SHOULD I USE A PERSONAL AUTOMOBILE POLICY FOR MY COMPANY CAR?
Automobile insurance covers the owner of the car, the driver of the car, and/or an insured driving a temporary vehicle. If the company owns the vehicle, the company needs to provide liability coverage for its risk of operating the vehicle on the road.
As a driver, you need Liability insurance even if you don’t own a car. Drivers are held responsible regardless of ownership. Entrepreneurs who own a company car and a personal car need both policies.
If you drive your car for business, the company still needs Liability insurance to protect against the risk of operating a vehicle on a public road. Tangential issues include:
Pick-up trucks and vans are excluded from business use in many personal automobile policies. Claims will be denied under these conditions. Courts have been “piercing the corporate veil” recently.
If the business and individual are judged to be too closely tied financially, corporate limited liability can be lost. Separating business from personal usage avoids IRS problems when allocating deductible expenses. Keep liability clearly separated. A business issue can destroy your unrelated personal wealth.
If employees are transported in your personal car, Workers Compensation coverage blurs into personal liability. Is driving to lunch business or personal? If another employee drives your car causing you an injury, you are exempt from your Liability policy.
Too many scenarios can occur to confuse commercial coverage with personal coverage. If you work for a company as an outside sales representative and drive your own car, use a Business Use Personal Policy. If the company owns the car, your Personal Automobile coverage will provide Liability insurance for you personally, but not the company. If you don’t own a vehicle, but drive a company car personally, purchase a Non-Owners Personal Policy.
Whichever entity owns the vehicle – titled name – requires Liability insurance. Commercial Automobile coverage is designed for automobiles, trucks, vans, pick-up trucks, assorted delivery vehicles, even dump trucks. Rating, that is premium generation, considers multiple drivers of mixed experience and more miles driven.
Personal Automobile policies do not anticipate non-family operators on a regular basis. Usually, the application asks who will be driving the vehicle regularly. It is not favorable to list several employees.
The cargo transportation industry has its own truckers form. Garages and repair shops carry Garage Keepers coverage. The insurance industry creates forms and policies that fit the unique needs of different business models.