<\/p>\n
Before I get into this,\u00a0let me define a couple\u00a0things:<\/p>\n
First, when I say \u201cpersonal auto policy\u201d I\u2019m talking about what most people simply call \u201ccar insurance.\u201d \u00a0This is the type of insurance most people have. \u00a0It is the insurance for cars that are not owned or used by or for a business. \u00a0When you have a car that you drive to work, to the grocery store, to visit friends, to go on vacation, etc., you get covered on\u00a0a personal auto policy\u00a0as opposed to a\u00a0business (or commercial) auto policy.<\/p>\n
Second, a \u201cbusinesses auto policy\u201d and \u201ccommercial auto policy\u201d are\u00a0the same things. \u00a0Those two terms are interchangeable. \u00a0For the rest of this article, I\u2019ll use the term \u201cbusiness auto policy\u201d because it\u2019s shorter than \u201ccommercial auto policy.\u201d<\/p>\n
Now that we\u2019ve got our terms defined, it\u2019s time to talk about the purpose of this article: what type of auto policy do you need?<\/p>\n
For most situations it\u2019s an easy call. \u00a0When you \u2013 a person, not a business entity \u2013 own a car \u2013 not a heavy weight vehicle \u2013 and you use it for those things mentioned above like commuting to work, going on vacation, running errands, taking your kids to soccer practice, \u00a0you need a personal auto policy. \u00a0Easy.<\/p>\n
On the other end of the spectrum, it\u2019s also an easy call. \u00a0If you\u2019re a trucker that hauls freight in your semi-truck, \u00a0or if you are a contractor that has a truck with a cherry picker used to service light poles, you need a business auto policy.<\/p>\n
But as we get closer to the middle of the spectrum, the answer is not as clear. \u00a0What if you deliver pizza? \u00a0What if you pick up passengers for Uber on weekends? \u00a0What if you\u2019re a contractor with a pickup truck that drives to the job site? \u00a0What if you\u2019re a business owner who owns a corporation that owns the car that you use to drive to work on a daily basis? \u00a0The answers are not as easy to determine.<\/p>\n
So how do we determine which type of auto policy you need? \u00a0Great question. \u00a0The way I determine is by starting with a personal auto policy and finding out reasons why you wouldn\u2019t fit on it. \u00a0Why do I do this? \u00a0Because the coverage on a personal auto policy is very broad and the pricing is usually lower. \u00a0In other words \u2013 if you and your vehicle can fit on a personal auto policy, that\u2019s probably the best place to put you.<\/p>\n
Here are the questions I ask to determine whether you fit on a personal auto policy:<\/p>\n
1)<\/strong>\u00a0Do you transport people for a fee? \u00a0If so, you do not fit on a personal auto policy and you must be insured on a business auto policy. \u00a0The standard ISO policy (ISO is the company that writes policies that insurance companies either use word for word or base their policies on) excludes liability if you\u2019re transporting people for a fee. \u00a0What this means is that if you get in an accident and injure someone or their vehicle, your insurance policy would not pay one cent. \u00a0This would apply if you are an Uber or Lyft driver, or any other type of taxi service. \u00a0Note that share-the-expense carpooling is not excluded. \u00a0So don\u2019t worry \u2013 you can still pick up your friends, take them to the ball game, have them pay you back for the gas money, and still be covered.<\/p>\n 2)<\/strong>\u00a0Do you transport goods for a fee? \u00a0If so,\u00a0you do not fit on a personal auto policy and you have to go on a business auto policy. \u00a0Like the human transportation exclusion, a personal auto policy excludes liability coverage when you haul goods for a fee. \u00a0If you are going to be a trucker, moving company, piano mover, common carrier, or some other sort of product transportation company, you need a business auto policy because liability coverage is excluded on a personal auto policy.<\/p>\n 3)<\/strong>\u00a0Do you have a really heavy vehicle? \u00a0First, when I say \u201d really heavy vehicle\u201d I\u2019m talking about vehicles that have a greater-than 10,000 Gross Vehicle Weight (GVW) that are not pickup trucks. \u00a0Some examples would be box trucks, refrigerated trucks, flatbed trucks, pump trucks, dump trucks, cement mixers, and semi-truck tractors. \u00a0If you have a really heavy vehicle, you do not fit on a personal auto policy and have to be insured on a business auto policy. \u00a0Liability coverage is excluded for any business use of these types of vehicles on a personal auto policy. \u00a0Technically, if these vehicles aren\u2019t used for business, coverage still exists. \u00a0However, personal auto insurance companies are not going to let you insure one of these trucks on a personal auto policy, so if you own one of these types of vehicles and are now wondering which type of policy it\u2019s insured on, the answer is: it\u2019s overwhelmingly likely that it\u2019s insured on a business auto policy.