Businesses that Require Commercial Auto Coverage
Question: What type of business is eligible for a commercial auto policy?
Answer: If you use your car in the course of employment or for business purposes you should consider business use coverage.
Say you use your car to run your kids to school, soccer practice, ballet lessons, basketball games, and to buy groceries. Maybe you take the family on a camping trip or to church on the weekends. Perhaps you drive to the same job every day, on the same route, the same time five days a week. Do you need a business auto policy? Obviously not!
Now, let's say you run errands for your employer around Hillsboro, or you use your car as a courier service in the Portland Metro Area, or deliver newspapers or pizzas in Gresham. Hmmm. Now were talking commercial use. Does your personal auto policy cover you for those activities? Why do you think those pizza delivery places give their drivers magnetic detachable signs to put on the roof of the car? That activity is not covered under a personal auto policy. You convert your van into an ice cream truck in the summer time? Not covered on personal policies. Especially when that tinny music is so annoying! These activities require a commercial auto policy.
If you are a carpenter, brick layer, electrician, roofer, or a plumber, you need a commercial auto policy. Most personal auto policies have a provision in them for use of personal automobiles and light weight pickup trucks in the course of business if the driver is in outside sales or must drive from one location to another during the day. But this type of business use implies no transportation of passengers, employees, materials, or cargo other than samples or manuals. If you carry more than samples (say, extra materials lacking at a particular job site) then you should go commercial.
Why a commercial policy? The legal language of a personal auto policy differs from that of a commercial auto policy. The business auto policy allows for multiple drivers that aren't related to or live with the insured like a personal car policy does. It defines the activities and uses that are covered that apply typically to employment or business. You run the risk of having your claim denied if you fail to purchase the proper commercial policy and you are caught using your car for business purposes. That's serious business!
Truckers and haulers can benefit from a short distance commercial truck policy. Shorter distances usually translate to lower prices. Retailers who have a warehouse in one city but supply materials with a small cargo van or truck to adjacent cities will appreciate the coverages tailored to their needs on a small commercial auto policy. Couriers that deliver packages and envelopes don't need truckers coverage. A light duty van or private passenger vehicle used to make multiple stops during the day needs a policy that looks more like a private passenger policy but that allows employees and lots of destinations.
Farmers can usually get an auto policy attached to a farm package policy that allows personal autos as well as pickups, vans, and trucks that are used in farming activities. Sometimes the farmer is caught in a situation where a particular vehicle or driver isn't eligible for the farm auto policy. Check with us at Insuresource Agencies, LLC (Westside) or Pulse Insurance, LLC (Eastside). We'll be happy to offer you a plan that may be more flexible than most farm packages.