Commercial Auto Insurance for the Home Based Business Owner


If you have your own business and run it from home, it is easy to blur the lines between personal and business. This can lead to confusion about how you manage certain aspects of your operations. With all the IRS guidelines, home business ordinances and other regulations, it can be easy to lose sight of what is business-related in your humble dwelling.

The Basics of Personal Auto Insurance

Personal auto insurance does not depend on whether the vehicle is owned. It is more about how the vehicle is used. Personal auto insurance covers expenses and liabilities that result from an accident that occurs while a vehicle is being used for personal purposes. This could be going to the grocery store, ballet recitals, and other personal errands.

Personal coverage covers all of the basics you’re used to including collision, bodily injuries liability, personal property liability and comprehensive. Personal auto insurance may require you to give information about your work and whereabouts. However, your home business will not affect your rates. It may decrease your risk and create a lower premium.

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Commercial Auto Insurance is the Right Fit

Now we know that personal auto insurance does not cover the vehicle’s ownership, but the use of the vehicle. A home-based business owner may be more likely than an employee to use their vehicle for business purposes. Why? You almost certainly use your vehicle for business purposes unless you order office supplies online. You may also need to pick up clients or property, purchase resellable items, drive to meetings or to a coffee shop to work, and your travel could be considered business-related by insurance companies.

Your insurance company could deny your claim if your only auto insurance covers you for an accident that occurs while you’re out running errands, no matter how small or time-consuming. You have requested that they insure your vehicle on the basis of a specific type of usage. Because they are unable to accurately assess your risk, adding business usage into the contract changes their ability of insuring your vehicle based on your actual exposure.

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While commercial auto insurance provides many of the same benefits as personal insurance it can also be used for business purposes. You can even design your policy to cover multiple drivers or multiple purposes. This allows you to get both personal and commercial coverage, which is sufficient for your actual use.

Commercial auto insurance allows you to set deductibles or limits so that you can pay the premiums you can afford. You should be careful with your deductibles. These must be paid out for every incident and can prove financially costly if they are too high. Low limits can lead to lower premiums, but they also put you at greater risk of financial loss than you are able to afford.

It’s a smart idea to look at your driving habits if you own a home-based business. It might surprise you at first how often you use your personal car for business errands. It’s a good thing to be surprised before you get into an accident. This gives you the opportunity to find the right insurance to protect your family, your business and your financial future.

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