Business Auto Insurance

Reader’s Question:

I am planning to put up a small home-based pie bakery with delivery service. We shall start with just one vehicle, but if everything turns out good, we might expand. However, right now, would you advise me to avail of business vehicle insurance even though I still have one vehicle?

Jersey

Dallas, TX

Venturing into a new business is highly comparable to going to uncharted territory. There are a lot of risks that you would have to take. Your decisions may go as planned, but they may also go awry. This is why you need to strategically plan your financial input and output in order to make your business grow. And in your case, you should be able to wisely choose which kind of vehicle insurance you would be getting, since you are planning to add delivery service to your home-based pie bakery business.

To answer your question, it all really depends on how much you think your vehicle is going to be on the road. Now that you still have one vehicle to be used for delivery, it is very crucial to correctly approximate the frequency of your vehicle being on the road. The reason behind this is that at this early a stage, you could actually avail of either personal vehicle insurance or business vehicle insurance. If you see your bakery having lots of delivery orders, it would mean your delivery vehicle being always on the road, hence higher exposure to traffic accidents. Business vehicle insurance would be better in this case. If you do see yourself initially not receiving lots of delivery orders, then personal vehicle insurance would suffice, which you could then just change to business vehicle insurance by the time that your business grows.

In any case, consulting an independent vehicle insurance broker could greatly help you decide. They would be able to ask all of your questions.

Reader’s Question:

Can you explain to me why a vehicle insurance policy is a must for aspiring motor traders?

Lina

Phoenix, AZ

Having a vehicle insurance policy for your business, especially for vehicle trading, may be considered as form of investment security. No businessman would want his investment exposed to unnecessary risks and neither would they want to find themselves broke after following a major financial loss. If you are serious about protecting your business and your investments, a business vehicle insurance policy for motor traders is a must. You can ask your insurance agent and your carrier about the details on how you can maximize the potential of inputs and how you can protect your investments through purchasing one of their insurance policies.

Motor trade insurance is ideal for individuals who are involved in the vehicle industry. All those aspiring businessmen who are at a legal age of 20 to 69 years old are eligible to have this kind of vehicle insurance policy. Whatever purpose you serve for your operation, you must truthfully provide the right information at insurance company’s request. Cheating or providing false information would mean voiding any claims in the future. To avoid any of this hassles, it is only right to provide the necessary information that serve your purpose.

Before you move on to looking for vehicle insurance quotes, you have to consider a variety of factors concerning your business that need examination. You have to read all documents that concern coverage for business operation so you will have an idea about their terms and conditions and up to what extent the level of coverage would be most applicable to your business. You have to weigh the benefits over the risk concerning legal concerns. Ask yourself if it will be beneficial for you and your employees. Consider a vehicle insurance policy that has low premiums with a wide coverage. It will be most beneficial to your business.

If you are not so sure what vehicle insurance policy to get for the business, discuss it with your agent in order to have a better idea on which would benefit your business the most.

Reader’s Question:

My truck which I use for delivery will cost an awful lot to insure, won’t it? Do I really have to get a business auto insurance policy for it?

James

Bakersfield, CA

Thinking of mileage alone, James. You should expect to pay more for your truck. It probably gets used more than any other private vehicle, and that’s one good reason for any insurer to raise your auto insurance premium. The result is that a business auto insurance policy costs more than a basic auto insurance policy for a regular driver even though it includes the same coverage – liability and property damage.

If your business isn’t home-based, and it maintains a company car, I’m afraid you don’t have much of a choice but to get business auto insurance coverage. It’s good value for your money, though. You do run greater risks, and having it properly insured can protect the assets of your business.

You also have to keep in mind what you deliver. Some auto insurance companies refuse to sell auto insurance policies to trucks that ferry flammable items, antiques and other valuable items. They stand to lose more, and the risks for them are much higher. If in fact they do agree to cover your vehicle, expect the monthly truck insurance premium to be higher, as well.

Here’s a tip to help you save money: choose a higher deductible, one that you can afford to shoulder from your own pocket in case of an accident.

Reader’s Question:

I have just recently registered my car rental business. The cars will be delivered in a month, but I haven’t decided what auto insurance to get yet. I heard about this small business auto insurance plan. Will this be more advantageous to me, or is it just the same as getting personal auto insurance for each car?

Bobby

San Francisco, CA

Bobby, it seems the car rental industry in San Francisco is booming despite what others say.

