If you don’t drive a company vehicle, chances are, you’ve never considered the need for commercial auto insurance. After all, everyone drives their car to and from work without changing their policy. Still, if you use your personal vehicle for business tasks during the workday, your auto insurance may not be adequate. There are many professions that require you to use your personal vehicle for business use, but where do you draw the line?
Unfortunately, navigating the complexities of your insurance coverage isn’t that simple. The amount you use your personal vehicle for business is important, but the deciding factor may have more to do with what you’re using the car for. Whether you use your personal vehicle for your own business or under an employer, you might need a commercial insurance policy.
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Personal Auto Insurance Coverage
If you live in Massachusetts and drive a vehicle, you’re required to have auto insurance coverage. Your personal insurance policy will take care of you, your passengers, and your property in the event of an accident. However, if the accident occurs while you’re on the way to meet a client during a busy workday, you might find your claim getting denied.
Personal insurance is designed to cover the average amount of travel a person incurs daily. In many professions, employees drive to work and park the car for eight hours. If your job requires you to drive to multiple worksites each day or carry products or passengers related to your job, your personal policy won’t provide adequate coverage.
When Your Personal Policy Is Enough
At this point, you might be thinking that basically everyone who works needs commercial insurance, but that’s not the case. Here are a few instances you can likely use your vehicle during your workday under your personal policy.
- You grab coffee for co-workers on the way to work.
- You occasionally drive your personal vehicle to a business meeting.
- Your commute is to a single job site daily.
- You occasionally run an errand or make a single delivery for your boss.
Why Your Personal Auto Insurance Policy is Insufficient for Business Use
Your personal insurance policy covers your regular commuting needs. While there’s no limit to how much you can drive under your personal policy, commuters generally drive less than commercial drivers. Using your car frequently for business purposes puts more miles on the vehicle, leading to more wear and tear and regular maintenance. Additionally, drivers using a personal vehicle for business often travel with job-related equipment. A commercial policy can be extended to cover property damage or theft. Regularly transporting passengers for business also requires you to have more liability coverage to take care of those passengers.
Commercial Auto Insurance Coverage
A company with vehicles used specifically for business purposes invests in commercial auto insurance coverage for those vehicles. However, there are many reasons employees may use their personal vehicles for work. In these instances, the company might provide commercial insurance for employees. Still, this isn’t always the case. If you’re required by your employer to use your personal vehicle for business reasons, you need to inquire about the insurance coverage you are provided.
When You Need Commercial Coverage
Often, workers who are self-employed use their personal vehicle for business use. The amount you use your car and the intended purpose for the majority of your driving will help you determine whether you need a commercial policy. Whether you’re working for a company or you’re the boss, here are some examples of work-related excursions that require commercial auto insurance.
- Your job requires you to drive daily to meet multiple clients at different locations.
- You haul commercial goods related to the business (like pizza or newspaper delivery).
- You transport passengers for work reasons (like an Uber driver, or a driver for out-of-town clients).
- Your vehicle is outfitted with permanent work equipment (like toolboxes, ladders, cooking and catering equipment, or hydraulic lifts).
- You allow your employees to drive your personal vehicle for work purposes.
- Your vehicle is a pickup, work van, or utility vehicle that weighs over 10,000 pounds.
- You travel with expensive equipment/tools for your business.
- Additionally, some businesses are required to have commercial auto liability coverage to perform certain duties on job sites or at a customer’s private residence.
Additional Protection for Employees
It can be difficult to decide how to extend your auto insurance to take care of any employees that might need to drive a vehicle not owned by the company. Hired and Non-owned Liability Coverage is designed to provide liability and damage coverage when an employee drives any personal vehicle for business use. This additional coverage is especially useful to small businesses that don’t own company vehicles. While this is a commercial policy, it can be purchased as a stand-alone policy for these circumstances.
At LoPriore Insurance Agency, we understand that not all businesses have the same needs. There are a variety of ways you can achieve the right level of auto insurance for your business. An experienced insurance agent can help you determine how much coverage you need without forcing you to pay for coverage you’ll never use.
Deciding Which Policy Suits Your Current Needs
It can be tough to understand which category your daily activity falls into. That’s why having an insurance agent you can trust is important. An experienced insurance agent can help you determine the best ways to maintain adequate coverage without paying for more than you need. While some vehicles obviously fall under the category of commercial, others seem to fall into a grey area between commercial and personal insurance. You’re not delivering pizza all day or transporting a busload of customers, but you’re not parked at work all day either. When this occurs, your insurance agent may be able to adapt your personal auto insurance policy with additional liability coverage to cover occasional business purposes.
Gathering information can help you be prepared to discuss your insurance needs with your agent. If you’re unsure whether you need commercial insurance, keeping a driving log can help. When you drive during a workday, keep a log that describes your location, cargo, and passengers in the vehicle. If you make multiple stops during a trip, it’s important to keep up with the number of locations you visit. Observing your daily habits can make your insurance needs clearer.
Finding the right auto insurance coverage for your business is an important step that could save you from financial disaster. Your business needs are unique and you need an insurance policy that will keep you covered without bankrupting your company. At LoPriore Insurance, our motto is insurance that fits your lifestyle. The way you do business is a big part of your daily life. Our agents are ready to help you navigate the complex details of personal and commercial auto insurance. We’re happy to answer your questions, offer an instant quote, and provide information about commercial auto policies.