In most cases, home-based business owners use their personal vehicles for work-related purposes. So, should you insure your vehicle with commercial or personal coverage?
If you're not using the car during your normal course of business, you should be fine with a personal auto policy. However, if you use it for business purposes, you likely need a commercial auto policy.
As an example, if you deliver pizzas, newspapers, or other types of products in your vehicle, you need to insure it with a commercial auto policy. Your personal auto policy likely excludes these activities, which means an accident or other loss incurred during the course of business would not be covered.
If you are paid to transport people from one place to another using your personal vehicle, such as a taxi service, you also need a commercial auto policy, as this type of action is not covered by a personal auto policy.
Another consideration is who's riding in the car with you. If you are an independent real estate agent and you transport clients on a regular basis, or if you operate a delivery service out of your home, you need a commercial policy - insurance that will cover your business assets if you are involved in an accident during work.
Specific auto coverage is not affected by whether you have a commercial or a personal auto policy for your home-based business vehicle. If you have a personal auto policy and go on vacation, you should be covered. The same goes for a commercial auto insurance policy.
Commercial auto policies are priced the same as your regular auto policy. To set the premium in both cases, insurance companies look at the number of miles you drive, who drives the vehicle, and the insured's driving record and claims history. The liability limits you choose and your comprehensive and collision deductibles are also factored into the equation. The higher the limits, the higher the premium. Lower deductibles will cost more too.
Do not make the mistake of assuming low limits will save you money in the long run. Home-based business owners need to pay careful attention to liability limits in order to adequately protect both personal and business assets. If you cause an accident, involved parties can go after you as an individual, and as a business owner. In order to minimize financial risk, higher liability limits are strongly recommended.
In summary, whichever policy you choose, commercial or personal auto, you will be protected just as you are with any Valparaiso auto insurance policy. The claims process is the same and the cost difference between the two policies for a home-based business owner is often negligible.
Give us a call at General Insurance Services today for more information!