What To Do About Insurance When Your Car Serves As Both A Commercial And Personal Vehicle

For independent business owners and contractors who use a vehicle for their work, commercial auto insurance is a necessity. Personal auto insurance doesn't cover much in the way of business use. For people who use one car for both business and personal travel, both policies are necessary, and both should be allowable on one vehicle. But you may face certain restrictions, both in terms of who insures the car for what, and how you drive the car.

You Can Have Two Policies on One Car

First, you can have two policies on one car. The question is whether you can have both a personal and a commercial policy through the same company on the car. Some companies will allow that, and if your insurance agent can add a commercial policy to your file, along with your personal policy, you're good to go. But some don't allow their agents to issue two policies for one car, which means you'll have to find another insurance agency.

Keep in mind that some "business" use is not really commercial use. If you are a remote consultant, for example, and you sometimes drive to the post office to send a business-related letter, but you have no business-related use of the car past that, then personal insurance might cover you. If you're not hauling items for a business, transporting people for a business, and so on, that's a situation where you may not need commercial insurance. You'll want to talk to your insurance agent about that.

Be Very Careful About Combining Business and Personal Trips

When you have one car for both your personal and business use, you have to be very careful about combining personal and business errands and travel. If something happens that requires that you file a claim, you'll need to be able to show that the car was in use for a specific reason at that time. If you're running a business-related errand and then a personal errand and your policies are through different insurance companies, you may encounter some delay as the two decide which policy would really cover the claim. If you can prove that you were on a business-only trip, however, then the agency that administers the commercial policy would clearly cover the claim.

Always Ensure That Your Insurance Companies Know Who Can Drive the Car for What

You may want to restrict who can drive the car to just you, but if you have employees who also need to drive it for commercial purposes or family members who need to drive it for the occasional personal errand, then be very clear with your insurance agent (or agents, if you have two different companies insuring you) about who can drive the car for what. Also, make sure you understand who can drive the car. For example, your commercial insurance may want to cover only you as the driver and not one of your employees. 

For more information about commercial auto insurance, contact a local company.