Should You Insure Your Personal Vehicle Under Your Business Plan?

While it is true that you don’t always need to buy a separate vehicle for business usage, if you use your personal vehicle for business on the regular, you likely need to up your coverage.

Of course, there is a difference between commercial and personal auto insurance. Therefore, it’s important to understand when you need to make the jump from a personal policy to a commercial plan. Read on to learn more about the differences between the two types of coverage and how to know which is best for you:

The Difference Between Personal and Commercial Auto Insurance

A good rule of thumb to consider is that most personal auto insurance plans will cover your vehicle if you are driving to and from work. However, if you are using your vehicle to complete your work in any way, then you likely need to change or increase your coverage. This is because personal policies will typically not give you enough coverage if you are using your vehicle for business purposes. Most commercial policies also have higher liability limits than personal auto insurance plans, which gives you more coverage overall.

What Kind of Business Use Isn’t Included in Basic Personal Auto Insurance Policies?

There are lots of variations of business use that wouldn’t be included under most personal auto insurance policies. The following are an example of a few of the most commonly seen uses that would not be considered coverable under a personal policy:

• Renting your personal vehicle out to others for a profit.
• Using your personal vehicle as emergency transportation, like using it as a tow truck.
• Making deliveries as part of your business, like delivering goods, such as flowers, pizza, alcohol, or delivering rental equipment or merchandise or any material that is part of a service provided by a business. 
• Transporting passengers for hire, like the ride-sharing programs Uber or Lyft.

Why Personal Auto Insurance Isn’t Sufficient For Your Business

If you find yourself in a car accident while performing a task for your business, like delivering something or transporting someone, your personal auto policy could refuse to cover the accident. This means you are now responsible for damage not only to your car but to anyone else's involved in the accident. This doesn’t even take into account the cost of medical care or lost wages, or the damage done to business property, which could all become part of the process.

How Does Commercial Auto Insurance Cover Business Vehicles?

Commercial policies are designed to take into account the fact that you are spending more time behind the wheel of your vehicle, and therefore, there is an increased risk of an accident. It also takes into account that you are perhaps transporting goods or even another person when providing coverage. In general, commercial auto insurance covers business vehicles used for:

• Driving clients or employees.
• Transporting goods or equipment.
• Performing service that you are paid to complete.
• Charging passengers a fee to ride in your vehicle (think Lyft or Uber).
• Hauling heavy, work-related loads.
• Towing a trailer.

Bottom Line: You Want to Get This Right

Having the wrong coverage for your personal vehicle used for business purposes can cause a great deal of turmoil if you find yourself in need of coverage you simply don’t have. Thankfully, you can rectify the situation now and ensure that you are covered adequately for all situations. Contact Winter-Dent today to find the best auto policy for you and your business.