How to Get Insurance for a Car Used for Business

Setting up your business, whether from home or from a commercial location, requires an adjustment in your frame of mind. You must start thinking about your financial situation from an entrepreneur's state of mind, and this includes insurance. For example, you might need to insure a car for business use.

Is a commercial insurance policy really necessary?

Sometimes insuring a car for business use isn't necessary. According to Insure.com, you only need a commercial car insurance policy if you are transporting clients and/or employees on a regular basis, if your employees use the vehicle, or if you transport expensive equipment or merchandise regularly.

For example, if you run a landscaping business, you will probably use your vehicle to haul lawn mowers, weed-eaters, and other equipment, as well as plants, flowers, sod, dirt, rocks and other materials. And maybe your employees will drive the vehicle to job sites occasionally. In this case, insuring your car for business use will be necessary.

Do you need a separate policy for items?

A commercial auto insurance policy covers the vehicle itself. However, it won't cover items you have in the car unless specifically included in the policy. If you're transporting expensive items, it's best to insure those items separately to ensure you are covered.

The exception is equipment permanently attached to a commercial vehicle. A tool box welded to the vehicle or a generator permanently attached will need to be covered by the car's policy. When insuring a car for business use, make sure to mention these "extras" so they are included.

How much will your premiums increase?

This depends on a variety of factors. In some cases, your insurance rates won't increase very much, while in others you'll pay thousands more per year. The number of miles you drive on a regular basis and the number of people with access to your vehicle will play a large part in determining your premium.

When insuring a car for business use, simply tell your agent how you use your vehicle. Where do you drive? Under what circumstances? Be as honest as possible so your agent can come up with an accurate figure that reflects what you truly need.

Remember that a commercial car insurance policy is designed to protect you. Trying to cut corners may result in inadequate protection when you need a claim covered.

Who is covered?

Make sure you tell your agent who will drive your commercial vehicle. You will want employees and family members to be covered if they use it, but the insurance company may deny any claim when someone else was driving if they weren't informed of it beforehand.