Many mistake commercial auto insurance for traditional auto insurance and believe that it can be used interchangeably for their business activities. It is important to remember personal auto insurance policies are designed and assessed differently because they were not designed for commercial use. More importantly, business owners require the extensive coverage provided by commercial auto insurance.
In this article, we will be addressing common commercial auto insurance myths and the truth behind them.
Myth 1 – Even if I use my vehicle for commercial purposes, I am covered by my personal auto insurance
You must inform your insurance provider if you use your personal vehicle for work-related activities like:
- transporting supplies
- hosting meetings with clients
- meeting with customers
- any other business-related activities.
This is due to the fact that insurance is priced according to usage, and your car is likely insured for personal use only and not necessarily for business use. They may update your existing policy to accommodate company operations or, if necessary, issue you a separate commercial auto policy.
Myth 2 – Businesses with seasonal operations do not always need commercial auto insurance
Your stored vehicles won’t be protected if you don’t carry commercial auto insurance throughout the year. Instead, businesses can benefit from a comprehensive-only policy, which offers minimum security against occurrences like theft, vandalism, bad weather but does not necessitate liability coverage during the specific off-season months. It could also ultimately save you money.
If you cancel your policy during the off-season, you may have to pay significantly more for a new one, since most insurance companies need confirmation that you are still insured.
Myth 3 – My employees are insured when they drive my commercial vehicles
Only drivers who are specifically named on the policy will receive coverage from auto insurance companies. Therefore, be sure your insurance policy allows “permissive use,” which implies that all of your drivers are protected.
Myth 4 – My tools and equipment are covered if they are in a business vehicle.
The coverage for tools and equipment is one of the most misunderstood aspects of commercial vehicle insurance. Losses to your tools and equipment are typically not covered by your commercial vehicle insurance. Usually, equipment that is permanently attached to the car will be protected.
However, loose tools, tool boxes, equipment, and supplies won’t be covered unless particular coverage for these items is indicated in the policy.
Myth 5 – My home-based business doesn’t need commercial auto insurance.
The location of your company’s operations is essentially irrelevant. Don’t assume your personal auto policy will give you all the coverage you require if you utilize cars for work. If you utilize trucks larger than pickups or if vehicles are registered in your company’s name, you almost certainly require commercial auto insurance.
Make Pierce Insurance Group Your First Choice
Having worked with so many businesses throughout the area, we know that every business has unique needs. Our team always works closely with new clients to assess their specific risks and exposures. For more information about our commercial auto insurance policies, contact Pierce Insurance Group .