Vehicles Used for Business: Commercial or Personal Policy?
We’re writing this blog post in an attempt to answer some of the questions frequently asked by our customers, this time, concerning vehicles used in business. There is a fine line for whether or not a vehicle should be insured on a commercial auto policy or a personal policy (listed as business use). Each case is very different, and talking to one of our agents is probably the best way to get the answer your looking for, but here are some helpful tips to consider for yourself.
On your personal insurance there is generally 3 ways companies will have you list the usage of each of your vehicles: pleasure use, commute to work, or business use. Commuting to work is exactly what it says. You use your vehicle to commute back and forth to work and for personal use. Pleasure use is a vehicle you have and use that does not make a daily work commute. Business use, however, can apply to a few things. Here are some of the things business usage of a vehicle can apply to on a personal lines insurance policy:
- You drive for Uber or Lyft.
- You act as a delivery person for a food service or business and are not furnished a vehicle but use a personal vehicle.
- You use your vehicle to make sales calls and travel extensively due to a sales or delivery job.
These instances may merely require you to place business usage on one of your personal vehicles, which usually comes with a surcharge, but is not overwhelmingly expensive. These things are usually covered under business usage by insurance carriers, although you should check with your specific carrier to make sure. For instance, Erie Insurance is a leading insurer for Uber and Lyft drivers which some companies have not quite come around to yet.
With these instances being listed, it is necessary to establish when or if your vehicle needs to be listed on a commercial auto policy, rather than on your personal policy with business usage. There are a handful of questions you can ask yourself to distinguish if your vehicle belongs on a commercial auto policy, such as:
- Is the vehicle titled to a business or LLC, or to an individual?
- Is there business signage, phone numbers, or decals on the vehicle?
- Do employees or co-workers regularly drive your vehicle for business purposes?
- Do you tow or deliver business equipment on a regular basis?
If the answer to any of these questions is yes, you may need to consider buying commercial auto insurance to protect you, your business, and your vehicle. Of course, the simplest way to decide is to call us or your agent and ask them what they recommend. We have quite a bit of experience insuring commercial auto from single vehicles to full fleets of vehicles throughout Indianapolis and the rest of Indiana. Please contact us if you have any questions about how to properly insure your vehicles that are used in business.