If the vehicle is titled to your business, you need commercial auto insurance. If it is titled to you personally but used for work beyond commuting, the answer depends on what “work” means — and getting it wrong is one of the most expensive uninsured-loss scenarios a small Texas business can create for itself.
Here is how to tell which side of the line your truck, van, or car falls on.
What does Texas legally require?
Every motor vehicle on a Texas public road must carry liability insurance meeting the state’s financial responsibility minimums. Under Transportation Code §601.072, those minimums are $30,000 for bodily injury per person, $60,000 per collision, and $25,000 for property damage — the familiar 30/60/25.
That baseline applies to business vehicles that are not registered as motor carriers. The moment your operation crosses into motor carrier territory, the numbers change dramatically. Under Texas Administrative Code 43 TAC §218.16, intrastate carriers operating vehicles over 26,000 pounds must carry $500,000 combined single limit; household goods carriers under 26,000 pounds carry $300,000 plus cargo coverage; oil and hazardous waste haulers $1,000,000; placardable hazmat and buses carrying 27 or more passengers $5,000,000. Interstate operations fall under FMCSA rules at 49 CFR §387.9, where the long-standing minimum is $750,000. We cover that world in detail in What Insurance Do You Need to Start a Trucking Company in Texas?
For most contractors, service businesses, and companies running a pickup or a couple of vans, 30/60/25 is the legal floor — and it is nowhere near an adequate limit. A single serious injury claim exhausts $30,000 before the ambulance ride is billed.
When does a personal auto policy stop covering you?
This is the question that actually matters, because most small business owners start out driving their own vehicle.
A personal auto policy generally covers driving to and from a single workplace, and it generally covers incidental business use by the named insured. What it does not reliably cover:
- A vehicle titled or registered to the business. If the LLC owns the truck, the personal policy has no insurable interest to respond to. This is the cleanest disqualifier there is.
- Employees driving. Personal policies are written around the named insured and household members, not a crew.
- Delivery and hauling for hire. Most personal forms exclude carrying persons or property for a fee.
- Rideshare and delivery apps without a specific endorsement.
- Vehicles with permanently attached equipment — a service body, a lift gate, a welding rig, a utility bed. Rating and coverage both change.
The failure mode is predictable. The claim happens, the adjuster asks what the driver was doing, and the answer is “delivering material to a job site.” The personal policy denies. The business has no commercial auto policy. The judgment lands on the owner personally.
How do I know if I need commercial auto?
Work through these. A yes to any one of them means you should be on a commercial auto policy:
- The vehicle is titled or registered to the business.
- Employees or subcontractors drive it.
- You haul tools, materials, or equipment as part of the work.
- You transport goods or people for a fee.
- The vehicle has permanently mounted business equipment.
- Its gross vehicle weight rating exceeds 10,000 pounds.
- A customer or general contractor requires a certificate of insurance naming them as additional insured — personal auto policies do not issue those.
That last item catches a lot of contractors. If you are bidding commercial work, the certificate requirement will decide the question for you before an underwriter does.
What does a commercial auto policy cover that a personal one does not?
Higher and more flexible limits. Commercial auto is commonly written on a combined single limit — $500,000 or $1,000,000 — rather than split limits, and it can be layered under a commercial umbrella. In a state where large auto verdicts have been climbing, that layering is the point.
Coverage for the business entity, not just the driver. A commercial auto policy names your LLC or corporation as an insured, which is what protects business assets when the plaintiff sues the employer for the employee’s driving.
Hired and non-owned auto liability. This is the coverage most small businesses are missing. It responds when an employee drives their own car on a company errand, or when you rent a truck for a week. If nobody at your company owns a vehicle but people run errands in their own cars, you still have an auto exposure — and hired and non-owned is often available as an inexpensive endorsement on the general liability policy.
Broader definitions of who is driving. Commercial forms use covered auto symbols to define scope, and choosing the right symbols is where a lot of quiet coverage gaps live. “Any auto” behaves very differently from “specifically described autos.”
Coverage for the equipment on the vehicle, and, when scheduled properly, the tools inside it.
What drives the price?
Radius of operation, vehicle weight and type, what you haul, driver motor vehicle records, years in business, limits selected, and loss history. Commercial auto has also been one of the hardest lines in the country to buy — the Council of Insurance Agents and Brokers reported commercial auto rates rising for 59 consecutive quarters as of the first quarter of 2026, even while overall property and casualty pricing softened.
The two levers you control are driver selection and documentation. Pulling motor vehicle records before you hand someone keys, and keeping a written driver qualification and personal-use policy, are the cheapest premium reductions available to a small business.
What about a truck I use for both?
Personal use of a business-owned vehicle is normal and is handled through the policy, not around it. Tell your agent honestly how the vehicle is used, including who takes it home and whether a spouse ever drives it. Commercial forms can extend coverage to individuals for personal use, but only if the policy is built to.
The reverse — running business use through a personal policy and hoping the question never comes up — is where the uninsured claims come from.
The five-minute check
Look at the title of every vehicle your business touches, then list who drives each one and what they carry. Any vehicle titled to the business, or driven by anyone other than you, belongs on a commercial policy. Any personal vehicle used for company errands means you should be asking about hired and non-owned liability.
We write commercial auto for contractors, service companies, and fleets across Central Texas, and we will tell you straight if your current setup is fine. Call 830-303-8300 or start with our commercial insurance page. If your operation is heavier than a work truck, the numbers are different — see How Much Does Commercial Truck Insurance Cost in Texas?
