Vehicles used for making money should have commercial coverage.
If your vehicle is used for any type of business, the insurance company wants you to cover it with a commercial auto insurance policy. Whether commercial license plates are required differs according to the laws of each state, but the requirements for commercial auto insurance is basically the same throughout the United States.
What Is Commercial Insurance?
Commercial insurance is used to protect a company against higher losses through liability claims. If a vehicle is used to transport goods or people, its insurer may deny claims filed when people are injured or property is damaged in an accident when the vehicle is used commercially while the insurance on the vehicle is not commercial insurance. Depending on what you are transporting, it may be wise to carry higher liability coverage, such as increasing your limits for bodily injury insurance if you use the car to transport clients or customers. Commercial insurance does not include collision or comprehensive coverages, but it usually covers higher liability limits and can buffer you against lawsuits directed at you and the business you represent.
Insurance Yes, Plates No
The requirement for commercial license plates is determined by each state and may differ widely. Some states specify that commercial plates are required on all business vehicles, while others limit commercial plates to dedicated work vehicles such as work vans or dump trucks. If a vehicle is used for any business purpose it should have commercial insurance, but having commercial plates will depend on your usage of the vehicle and the laws of the state where the vehicle is registered.
Laws Vary by State
Louisiana and South Dakota have very different laws that decide when a commercial license plate is required, including meeting the commercial insurance requirements for the vehicle. If the vehicle has commercial plates, it is not expected to be used for any other purpose, and the proper form of insurance is required. In most cases, you cannot get commercial license plates until you show your state's Department of Motor Vehicles proof that you have commercial vehicle insurance.
Any Business Is Commercial Use
Pizza delivery vehicles should be covered by commercial insurance because you are transporting property belonging to someone else, and insurance companies regard that as commercial usage. If you use your own vehicle to do computer repair on-site, then you are using your car for commercial purposes. For insurance companies, this represents a higher-risk category because the car is being driven more often and at different times of the day than a commuter's car is being driven. Both factors can increase the risk of an accident dramatically.
