What Constitutes Business Car Insurance

Written By: Tom Martens on March 15, 2010 No Comment

Personal car insurance and business car insurance are necessities in our daily life. Many differences align the two and the price varies as well. When it comes to personal and business car insurance, there are some distinct differences.

When a business chooses to get a car insurance policy, they need to look at a few things. First, they need to address who will be on the policy. For example, in a personal policy, you have the responsibility of your family. Your family is a lot less liable than your business, even if you have a teenager. The best thing a business can do is retrieve the applicants driving record before they hire them on as an employee. By doing this, you are ensuring your insurance premiums to not skyrocket as well as the fact that you would even be able to add them on.

The way the business policy works is to allow the business owner to decide what is most plausible for their business practices. For instance, you would want to carry additional coverage if you were transporting expensive materials or delivering important items. In a personal policy, you will not have to worry about that. This is one distinction between personal vs. business car insurance.

Keeping track of gas and miles seems like a daunting task, however, it is a business necessity. It is very important that you distinguish which miles were used for personal use and which were used for business use. This helps on all fronts and is often tracked using a computer based model.

Keeping business use and personal use separate is always the recommended path. Most people find that their business use is very limited and do not see the reason why they should take out a separate business insurance policy. Although this may be logical, you need to make sure your bases are covered. This means that if you choose to use your personal car insurance policy for business use that is limited, you will need to inform your car insurance agent of this change so they can adjust your policy to cover it. They can find cause to deny your claim if you are found to be using your vehicle for business purposes that were not defined in your policy.

As stated above, you rate will increase because your usage has increased. Understand the usage for business is anything that is defined out of your daily use. In other words, driving to a conference is business use. This even applies if they reimburse you for miles and gas. If you transport goods or deliver items, you are using your personal vehicle for business use and it has to be documented. Sometimes we do not view things as business use because we consistently do them without even thinking. . Always keep everything in check because there are certain ramifications for not complying.

Everyone always looks to get the bare minimum; however, imagine yourself cashing in on that later if something were to happen. Do you really want to be stuck with a large bill because you made the wrong choice prior? The best thing to do is talk to a car insurance agent and find out what is best for your particular situation.

Graham McKenzie is the content syndication coordinator for Carinsurancesa.co.za. South Arica?s leading Car Insurance portal.