It can be hard to understand the line between personal auto insurance and commercial auto insurance if you’re using your vehicle for your own business or for work. Personal auto insurance policies have specific exclusions for using vehicles on the policy for business use and that means if you were to get into an accident while using your vehicle for business related usage, the claim you put in to your insurance company could be denied.
For that reason, it is important to fully understand if you should have a commercial auto insurance policy or if you can simply put business use on your personal auto policy. Hopefully by the time you finish this short article, you will know if you should contact your broker and get a quote for commercial auto insurance or if you need to change your usage on your personal auto policy.
What is Considered Commercial Usage?
As always, make sure to contact your broker and let them know exactly what you’re using the vehicle for, so that you can ensure you are properly insured.
If you’re using your personal vehicle for occasional company errands or occasional client visits, you would be able to simply add a percentage of business usage to your personal auto policy with most insurance companies. If your commercial use is only occasional and doesn’t involve deliveries, commercial auto insurance may not be required.
Examples of Commercial Usage
- Your vehicle is titled in your business name (ownership).
- You use your vehicle to transport products, goods or people in exchange for payment (deliveries).
- Towing a trailer as part of your work.
- Your vehicle is outfitted with equipment, such as ladders, snowplows, landscaping machinery, hydraulic lifts or permanent toolboxes.
- You allow employees to drive your vehicle for business purposes.
- You use your vehicle to transport supplies to a job site.
- You have company logos or signage on your vehicle.
Commercial Vehicle Rate Classes
Rate classes are not something everyday people consider when looking at their auto insurance. If you have a commercial auto policy, you will want to ensure that your vehicle is correctly classed for your usage.
Insurance companies have different rates or premiums that they apply to your vehicle based on the usage of the vehicle. That is fair after all, if you are using the vehicle to transport supplies to a job site, you don’t want to pay the same rate as the person who is using their vehicle as a delivery van all over town. This is where having an experienced broker handle your insurance policies pays off in the long run.
It’s Not Worth Trying to Game the System
You might have friends or acquaintances that will tell you that you don’t need a commercial auto insurance policy for what you do. These types of gambles are simply not worth the result if something were to happen.
You may be surprised at exactly how much a commercial auto insurance policy is depending on the usage of the vehicle, but it could be a lot cheaper than you expected it to be. It also isn’t worth ignoring the fact that you should be on a commercial policy if you were to have an accident. As mentioned at the start of this article, if you are using your personal vehicle for business usage, you could get caught having a claim denied. Business usage is excluded from coverage on personal auto insurance policies. So, if you were to have an accident, you might be replacing that vehicle out of your own pocket. That is a lot more money than a commercial auto insurance policy would have cost you.
Contact us today to find out if you should be on a commercial auto policy or to quote your current commercial policy. We will make sure you have the best coverage and premium combination that we can find for you.