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If you drive a work van, delivery truck, part-time taxi or any other vehicle for business reasons other than your daily commute, you likely need business auto insurance. When your vehicle is essential to your income, this higher liability insurance can protect both company-owned vehicles or your own car if you use it for work.
You’ll face many problems when relying solely on a personal auto policy (PAP) for business use.
In many cases, yes, your personal car insurance will provide coverage for some business use of your vehicle. It largely depends on the type of vehicle, how you use it and how often it’s used for business. Carefully review your current personal auto policy and speak to an insurance professional to determine whether your specific use is covered. If not, you can easily close any gap in your protection by picking up a business auto policy.
A business auto insurance policy can be your strongest protection if:
Cars that are used for business purposes usually spend more time on the road, which means they’re more likely to be in an accident. Because of this higher liability, it generally costs more to insure a vehicle for business compared to personal use. There’s no typical cost for this coverage, with annual costs ranging from $450 to $2,750, and sometimes more.
The cost of your business auto insurance depends on factors that include:
Business owners can find plenty of ways to save on commercial auto insurance.
Commercial insurance has unique requirements compared to a personal auto policy, and these requirements can vary by state. The most common difference is the coverage minimums.
For example, California requires drivers to carry a minimum of $15,000 per person and $30,000 per accident in bodily injury liability for personal auto insurance. However, a business or commercial vehicle is required to carry a minimum of $300,000 liability for vehicles less than 10,000 pounds and $750,000 for vehicles over 10,000 pounds.
Like personal auto policies, business auto insurance provides a wide range of coverage options to protect you and your vehicle after an accident.
You can typically find policies that cover you or your employees based on how much business driving you do.
When looking for business auto insurance, it’s better to err on the side of caution. Overall, the right policy will meet three main needs:
When looking for the right coverage for your needs, ask yourself about:
If you drive for Uber, Lyft or any of the other growing number of rideshare companies out there, you have more options than ever before. Big-name insurance providers like Geico, Allstate and MetLife are working to meet the demand with insurance that bridges the gap between a personal auto policy and coverage provided by the rideshare company’s insurance.
Rideshare insurance policies aren’t yet available in all states. If it’s not yet available in your state, consider picking up a business auto policy that fully covers you for accidents that occur before, during and after a ride request.
It’s possible that your standard car insurance policy is adequate for your needs, but confirm any exclusions to learn when you’re still covered while driving for business purposes. Compare all your business auto insurance options to find the best insurance for your business-use vehicle.
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