hazardous materials | $1,000,000 |
| Explosives, poison gas, radioactive materials | $5,000,000 |
| Passenger carriers, 15 or fewer passengers | $1,500,000 |
| Passenger carriers, 16 or more passengers | $5,000,000 |
How to buy
- List every vehicle, who drives it and what it's used for.
- Note whether employees drive their own cars for work, so you can add HNOA.
- Choose liability limits that match your contracts and what you could lose in a serious crash.
- Get quotes from several insurers or an independent agent, with the same limits and deductibles.
- If you drive for a rideshare or delivery app, ask your personal insurer about an endorsement first.
For personal auto basics, see car insurance coverage types.
Common questions
Do I need commercial auto insurance if I use my car for work?
Not always. A personal policy may cover limited business use, like driving to meetings. You likely need commercial auto if the vehicle is owned by your business, used primarily for business, used to deliver goods or carry people for pay, or driven by employees.
Does personal auto insurance cover DoorDash or Uber driving?
Usually not while you're working. North Carolina's insurance department, for example, says personal policies don't cover a car while logged into a rideshare or delivery app. Many insurers sell a rideshare or delivery endorsement that fills the gap.
What is hired and non-owned auto insurance?
Coverage that protects your business from liability when employees use their own cars, or cars you rent, for business. It usually doesn't cover damage to the employee's car, which stays with the employee's own policy.
Is commercial auto more expensive than personal auto?
Often, because business vehicles tend to be driven more, carry more weight and face more liability. The price depends on vehicle type and use, how far the vehicles travel, the drivers and the limits you choose.
How this guide was made
We drafted this guide with help from AI writing tools, working from the sources listed below. Every fact was checked against those sources, and Marcus L. Barber read and reviewed the full page, including its title, description and FAQs, before it was published. AI tools don't decide what we publish; a person does. Our editorial standards.
Sources
- Insuring your home-based business, Insurance Information Institute
- Driving for a transportation network or delivery network company, North Carolina Department of Insurance
- Insurance gaps for TNC drivers, Tennessee Department of Commerce and Insurance
- What drivers need to know about ridesharing, Maryland Insurance Administration
- Share with care: Ridesharing and insurance (PI-235), Wisconsin Office of the Commissioner of Insurance
- Consumer's guide to insurance for small business owners (PI-085), Wisconsin Office of the Commissioner of Insurance
- Insuring your home business, Maine Bureau of Insurance
- Insurance requirements, Federal Motor Carrier Safety Administration