Deciding whether you need personal auto insurance vs. business auto insurance can be confusing and can leave you in a situation where coverage may be denied if you don’t have the correct type of auto insurance for your situation. Imagine you are the owner of a small catering company and make deliveries in your personal van to individuals and businesses. If you get into an auto accident, while delivering food to a business party, would your personal auto insurance cover the damages or would coverage be excluded? There are many factors to consider when determining which type of insurance you need
Factors to Consider When Determining the Type of Auto Insurance Needed, but Not Limited to:
- How is Your Vehicle Used? Establish whether your vehicle is just for personal use or a combination of both business and personal. If your vehicle is used primarily or solely for business use, you will need a commercial auto insurance policy.
- Who Operates/Owns the Vehicle? Are you the sole operator and owner of the vehicle or is the vehicle registered in a company name and others use it?
- What is the Type of the Vehicle? If the vehicle you drive is a car, pick up, tow truck, SUV, or commercial trailer, you may need different types of insurance. The heavier the type of vehicle, the more damages will likely cost if involved in an accident and a commercial auto insurance policy may be required.
- What are the Mandated/Recommended Limits of Liability for the Business? If your vehicle requires higher limits of liability, it may mean you need a commercial auto policy.
The Main Differences Between Personal Auto Insurance and Business Auto Insurance
There are several differences between a personal auto insurance policy and a business auto insurance policy, but mainly the difference lies with the needs/risks of an individual for personal reasons versus a commercial business that involves risk and liability on a more expansive level.
Commercial insurance policies typically provide higher limits of liability and encompass more coverage options than a personal auto policy. A personal auto policy is written for the named insured versus a commercial policy, which is written to encompass many different unique driving situations.
Signs That You May Need a Commercial Auto Policy
Anytime there is question of whether you actually need a commercial auto insurance policy, the best thing to do is contact your N.C. independent insurance agent to assist you. However, there are some basic questions you can ask yourself prior to contacting your agent.
- Do you lease/rent your car(s) to anyone?
- Do you use your vehicle to transport others or deliver goods?
- Are any of your autos registered/owned/leased by a business?
- Do any of your vehicles weigh over 10,000 pounds?
- Do any of your vehicles have a built in ladder, toolbox, hydraulic lift, or anything of the kind, which would be equipped for business purposes?
- Does your vehicle require you to carry especially high limits?
If the answer was “yes” to any of the above questions, you may need a commercial auto insurance policy. It is always recommended that you speak with your local N.C. independent insurance agent to specifically tie down your automobile insurance needs that best fit your situation. Doing this before an accident happens prevents you from having your claim denied after an accident because you didn’t have the right type of insurance you needed. Don’t wait! Call us today.