Auto Insurance policies are not all the same, and for good reason. You may be tempted to insure your company car under your personal Auto Insurance policy. Depending on your use, you may be able to do that, but you shouldn’t ignore Business Auto Insurance. Doing so can put you at significant risk of loss when you file a claim. Besides, insurance companies might not allow you to cover your company car under a regular auto policy.
Below are the different types of coverages available for business vehicles.
What Type of Vehicle Do You Have?
The type of insurance required for your company car primarily depends on the type of vehicle and its purpose. When shopping for Auto Insurance, an agent will ask several important questions required by the carrier. These questions help accurately assess the risk of use as well as determine how to best protect you from financial loss. Keep the following questions in mind, as they may be asked when building out your policy:
Is your vehicle…
- for personal and business use, or just business?
- more than 10K lbs/5 tons?
- used to deliver goods for your business?
- owned by anyone other than you (including a corporation)?
- loaded with additional equipment (racks, catering equipment, hydraulic lifts, etc.)?
- used for limo service, taxi, or ride-sharing (i.e. Lyft or Uber)?
Your Company Car Under a Personal Auto Policy
Let’s say you use your vehicle for both personal and business use. Some insurance companies will allow you to insure that vehicle under your personal Car Insurance policy. They’ll simply note your business use on your policy and in most cases apply a Business Use surcharge. Freelancers, consultants, party planners, and others who occasionally use their car to meet customers or perform job duties may experience higher rates. There are also insurance companies that will not cover your business use under a personal Car Insurance policy. Instead, they’ll require you to get Business Auto Insurance. However, that’s not a bad thing and it may not be as expensive as you think. You should look at Business Insurance as a more specialized coverage that benefits you.
Your Company Car Under a Business Auto Policy
If you use your company vehicle exclusively for business purposes, or if you can’t cover your vehicle under a personal auto policy, you will need a Business Auto Insurance (Commercial Auto Insurance) policy. This type of policy provides coverage that extends beyond what a standard policy will cover. There are things a personal Auto policy can’t cover that a Business Auto policy can. For example, Business Auto Insurance usually includes higher limits, covers the equipment in your vehicle and more.
Here are some examples of coverage options scenarios where a Business Auto policy comes in handy:
- Rental Reimbursement and Downtime Coverage. Your truck is involved in an accident but you can’t get a temporary truck to keep working. This causes you to miss out on $480 each day. This type of coverage pays you an established amount to offset that loss of income.
- Cargo Coverage. You’re transporting equipment or other cargo and you suffer a loss. This coverage reimburses you for the amount established on your policy. What a relief!
- Non-owned Vehicle Coverage. You’ve insured your company car and it’s being used at the moment. You send your assistant out on an errand. He gets in an accident with a car not owned by you. No worries! This coverage extends your insurance to cover that work-related accident.
- Hired Auto. You’re on a time crunch and have to finish delivering materials to the job site. You rent an additional vehicle to speed things up but get in an accident. Luckily, you’re covered thanks to Hired Auto. Think of it as you “hiring” another car.
What Insurance Coverage Will I Need?
A quick talk with a Business Insurance Specialist will inform you of the coverage that best fits your business. Sure, you may be able to cover everything without a Commercial Auto policy and stay on your personal one for a few dollars extra per month. However, you’d like the peace of mind that you and your business will be better financially protected if there’s ever an accident. It is possible to find a low rate on the Commercial Auto Insurance coverage you need for your company car or vehicles. An AIS Business Specialist can help with that. In fact, there are many types of businesses that benefit from having Commercial Auto Insurance:
Personal Auto Insurance with Business Use
Consultants- Photographers
- Ride Share Drivers
- Social Media Specialists
Business Auto Insurance
Real Estate- Delivery Service
- Event Production
- Fleet Rental
Commercial Truck Insurance
Waste Management (dump trucks, stakebed trucks)- Long Hauling (tractors, semi-trucks, box trucks.)
- Plumbers, electricians, etc. (utility trucks)
- Caterers (food trucks)
Remember that acquiring the right policy will leave you with peace of mind for you and your business. You may also be surprised at how affordable Business Auto Insurance can be. First, work with your Insurance Specialist to factor in how you use your company’s vehicles. Then, compare the quotes provided by the multiple insurance carriers. You may have a fleet of vehicles that keep your business moving, drive an ice-cream truck that requires commercial truck insurance, or meet customers to advise them on sales and marketing. The proper coverage will significantly reduce your potential for loss should you file a claim, so call AIS today.
This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms, and coverage in a given policy may be different from those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.
