What is the primary difference between a personal auto policy and a commercial auto policy?

The primary distinction between a personal auto policy and a commercial auto policy lies in the intended use of the vehicles covered. A personal auto policy is specifically designed to cover vehicles that are used for personal purposes, such as commuting to work, running errands, or traveling with family. This type of policy addresses the risks associated with typical personal vehicle use.

In contrast, a commercial auto policy caters to vehicles used for business purposes. This includes vehicles that are owned by a business or used to transport goods, employees, or equipment in the course of business operations. Because of these different uses, the coverage and terms associated with each type of policy are tailored to their respective contexts, reflecting the unique risks involved.

The other options highlight misunderstandings about coverage scope and costs associated with each policy type. A personal auto policy indeed provides liability coverage, contradicting one of the options, while another incorrectly suggests that a commercial policy covers personal use, which is not its primary intention. Additionally, while cost differences can exist between the two policy types, claiming a commercial policy is significantly cheaper fails to recognize the variances in risk and coverage tailored for business versus personal applications.