In any case, I would say a business plan or rather, in your case, a small business auto insurance would be more advantageous than getting a personal insurance for each car. Aside from cheaper auto insurance rates you will be getting, you will get the coverage tailored fit to your business needs. You should know that a personal auto insurance will not cover you if they found out that you have been using your car for business purposes.

Imagine this scenario: Let’s say you started with ten cars. So, that means your business depends on the temperament of those renting your cars. I doubt that all your renters will be good drivers. Imagine one of your renters getting into an accident. That, of course, will be your company’s liability since you own the car, even if it is the renter’s fault. What if somebody gets hospitalized and the bills would be enough to close your business?

So, what I’m saying is if all your ten cars are out on the road everyday, that means you are exposed to risk ten times, too. Now, the only way to leverage that risk is to get a small business auto insurance coverage with ample liability coverage, so your business won’t suffer if in case one of the cars gets involved in a car accident.

Reader’s Question:

I have a small home-based business, which has been doing well for quite some time already. Now I am already thinking of expanding. If everything falls into place, I will have to start thinking about adding more vehicles. But I do not know whether to get business automobile insurance or not. Would it be better if I avail of personal automobile insurance?

Lily

Jackson, MS

Actually, Lily, you’re not the only one getting confused about whether to get personal automobile insurance or business automobile insurance. It is usually the dilemma of most people who businesses based in their own homes. Most of the time, the majority of business owners are protected by having only their personal auto insurance policy, but this is not always the case.

The thing that you have to remember when choosing whether to get personal automobile insurance or business automobile insurance is the nature of your business.

If your business entails you driving around all the time, it would be best if you stick with business automobile insurance.

Let me give you some examples.

If the business that you run is some type of delivery service, it would mean that your vehicle would be out all the time. It would be better in this case for you to avail of business automobile insurance. On the other hand, if you are some kind of broker for real estate (and the likes) who just uses the vehicle to drive around with prospective clients, I think that personal automobile insurance shall suffice.

If you would think about it, the same things affect your premium. It still is a matter of how exposed your vehicles are going to be to accidents. This is what decides how much your premium is going to be. And also, the higher your liability limits and deductibles are, the less you are going to pay for your automobile insurance.

Reader’s Question:

My husband and I own a small food delivery service. I sometimes use one of the delivery cars to fetch our son from school. If we get into an accident, will our auto insurance for business provide coverage to our son?

Rachel

El Paso, TX

In most cases, business owners who have a fleet but do not normally transport passengers do not obtain medical coverage. This is because the person driving the vehicle is assumed an employee, and if injured in a car accident, then he or she will be covered under the business’ compensation for its workers. So, this essentially means that if your son gets injured in a road accident while a passenger in one of your delivery cars, then his medical payments will not be covered by your auto insurance for business.

If you have health insurance and your son is a beneficiary, or better yet if your son has his own health insurance, then perhaps you really do not have anything to worry about when it comes to medical expenses whether they were from a car accident or any other type of emergency. Coverage that could be given to you will most likely depend on the circumstances surrounding the accident. If you have been driving the delivery car to fetch your son, then, of course, you cannot expect any recompense from your auto insurance because you used the car for personal purposes. This is why it is very important to review the policy of your auto insurance for business. It would also be very prudent to draw up a driving policy, so that your employees know how and when to use the delivery cars. This way, you save your business from costly lawsuits and potential bankruptcy.

Reader’s Question:

I’m planning on setting up a small delivery business. I need to purchase some vehicles for this, so I’d like to know how I can save on the auto insurance.

Kyle

Philadelphia, PA

If you’re looking to set up a business and buying cars for your business, I strongly recommend that you look into getting small business auto insurance coverage for your cars. Small business auto insurance can provide insurance coverage for a fleet of vehicles or even just one vehicle owned by the company. Getting all your vehicles under one policy can save you more money compared to getting different auto insurance policies for each vehicle. You also get to enjoy payment terms offered by most insurance companies for their corporate accounts.

With a small business auto insurance policy, you also get the convenience of dealing with just one supplier for your auto insurance needs. Renewing your small business auto insurance is a breeze as most companies have account managers that remind you when your auto insurance policy is about to lapse. Some companies also offer discounts when renewing claim-free policies. Ensuring that you have enough coverage for your vehicles gives you peace of mind, knowing your business will not be greatly affected should a vehicular accident happen.

Insurance companies offer different types of coverage for small business auto insurance. The most common are liability insurance, comprehensive/collision insurance and medical insurance. Some also provide coverage for your employees who rent or hire cars for business purposes. I suggest that you look up some websites that offer small business auto insurance, which will enable you to find the right deal for your budget.