Do you need commercial auto insurance?

​​If you drive your car for work, and not just to work, this article is for you.

If you occasionally use your vehicle during a workday, this article is also for you.

Many of my neighbors in Napa Valley occasionally drive their vehicle in some work-related way. It could be just to pick up something for the boss on the way home. Most have personal auto insurance. And that may be just fine.

But often, personal auto insurance isn’t enough. They could be exposed to a risk they didn’t know about. Let’s explore this a little more.
 
Does a personal auto insurance policy cover business use?
Yes. Sometimes.

It’s the “sometimes” that confuses people.

Insurance companies know that people occasionally use their personal vehicle for things related to work. So even though personal car insurance policies do not cover a “business vehicle,” many (not all) personal policies do allow some business use of a private passenger vehicle.

Confused yet?

Let me put it simply:

• If your vehicle is a business vehicle, you won’t be covered by a personal policy.
• If your vehicle is a personal vehicle that is used occasionally for a business purpose, you may be fine. (However, you’ll want to check your specific policy before relying on this.)

 
Who determines if your vehicle is a business or a personal vehicle?
In all gray areas, the insurance company determines whether your vehicle is a business vehicle or a personal vehicle- often after a claim is made.

And that’s where you can get into trouble.
 
Who might need a commercial auto policy?
If your vehicle is your business, or if you answer yes to any of these questions, you may need to consider a commercial policy:

• Do you move supplies from one location to another?
• Do you carry tools and equipment in your truck or van?
• Do you use your vehicle to get from one job site to another?
• Do your employees ever borrow your truck or van to pick up supplies?
• Is your van or truck equipped with specialized equipment like hydraulic lifts?

Do these "ifs" apply to you?

• If you are an electrician, a general contractor, or a plumber...you may need commercial insurance.
• If most of your work day is spent driving from one location to another (delivery, service, or sales) ...you may need commercial insurance.
• If you are incorporated...you may need commercial insurance.
• If your business has significant assets...you may need commercial insurance.

 
Commercial auto insurance has unique benefits.
The good news is that if you need commercial auto insurance, you’ll get increased coverage and features available only to this type of policy, such as:

• Higher liability limits
  Much more protection if you are sued.
• Combined Single Limit coverage
  No separate limits for property and bodily injury. Instead, one large single “bank” to draw from.
• Hired auto coverage
  If your business rents or leases a vehicle, you’re still covered.
• Non-owned auto coverage
  If you borrow your employee Sam’s truck, you’re still covered.

​These benefits may make it worth your while to consider a commercial policy.
 
My advice:
Call your local agent if you use your vehicle for more than just getting to work. Only your agent can help you determine which auto insurance policy is right for you.
​
Don’t wait until after a claim to find out if you had the right policy.
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Bruce Sackrison is an insurance property and casualty broker affiliated with Professional Insurance Associates helping clients with insurance needs for personal, commercial and business insurance. Bruce can be reached at 707-931-0186, bruces@sackifs.com