Will I Need Commercial Auto Insurance If I Use My Car for Work?
According to the Insurance Information Institute (III), your occupation may affect your car insurance costs. For instance, college-educated professionals who work in skilled positions tend to pay lower rates than blue-collar workers with only a high school diploma. Additionally, using your personal car for work purposes may affect your insurance premiums.
Here’s a closer look at how your occupation may factor into your car insurance costs.
Do Some Occupations Carry Lower Risks?
Regulators typically prohibit insurers from using discriminatory factors such as income, religion, and nationality in calculating insurance rates. However, your title or your daily schedule can be used in calculating your rates, depending on how much it increases the likelihood of a claim.
Some professionals such as nurses, teachers, and pilots may pay lower premiums because their work entails paying attention to details, and therefore, they are less likely to be in an auto accident. Conversely, some professionals such as photographers and athletes may pay higher premiums because the nature of their work is more chaotic.
Some Professionals May Need Commercial Auto Insurance
Personal car insurance policies typically exclude business use. That means if you get in an accident while driving your vehicle for business/work purposes (except when commuting), you won’t be covered by your personal insurance policy.
What to Consider When Choosing Between Personal Insurance and Commercial Insurance
Some of the factors you should consider when choosing the right auto insurance policy for your needs include:
Who owns and uses the vehicle?
If a vehicle is owned by your company, you likely need a business auto insurance policy.
What purpose does the vehicle serve?
If you use the vehicle for commercial purposes, you likely need commercial auto insurance.
What is the weight and type of the vehicle?
If a vehicle is heavier than the typical personal vehicle – for example, a tow truck, dump truck, or commercial trailer – you may need a business auto insurance policy. You may also need a commercial auto insurance policy if you’ve installed permanent commercial equipment in your vehicle.
Higher Liability Limits
If your vehicle requires a higher liability limit, you should consider commercial insurance. Business auto policies typically provide higher liability limits compared to personal car insurance policies.
Business Auto Insurance Cost
Commercial auto insurance typically costs more compared to personal auto insurance. The higher cost is because you’re exposed to higher liability when engaging in commercial activities. Additionally, commercial insurance provides higher liability limits and offers protection against lawsuits targeted at your business in case you’re involved in an accident.
Hired and Non-Owned Insurance
If your employees use their personal vehicles to run work errands or you rent a vehicle for business purposes, or your business leases vehicles, getting a hired and non-owned auto insurance policy is advised. This policy covers rented, leased, and personal vehicles used for commercial purposes. The policy, however, only covers legal bills relating to an accident. It doesn’t cover vehicle damage.
In the last decade, options for using personal cars for business have expanded, thanks to ridesharing platforms such as Lyft and Uber. Because of the increasing need, more and more insurers now offer distinct ridesharing insurance. In many cases, getting a personal policy that incorporates ridesharing coverage is cheaper than buying a commercial insurance policy.
If you use your vehicle frequently or primarily for business, you’ll likely need commercial auto insurance. Conversely, if you only use it occasionally for business purposes, your insurer may offer you a personal policy that covers work-based driving. For all of your auto insurance you deserve, talk to the professionals at Little & Sons Insurance Services, serving Banning and neighboring cities in California, Arizona, and Texas. We look forward to getting to know you and your vehicle needs so that we can offer tailored solutions to give you peace of mind.