<\/p>\n The three reasons mentioned above are situations where a personal auto policy, were it to be the insurance policy in place when you got in an accident and injured someone and damage their vehicle, would simply not pay the claim. \u00a0Coverage is excluded.<\/p>\n There are situations, however, where liability coverage may not necessarily be excluded, but personal auto insurance companies generally do not want to insure, and would therefore not offer you coverage were you to apply. \u00a0Below are examples of those situations. \u00a0If any of them apply to you, you most likely need to be insured on a business auto policy, unless your personal auto insurer has approved the situation.<\/p>\n 4)<\/strong>\u00a0Are you a business owner that regularly lets your employees drive your vehicle? \u00a0If so, you might not fit on a personal auto policy. \u00a0Yes, permissive drivers are usually covered on a personal auto policy, but when non-household members regularly drive a covered vehicle, insurance companies get concerned and feel like the policy is being used in ways that weren\u2019t\u00a0intended. \u00a0Some personal auto policy insurers exclude everyone that\u2019s not listed as a driver! \u00a0Yikes!<\/p>\n 5)<\/strong>\u00a0Does a\u00a0corporation owns the vehicle, not you personally? \u00a0If so, you might not fit on a personal auto policy. \u00a0Note that some insurance companies don\u2019t have a prohibition on corporate-owned vehicles. \u00a0Others will only accept corporate owned vehicles if the owners of the corporation are the same people as the named insured. \u00a0For example, if John and Jane Smith are husband and wife and they own ABC, Inc. in full, their car that is owned by ABC, Inc. may still be eligible on the personal auto policy.<\/p>\n 6)<\/strong>\u00a0Do you have advertising for your company on the side of your vehicle? \u00a0If so, you might not fit on a personal auto policy. \u00a0Every insurance company has their rules on this. \u00a0Some don\u2019t care about advertising, and some do.<\/p>\n 7)<\/strong>\u00a0Do you deliver pizza, flowers, or some other item for the company you own or work for? \u00a0If so, you might not fit on a personal auto policy. \u00a0 This situation is a little different than item 2 above because here\u00a0there isn\u2019t necessarily a fee involved. \u00a0In this situation, you are not acting as a haul-for-a-fee service, but you are clearly delivering goods. \u00a0Papa John\u2019s delivers your pizza for free \u2013 you just have to tip the delivery guy. \u00a0Is there coverage or not? \u00a0This is very close to the line where on one side coverage exists, and on the other, coverage is excluded. \u00a0Insurance companies differ on how to handle this. \u00a0Some of them have outright exclusions, while others prefer to let the ambiguous wording in the policy do the talking.<\/p>\n There you have it: the reasons why you may need to be insured on a business auto policy. \u00a0If you answered yes to any other questions above, you most likely are best suited to be on a business auto policy. \u00a0If you\u2019re insured on a personal auto policy now, it\u2019s worth double checking with your agent to make sure you\u2019re covered.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" When should I have a personal auto policy and […]<\/p>\n","protected":false},"author":3,"featured_media":3466,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12,3,29],"tags":[],"class_list":["post-3465","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-auto-insurance","category-business-insurance","category-personal-insurance"],"_links":{"self":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts\/3465","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/comments?post=3465"}],"version-history":[{"count":1,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts\/3465\/revisions"}],"predecessor-version":[{"id":44634,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/posts\/3465\/revisions\/44634"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/media\/3466"}],"wp:attachment":[{"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/media?parent=3465"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/categories?post=3465"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finfrockweb.com\/gis\/wp-json\/wp\/v2\/tags?post=3465"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}