How does the "personal auto policy" (PAP) differ from commercial vehicle insurance?

The distinction between a personal auto policy (PAP) and commercial vehicle insurance lies primarily in the intended use of the vehicles they cover. The personal auto policy is designed specifically for vehicles that are used for personal purposes, such as commuting, leisure, or family activities. These vehicles are typically owned by individuals and used in a non-commercial context.

In contrast, commercial vehicle insurance is tailored for vehicles used in business operations. This includes vehicles used for transporting goods, carrying passengers for hire, or any other business-related purpose. Because these vehicles are subjected to different risks and usage patterns, commercial policies generally offer broader coverage options that reflect the needs of businesses, including liability coverage for hired and non-owned vehicles, which is not typically a feature of personal coverage.

Understanding this key difference helps clarify why the personal auto policy is suitable for personal use, while commercial vehicle insurance accounts for vehicles that are integral to business activities. The other options either misrepresent the characteristics of the PAP or do not accurately capture the distinctions in purpose between personal and commercial auto policies.