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Why You Do Not Need Business Car Insurance


Taking out an insurance coverage for your car is not a bad idea. It is a great way to ensure that your property is secured from any injury or damage resulting from loss, theft or destruction. Since the past years, losses arising from contingent causes have increased. This prompted a lot of people from students to professionals to obtain insurance policies to secure themselves and their properties. However, you should know, just because this move is a good one does not mean that you should take out a policy on every car you have, especially if you are a businessman.

Business car insurance is not really necessary if you are engaged in business, or in a certain endeavor where you have a car or any other vehicle exclusively used in it. The reason is that a business or company vehicle is only one of your assets. More often than not, there is already an insurance you may have taken out to secure assets from loss. Taking out another indemnity arrangement for a vehicle would not only be redundant; it would be illegal.

It is a basic rule in the world of insurance that you cannot have your property covered for an amount more than it is worth. This is a case where over-insurance or double insurance would take place. Should you experience a loss, you will only be able to recover the actual value of your car – maybe less. Suppose you already had a policy taken out on all your assets. Your company vehicle is most likely included. Insuring it again will result in its being secured for a higher amount. This is the first reason why you do not need business car insurance.

Another reason is that business car insurance will put you back on more expenses. When experiencing a loss, you will not be able to recover more than what your car is worth. You will have to spend for payment of additional premiums. Chances are you even get penalized for getting it over-insured in the first place. The logic for this reason is; why should you spend more for something that you cannot use after all?

Now, suppose you do experience a loss. Your vehicle was damaged. Stake a claim with your insurer for the amount under which it was insured. When you insure assets, a separate policy is usually issued for each class. It would be absurd to issue one policy for all your assets; although in this case, it would be divisible. This is the third reason why business car insurance is not necessary.