Importance of Business Auto v. Personal Auto – March 2019

How you drive your vehicle depends on the type of policy it should be written on.  Most people don’t realize or understand the importance of Business Auto.

Why business auto insurance v. personal auto insurance?

There are several differences between business auto and personal auto insurance.  A business auto will have higher liability exposure to a risk than a personal auto.  A business auto will carry a much higher liability limit in coverage than a personal auto.  Business auto provides other coverage’s that personal auto does not, such as:

  • Property and liability trailer exposure
  • Equipment used with or attached to the vehicle
  • Additional insured requirements
  • Higher limits (up to $2 million)
  • Loading and unloading exposure
  • Hired-vehicle coverage
  • Non-owned vehicle coverage

Did you know?

If you own a vehicle that is insured under a personal auto insurance policy and use if for business, you need a commercial business auto policy.

Did you know? 

An insurance company may not pay claims for any damages you incur, if the insurance company deems it was used in the course of business as a commercial vehicle.

Why is it important to discuss with your agent how you use your vehicle?

In order to select the right policy coverage for your vehicle business auto or personal auto, it is important that you disclose how you plan on using your vehicle. This will help to prevent any claims issues.

How do I know if my car should be on a personal or commercial insurance policy? 

If you use your car for any business-related purpose, you need a commercial auto insurance policy.

Did you know how to classify a commercial vehicle?

Your auto is classified as a commercial vehicle if you use it to:

  • Pick up or deliver any goods,
  • Provide a service for a fee,
  • Travel to remote work location or between work locations,
  • Visit client locations.
  • Haul goods for a service

Additional conditions which your car may be classified as a commercial vehicle:

  • The owner’s name is listed on the vehicle title as a business – incorporated, unincorporated or LLC,
  • The vehicle is rented or leased by others
  • The vehicle is equipped with a snow plow, has an altered suspension system or other equipment or modification
  • The vehicle is used for a landscaping business
  • Is driven by you or your employees for both business and personal use on a regular basis.

If you use your personal vehicle occasionally for business use, it may be covered under your personal auto insurance. I would discuss with your agent how you plan on using your vehicle, whether it’s for personal or business usage.  Your agent will advise you as to the appropriate policy is for your situation.