By Steven M. Ladd
The Horan Companies
Owning a vehicle is pretty common nowadays. We use our cars to run errands, pick up the kids, for leisure, or to drive to and from work. But what happens when work isn’t in the same place every day or even every hour? What kind of impact does that have on your car insurance? Does it matter?
It does matter.
When a vehicle is insured, its usage is classed in one of three ways: Pleasure, Commute or Business. Pleasure means that the car is for incidental use with no specific daily routine. Commute means that you are making the same round trip, to school or work for example, multiple days per week. Business use is perhaps the most confusing classification. It is not as straightforward as the others.
Business use is still considered part of your personal auto policy. It comes into play when you are using your car for work-related purposes, but not driving to the same place and back. You might be driving to different locations for appointments, such as a Realtor or a salesperson would. Business use generally assumes that no one is being driven in the vehicle with you and that you are not making deliveries. Business use should not be confused with commercial auto insurance. If you have a pick-up truck that you are using to tow equipment, or it has a graphic that promotes your landscaping business, you’d be better suited for a commercial auto policy.
A commercial auto policy does not mean that the truck needs to be registered with the DMV any differently. You simply remove it from the personal policy and set up a more protective commercial one. It protects better because rather than a personal car that is not supposed to be used for your business, a commercial auto policy allows you to use the vehicle for personal use. Additionally, the liability protection you’d have if you were involved in an accident would be much more secure. Should your insurance company find out that the accident occurred while the vehicle was in the act of transporting equipment, it could result in a denial of the claim.
Since the price you pay for your insurance is based in part on how the vehicle is used, an inaccurate class can end up costing you money. You might be paying more than you should, or not enough. So depending on the kind of business you are doing, and how often you are doing it, it’s very important that this be done right. If your routine has changed since you began your policy, contact your agent and update your account.
Steven M. Ladd is an insurance agent with Horan Companies, Inc. He can be reached at (315) 635-2095 or [email protected].
