Do your employees use their personal vehicles to transport equipment, other employees or deliver goods? This can pose a bit of a problem. Can you get by with just personal auto insurance, or do you need commercial auto insurance?
At our insurance agency in Brandon, this is a discussion we’ve had with many small business owners. A lot of them are worried that commercial auto insurance is more expensive than personal auto insurance. Others didn’t realize there were such a big difference, especially if their employees are using personal vehicles.
The reality is that personal and commercial auto insurance have significant differences. If your small business owner in Hillsborough that doesn’t operate a fleet of business vehicles, you may never have given commercial auto insurance much thought. You should know that if you’re using your own vehicle for work purposes that extend beyond commuting, then it’s time to talk about investing in a commercial auto insurance policy.
There’s a lot to talk about in this post, so let’s start by taking a closer look at the difference between these two types of auto insurance.
Commercial Auto Insurance or Personal Auto Insurance?
Our expert insurance agents will tell you that the primary difference primarily lies in the types of liabilities that each policy covers. Both personal and commercial policies will cover against vehicle repairs and medical bills following an accident. However, a commercial auto insurance policy in Florida have higher claims limits, cover a variety of different vehicles and account for the more complex legal issues that could arise from an accident involving a commercial vehicle.
If you’d like to learn more about what a commercial auto insurance policy covers, then please check out this blog post.
Why Personal Auto Insurance Usually Isn’t Enough
Personal auto insurance will only cover you if it’s an accident that occurred while using your car for personal reasons. This would include commuting to and from your place of work as well as travel that is unrelated to your normal job duties. Most personal auto insurance policies our clients purchase ensure the owner of the vehicle plus one or two immediate family members.
If you are a budding entrepreneur or sole proprietor, there are limited cases where the liability coverage from your personal auto insurance policy might be enough. This does not happen all the time. Call our agency if you’d like to ask about modifying your policy to include specific business uses.
Please keep in mind that this is would be for a very specific circumstance (ridesharing, part-time seasonal work, etc.) and not something that would apply to every business owner. That being said, this is why we see so some small business owners forgo investing in a commercial auto insurance policy. A personal policy that has been modified to cover specific business uses would typically be less expensive than a commercial auto insurance policy in Hillsborough.
Why You Probably Need Commercial Auto Insurance
Take your time reviewing these examples, because they should give you a clear picture of when commercial auto insurance is needed.
While running your business in Hillsborough, do you or your employees ever…
- Deliver food or some type of product to paying customers?
- Regularly drive long distances in order to meet with a client or survey a job site?
- Haul equipment or tools to job sites where you’ll be working?
The Problem with Using Your Personal Vehicle to Transport Stuff
Let’s dive into each of these examples a little bit further. There’s a good reason why your personal auto insurance policy won’t cover an accident that occurred while you were transporting goods. It’s primarily because the risk is too high. For insurance companies, using a vehicle to deliver goods on a regular basis would increase your risk of getting into an accident.
Now, if you’re using your vehicle to take some of your office friends to lunch, that would be covered by your personal insurance policy. A lot of people have been asking us if they need commercial auto insurance to earn money as a Rideshare driver. This has represented a more challenging case for insurance companies. what we’re seeing now is that a growing number of insurers are offering Rideshare specific insurance policies. This type of policy would typically be cheaper than traditional commercial auto insurance. if you have some more questions about this, please contact us at (813) 685-9393.
It’s Not About the “Where,” It’s About the “Why”
So we want to make it clear that there is no limit to how much you can drive under a standard personal auto policy. That is as long as it’s for personal reasons.
Let’s look at a real world example from a small business in Tampa. This business employs a sales manager who regularly uses their personal vehicle in our to visit sales lead locations around the entire county of Hillsborough. If this employee gets into an accident on one of their sales runs, you could be facing significant liability.
What You’re Hauling Matters Too
As we mentioned before, commuting to a job is covered by personal auto insurance. Transporting heavy tools or equipment as a part of your commute is another matter. For example, a construction worker is using their personal vehicle to transport a trailer full of expensive, ladders, drills, etc. To an insurance company, this is a dangerous scenario due to the higher risk of property damage and theft compared to the average commuter. If that sounds familiar, you should speak to an insurance agent about commercial auto insurance.
Hired and Non-Owned Auto Insurance
There’s another type of insurance we wanted to cover briefly in this post and that is hired and non-owned auto insurance. This type of policy will cover vehicles that are used for business, but that your business doesn’t actually own. This includes…
- Vehicles that are owned by employees and used for business errands
- Vehicles that you rent for business
Hired and non-owned auto insurance would be used in a situation where you have an employee that is running an errand with their car and get into an accident. Say you send your assistant out to purchase some supplies and they end up rear-ending someone on the way back to the office in Tampa. If you didn’t have the right commercial auto insurance, your company could be liable for the resulting damages.
Modifying Your Auto Insurance Policy in Hillsborough
This blog post should have answered many of your questions when it comes to commercial auto insurance versus personal auto insurance. That being said, there are a lot of unique circumstances that could be impacting your situation. There’s no way for us to cover all of them in this post, so we do encourage you to contact our agency if you would like to learn more and you’re a business owner in Florida.
If you’re only using your car occasionally for business purposes, then an expert insurance agent might be able to modify your personal auto policy so that it covers these work-related uses. We’re often asked if commercial auto insurance is more expensive than personal auto insurance. While it may be more expensive to purchase a commercial auto insurance policy initially, the money it could save your business is significantly greater. A Florida business that relies on vehicles to operate can’t afford to not have a commercial auto insurance policy.
Charles D. Talley Jr Insurance Inc has been helping business owners in Hillsborough for over 35 years and we can help you too. if you have more questions about Commercial Auto Insurance or would like to save money on a better policy, then please contact us today at (813) 685-9393.