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Company Car Insurance

Company car insurance protects cars in a business situation designated for work use. Many owners of smaller companies do not know whether or not they need to carry company car insurance plans. In many cases in smaller companies, the cars are titled in the owner's name, a fact that can add to the confusion surrounding this issue. But company auto insurance designations have more to do with the use of the vehicle than the title owner or even the vehicle make or model. If you are in a small business environment and you have previously carried a personal auto plan and are curious whether you really need more substantial coverage, you should take a look at your company car insurance to help determine whether you might need a commercial policy.

Company Cars Need Special Coverage

There are certainly some large corporations out there in which the insurance scenario is clear cut and easy to surmise. For these businesses, which normally own large fleets of vehicles with the company name emblazoned on the side and a DOT number as well, there is no confusion as to how to properly insure vehicles. These cases are easy to figure out. But across the country, a growing number of small businesses are popping up in both traditional and non traditional forms. Due to the economic environment, some people have been forced to start their own business or simply resort to working as contractors rather than as employees of some other company. For these people, the car insurance scenario can be a real head scratcher if they are in a new and unfamiliar employment or auto use situation.

Generally speaking, company cars need special coverage. This rule holds true for large businesses as well as small. If you have started a construction remodeling company after being laid off by the company you used to work for and you are driving around with a magnetic sign on your pickup truck advertising your DBA name and your cell phone number, you almost certainly need to make accommodations for the business use of your truck by getting some company insurance. It makes no difference whether you own the truck personally or have it titled in your new business name. For one thing, a DBA is essentially synonymous with the owner. In most cases these are single person operations.

But more importantly, your use of that pickup truck determines its need for company car insurance. If you use the truck to drive to homes for estimates or to take yourself, your tools and materials to the job every day, you need a commercial policy accounting for that business use. Failing to adjust your coverage to account for this difference may cause your insurer to void coverage or at least deny a claim if you have an accident or some other situation causes you to make a claim. As the owner of your business, even without any employees or coworkers at all, you are still on company time when you are in that truck driving to jobs or making trips to suppliers to get the things you need to do your work. You have to have proper company car insurance to protect you when you need to file claim.

Reasons for Avoiding Company Policies

In a lot of cases, new business owners simply do not understand the general rules governing proper auto insurance coverage as it pertains to business use. This explains why many single person operations from house cleaners to home day care to remodelers fail to adjust their auto coverage upon opening their businesses. But this is not the only reasons for avoiding a company car policy.

Some business people do it simply for the sake of saving money. The popular perception is that company car insurance is too costly for an up and coming small business to afford. Many entrepreneurs try to cut every possible corner to give them the cash flow they need each month to successfully operate their businesses. There is a certain amount of fair logic to all of this; after all, few small businesses really have the capital they need to compete with bigger, better funded operations to begin with. This puts them at a competitive disadvantage right from the first day they open up their doors to the public. To spend money unnecessarily would mean putting themselves in an even deeper hole.

But the wisdom behind this kind of thinking can only be carried so far. First of all, it is impossible to declare that you cannot afford a company car insurance plan until you have actually gone out and picked up some quotes to see what it would really cost you in comparison to your current personal auto insurance plan. It is easy to make assumptions based on popular rhetoric, but there is a lot to be said for knowing what you are talking about and having a basis for your proclamations.

Second, any analysis of the cost of auto insurance has to also take into account the potential cost savings inherent in any policy in relation to future claims against that policy. If you are a small business owner who really should have commercial insurance, your chances of coming out with a desirable result in the wake of a claim are slim if you stick with a personal insurance plan. By contrast, while a company car insurance plan designed for commercial use may cost you a little more as a business owner at policy inception; you will easily get this extra cost back and then some if you ever have to open a major claim.

Company Plans Offer Better Protection

There are multiple reasons to explain this fact. First and foremost is the fact that your coverage will not be called into question, and you are certain to have the ability to recover needed funds if a major claim arises. Second, the liability limits of commercial plans can be much higher, which is a great advantage over personal policies if you ever get into an accident while hauling heavy equipment or something of that nature and the other driver comes after you for major money. When you start a new business, you must be aware that you instantly become a more visible target for liability issues of all kinds. This is as true of your car coverage as it is any other area of your company's existence.

Another consideration to take note of is the fact that even non traditional businesses have a great need for this type of auto protection. For example, delivery drivers of all kinds who use their own vehicles for their work and who are not covered by a non owned policy carried by the company they make deliveries for really should have a company car policy. Again, a major reason for this is liability, or applicability of coverage. Without the right kind of protection, there is a good chance you might be wasting your money on your premium, because it could be voided and claims denied if you ever need to try to recover funds following a loss. Make a decision for company car insurance based on an understanding of all factors.


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