Does Your Vehicle Insurance Cover Business Use?

Does your insurance policy properly cover you? If you're using your vehicle for your small business, deliveries, or to tote certain materials, you may want to double check.

Some jobs change the way you use your vehicle-and could change the type of insurance policy you need.

Phyllis Long, insurance agent at Rhodecon Insurance of Poplar Bluff, Missouri, said she asks her customers how they will be using their vehicles to determine what kind of policy they need. "If they are using the vehicle to drive back and forth to work or school, they probably need a personal auto policy," she said. "But if they are a real estate agent or use their vehicle to tow farm equipment, generally they need a commercial policy."

Commercial policies differ from personal auto policies, providing more coverage in some areas, and less in others. Generally, a commercial policy provides higher limits of liability, but less or no coverage in areas like rental reimbursement that are typically not associated with commercial auto risks.

A commercial auto policy may also provide coverage for trailers or items permanently attached to your vehicle that would not be covered under a personal auto policy. For instance, if you are a landscaper, and are at fault in an accident where your trailer swings and hits another vehicle, your commercial auto liability coverage would cover the damage done by your trailer to the other vehicle. If you had your vehicle insured under a personal auto policy, your liability coverage may not cover the damage done by the trailer, because the trailer is being used for commercial purposes.

Long has a simple rule-of-thumb: "If someone has told you to go out and use your vehicle for your job-you'll need commercial coverage. If your boss asks you to deliver a pizza-you need a commercial policy."

Jo Farris, vice president of Clay and Land Insurance, Inc. adds, "When a customer mentions he's a carpenter and needs to show a certificate of insurance before he drives on a job site, that's a big red flag that he may need a commercial policy. If he's just driving to the site to get to work, a personal policy may provide proper coverage. But if he's hauling supplies onto a job site, chances are, he'll need to have a commercial policy."

If you use your vehicle for any of the following purposes, you may need a commercial auto policy, or business use coverage:

• Delivery (pizza; newspaper)

• Catering

• Door-to-door consulting service, such as cosmetics sales

• Landscaping service

• Snowplowing service

• Logging business

• Day care/church retreat van service

• Farm-to-market delivery

Check out to find an independent insurance agent who can help.

Commercial auto insurance isn't just for big trucks.

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