Personal Car Insurance vs. Business: Knowing when to Switch
If you use your car for personal use, you should have personal car insurance. If you use your car for business, you should have business car insurance. It should be that simple, right? For many, people it is not. The decisions between whether you need personal or business car insurance, or a combination of both, depends on how you use your vehicle(s).
Personal Car Insurance
Policies vary by company, so it is best to find out from your insurance company if your present policy covers any business usage. Some personal car insurance policies cover business use such as visiting clients, but don’t cover transporting goods like construction materials or delivering a final product. Make a list of exactly which ways you use your vehicle for business purposes and discuss them with your car insurance agent. You may be surprised to find out that your policy covers more than you think. On the other hand, you could also find out that your business usage puts you in situations where you are not covered if you have an accident.
Business Car Insurance
Certain business uses usually always requires business car insurance. For example, if anyone such an employee or personal assistant drives your car for business purposes than they are not likely to be covered by your personal policy. Another reason to consider business car insurance is if your potential liability exceeds your personal coverage. If you are transporting hundreds of dollars worth of items in your vehicle, will your personal car insurance policy pay to replace them if they are ruined in a car accident? Most personal policies cover the vehicle, but not the contents of the vehicle.
Combined Car Insurance
Because of the growing amount of people who use their car for both personal and business use, many insurance companies offer the choice of adding a commercial clause to your existing personal auto insurance policy. In many cases, adding additional business coverage to your existing policy is less expensive than having two types of insurance. Before you make a decision, you have to determine if the additional commercial clause will cover all the needs of your business.
Insurance companies will not penalize you if you are already using your car for business use, so there is no reason to be leery of approaching them. However, being unaware of what your current car insurance policy covers could be a very costly mistake. Before you put yourself and your business at risk, consult with a car insurance agent to determine what type of insurance you need to cover all applicable situations.
About the Contributor: Angela Quint has 10+ years experience in the insurance industry. She’s currently an active writer and blogger and works with individuals looking for careers in the medical community. Her recent contributions include articles for a new resource site at AboutMedicalBillingandCoding.org.Published in Automotive, Business, Finance
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