Business Car or Personal Car

I was recently asked about the issues with insuring a personal vehicle on a business auto policy. Here’s what I said:

The name on the title/lease should be the name on the insurance policy.

A personal auto policy is for a person.

A business auto policy is for a business (corp, LLC, partnership…).

Messing with any of the above is asking for insurance trouble.

Two issues – Coverage and Pricing:

Coverage — Your personal auto policy allows you to use your personal vehicle in the conduct of your business – unless you are racing or a taxi service. Ride-sharing / car-pooling is not a taxi service.

Underwriting / Pricing — Personal auto policy premiums are partially based on usage – personal use, commuting, business use. I drive 10,000 miles a year – about 3,500 of which is business use. My policy is rated for personal use – I told my agent how much I drive for business and he rated the policy as personal use. Some would rate this as business use.