Does It Cost Less to Insure a Vehicle for Business?

Commercial or business car insurance is typically not cheaper than personal auto insurance, according to Wallethub.com. One of the more common reasons is because of higher liability limits than what usually apply to personal car insurance. Here’s what you need to know about why it usually costs more to insure a car for business and why it’s worth considering.

Why Insuring a Car for Business Costs More

In addition to higher liability limits, insuring a car for business typically costs more because of the increased scope of the coverage included with a policy of this nature. Other factors include:

• Higher mileage than what’s typical with cars for personal use only
• Special equipment that may be included with some cars used for business
• Increased liability risk
• The possibility of having multiple drivers use the same car for business

There’s More Protection with Commercial Car Insurance

Insuring a car for business is more of an investment, but it comes with extra protection that tends to be appreciated. A standard commercial auto insurance National city policy typically includes:

• Bodily injury liability coverage
• Legal protection if an injured party makes a claim against your business
• Property damage liability coverage
• Collision coverage
• Coverage for accident-related damage to your vehicle

Personal Car Insurance Has Limitations for Business Purposes

If you have a car you primarily use for your business, it makes more sense to opt for commercial auto insurance due to the risks involved. Also, certain types of business-related use and some vehicles may not be eligible for personal car insurance coverage. Even if an accident occurs in a vehicle you use for business but you’re using it for personal reasons at the time of the accident, a personal vehicle insurance claim may not be accepted.

Multiple Vehicles Can Often Be Covered with Commercial Auto Policies

The extra expense to insure a car for business can be further justified if you have more than one vehicle that needs coverage. For example, if you have a smaller or mid-sized business and you and your employees use different cars for service calls or other business-related reasons, it’s often possible to have all these vehicles covered under one policy.

Some Insurers Offer Coverage for Unique Circumstances

It’s becoming increasingly common for people to use cars for ride share businesses on either a part-time or full-time basis. This is something of a gray area, since what applies insurance-wise can vary. However, some insurance providers are now offering special coverage for rideshare drivers. The purpose is to bridge the gap between personal and commercial auto insurance.

Assess Your Needs to Determine What’s Right for You

While it’s tempting to stick with a personal car insurance policy even if you sometimes use your vehicle for business, doing so comes with some risks. For this reason, it’s best to determine what kind of vehicle insurance is right for you based on how your car is most often used. If you’re not sure what’s going to work best for your needs, talk to an insurance agent for recommendations. 

If you aren’t sure whether you’re required to purchase commercial auto insurance, it’s a great idea to contact a knowledgeable insurance agent for information. The experienced agents at Altra Insurance Services can help you with a wide variety of insurance options, including motorcycle, homeowners, and commercial insurance Chula vista residents should call one of our friendly representatives today at (800) 719-9972.