Many people have turned to home based businesses in order to bring in some extra money or as a full time way to support a family. When this happens, there are many things that are needed in order to keep the business afloat such as good equipment and renter’s or homeowner’s insurance. One question that many home based business owners wonder is if they should have commercial auto insurance. This is a valid question because a vehicle is always a part of the home and is used on a regular basis.
What is Commercial Auto Insurance?
Commercial auto insurance offers a higher amount of coverage because of the nature of using a car for business purposes. When driving a vehicle for business, a client may be picked up and if there is an accident, you want to make sure that there is enough coverage to take care of any doctor or hospital bill. With personal insurance, the coverage is not as high which can leave you getting sued and losing everything if there were an accident. It also covers any employees or other family members who may be driving the car for business purposes.
Business Driving Versus Personal Driving and Why It’s Important to Know the Difference
Any time you drive your vehicle for business reasons such as picking up office supplies or when driving to a meeting with a client, this would be considered business driving. If you are just picking up some groceries for the week this is considered personal driving. The reason this is important is because you are insured at a certain rate for a certain type of driving. Insurance companies take exception to paying out claims when the real reason for travel is incorrect. This is why having commercial auto insurance can be important for those who operate a home based business.
Do You Need Commercial Insurance for Your Home Bases Business?
If you ever do any driving for business reasons then yes, you should have commercial insurance. However, not all home based businesses rely on driving to meet clients or even picking up office supplies as mentioned above. You can always have your supplies shipped or delivered so if this would be the only driving that you do then you certainly do not need commercial insurance. However, as explained above, if you ever drive your vehicle for a business purpose just once and if you have an accident during that drive, your insurance company can refuse coverage.
While not all home based businesses do not need commercial auto insurance, it is not that much more expensive than personal auto coverage so it make sense to have it just in case. The cost of not having it is much higher than simply paying the extra money rather than getting sued if your insurance company denies your claim. Take the time to look over the policy before paying anything to ensure that you are covered for any situation and you won’t have any worries.