You may think you do not need to apply for business car insurance since you can also use your personal vehicle for business. However, you must know the differences between business and personal auto insurance. To their dismay, many companies and their employees realize later on that differentiating the two is really important.
Basically, business auto coverage refers to insurance of company owned vehicles, leased autos, and employee vehicles that are used in official business operations. On the other hand, personal auto insurance covers vehicles used for personal needs. The major difference is that you can use the latter anytime, anywhere and still get coverage. However, this is not how business car insurance works. It only covers office hours and trips that are related to business.
The rate of this policy largely depends on how you use the vehicle. When you sparingly use your auto, rates will be reduced considerably, which essentially gives you lower rates for low mileage. However, it is a very different story when you drive it most of the time transporting expensive goods. Moreover, the coverage for cargo or goods necessitates a different payment. Here, you may need to pay extra.
A car usage policy is in place if your people or workforce tends to drive vehicles on personal matters. You may need to set up a meter to differentiate business mileage from personal mileage. You should inform your business car insurance company about how each of the cars are used. Your agent will then customize a policy that applies to your situation. While it usually costs a little more, it is always better than being left without claims. You being denied may translate into heavy losses for your business.
Many employees are not too careful about driving company vehicles. Hiring an employee who has this attitude (or has a bad driving record) will hoist the rates of your policy. Thus, make sure that the driver considers company autos like it is his or her own. Traffic tickets and road accidents here and there will get you high risk coverage with matching high rates.
Make sure that the use of a car stays within limits declared in the policy by having a clear definition of what are official as well as what are not. You may need to issue trip tickets or mission orders duly signed by authorized company personnel to legitimize company car requests. You definitely need to get business car insurance. Just make sure employees use company vehicles according to the conditions in the policy.
