Many car owners and drivers dismiss the idea of getting business car insurance arguing that they can always use their personal automobile for business. However, there are major differences between personal and business auto insurance that must be crucially understood. Much to their dismay, numerous companies as well as their employees realize too late that differentiating these two types of auto insurance is critical.
What are their differences? As its name suggests, in business auto coverage, you are insuring leased autos, company owned vehicles, and employee cars used for company-related matters. On the other hand, personal auto insurance refers to the coverage of automobiles used for personal purposes. One primary difference is that you can always use the latter and still get covered anytime, anywhere. However, this is not the case for business car insurance as it only covers business trips and office hours.
The cost of this policy partly rests on how you use your vehicle. Using cars sparingly, on occasional basis, may give you huge discounts. Insurers usually provide cheaper rates for very low mileage. However, the story is altogether different when you drive your vehicle often or use it for transporting expensive and perishable goods. In addition, coverage for the cargo needs a different payment.
A vehicle usage policy is in place if your employees have a tendency to drive company cars on personal matters. Set up a meter to distinguish personal mileage from business mileage and inform your business car insurance provider about how your company vehicles are used. Your insurer will then create a policy applicable to your situation. Sure, it would cost you a little more, but it is better than being left without any claim. The downside of being denied is that it may lead to severe losses for your company.
Many employees do not care much about their driving habits while using company vehicles. Hiring employees with this kind of attitude (or with a spotty driving record) will raise the cost of your insurance. Thus, be sure that the person behind the wheels considers company automobiles like it is their own. Moreover, be sure that the use of company cars stays within limits declared in the usage policy. Make a very clear definition of the term “official” to avert any conflict in the future. Road mishaps and constantly violating traffic rules and regulations will give you high risk car insurance policy with matching extremely high rates.
If you own a company and have your cars driven by employees, business car insurance is a must. To get a cheaper package make sure employees use these vehicles safely and maintain a good driving record.