Are you starting a business in Washington State and wondering when you need to put your car insurance under your business name? The truth is that if you’re conducting business in a vehicle that used to be your personal car, you should probably switch your personal car insurance to commercial car insurance that’s in your company name, but let’s take a look at personal and commercial use of a vehicle and how you know that you need to switch your coverage.
What is a personal vehicle for insurance purposes?
The owners of personal vehicles use them to get to and from work and to run personal errands, like going to the bank, paying bills, and shopping. They may even drive them to go on vacation and take the kids to school and extracurricular activities. If this is how you drive your vehicle, then it makes the most sense to get a personal car insurance policy in your name.
What is a commercial vehicle for insurance purposes?
Commercial vehicles are used for work purposes. If you’re picking up packages and delivering them in your personal vehicle, you are performing business functions in your car, truck or van. If you transport passengers or perform any service in your vehicle for compensation, it’s considered business use. If you drive to a work location and then commute to another business location or to a client’s location, the time spent traveling from the business to the second location is considered business use of the vehicle. Additionally, if you lease or rent your vehicle to someone else, that’s considered business use, and it may be time to convert your personal auto insurance policy to a commercial auto insurance policy that’s in your business name. You can also have a business rating on the personal auto policy. This would be designed for outside sales or a realtor.
How do I know if I’ve crossed the line between personal and business use of my car?
When you’re a small business owner or just starting a small business in Washington, it can be difficult to know when you’ve crossed the line from personal to commercial use of your car. If you’re just running deposits to your bank a couple of times a week, you might be all right with your personal car insurance, but if you’re visiting clients, traveling between locations, and/or delivering goods or performing services, you may need a commercial car insurance policy in your company name. If you have signage on the vehicle or have employees use your vehicle, then you need a commercial policy.
What does a commercial car insurance policy cover, and how is it different than a personal car insurance policy?
Personal and commercial car insurance policies are both designed to financially protect you if your vehicle were to become involved in an accident or experience damage due to weather, falling objects or vandalism. However, these policies are underwritten differently based on how the vehicle is used.
Personal Car Insurance Policies in Washington
Drivers are required to have liability auto insurance in the amounts of:
- $25,000 for injuries to a single person
- $50,000 for bodily injuries to several people
- $10,000 for the repair or replacement of someone else’s damaged property
In addition to liability insurance, drivers can add collision, comprehensive and umbrella. Drivers can even get gap insurance, roadside assistance and rental car assistance to help ensure that they are fully covered in the event of an accident.
Personal car insurance policies are designed to protect drivers who are not using their vehicles as part of a business or to directly earn money. In fact, insurance companies often put exclusions in the policy that prohibit coverage if the vehicle gets into an accident while being operated for business purposes. This means that if you are using your vehicle for business purposes, you should consider getting a commercial car insurance policy.
Commercial Car Insurance Policies in Washington
Commercial car insurance policies have the same coverage types as personal car insurance policies, including liability, collision, comprehensive, gap and roadside assistance. Commercial businesses can add non-owned auto coverage and hired auto coverage, and trailer coverage for their vehicles. The required coverage limits are also the same as with personal car insurance, so you might be wondering just how they differ.
Commercial car insurance policies take into account the unique risks that commercial drivers face, and one of those risks is more hours on the road. For example, did you know that long-haul truckers average more than 100,000 miles on the road each year? Local truck drivers only average between 50,000 and 80,000 miles a year, but that’s still between three and five times the number of miles driven by the average American driver, which is 14,489 miles per year or 10,949 for the drivers in Washington State.
Who should I contact in Washington State if I think I need a commercial car insurance policy in my company name?
If you think you need to get a commercial car insurance policy in your business name, you should contact our agents at Boyd Insurance Brokerage Inc. We can talk to you about your changing car insurance needs in order to determine if it’s time to switch your personal auto insurance policy to a commercial one. We also offer other types of business insurance that can help protect you against certain losses, even if you’re just starting your company. We can provide you with business liability insurance, and we offer specific insurance bundles for certain industries, like farms, restaurants, contractors and publishers.
To learn more about when you need commercial car insurance and to get a quote, give us a call at 509-340-2693.
