Commercial Auto Policy

Does your job constitute your needing a Commercial Auto Policy? (Image via Can ‘o’ Rye on Flickr)

Do you need a Commercial Auto Policy? This is a question many small business owners ask themselves, their friends, and hopefully their insurance agents.  There is a common misconception that your personal auto policy will cover any losses incurred while driving for the business if you are driving your personal automobile which is covered under your personal auto policy.  This makes a certain kind of sense on the surface.  In essence, you are buying two insurance policies to cover the same exact circumstance, you, driving your car.

Commercial vs. Personal

The main difference between the two types of coverage is how you are using the car.  If you are only using it to drive your family around or to commute to your job, you only need a personal auto policy.  This is true in almost every case, although there are some circumstances where the type of vehicle you own may require you to purchase a commercial auto policy regardless of whether or not you are using it for commercial purposes.  If, however, you are using your vehicle for business activities, you likely need some type of commercial coverage since the majority of personal auto policies exclude losses resulting from business activity.

What Constitutes Business Activity?

This can be a complex question, especially for small business owners.  If you drive your son to school on the way to an appointment with a client, it isn’t always clear which part of the trip is business from an insurance coverage perspective.  The best way to understand what is business activity and what is not is to ask your insurance agent.  If in doubt, assume that anything related to your business requires commercial coverage.

There are some things you can ask yourself that may help you determine if the driving you do would fall under commercial or business activity.

  • Do you deliver anything to customers or clients using your car?  Things like pizza, newspapers, Avon, or any other product that you put in your car and then transport for delivery can be considered commercial activity.
  • Who is driving the vehicle?  If you allow employees or contract workers to drive the car for business purposes, this won’t usually be covered by your personal policy.  Even if you are the only driver, there is a good chance that commercial coverage will be required.
  • Who is riding in the vehicle? If you are using the vehicle to transport other people and getting paid for it, you absolutely need commercial coverage.
  • What percentage of use is personal and what percentage is commercial?  Although this doesn’t always factor into coverage determinations, some insurance companies require commercial coverage if the vehicle is being used primarily for business use.  Check with your agent to see if this applies to your coverage.

The bottom line is that most small businesses cannot afford to take the chance that they have an accident or become liable for damage caused by their car that their personal auto policy carrier refuses to cover.  If there is a question in your mind about whether or not you need to purchase a commercial auto policy, the odds are that you do and you should contact your insurance agent as soon as possible.

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Motorcycle Insurance

Are you properly insured while you’re riding your motorcycle? (image via gullevek on Flickr)

Beautiful weather just begs for an afternoon spent on a motorcycle, enjoying the open road and the gorgeous scenery.   There is nothing quite like a long ride in the desert; few things can rival the feeling of freedom offered by the wind on your face and the wide open spaces of the Southwest.  Protecting that freedom and your future requires the right kind of insurance.  Motorcycle insurance will protect you and your bike.

What Kinds of Bikes are Covered?

Most major insurers cover any factory-built motorcycle that can be licensed for use on public roadways.  This includes custom bikes, classic motorcycles, motor scooters, minibikes and trail/dirt bikes.

How is Motorcycle Coverage Different than Auto Insurance

Generally speaking, insurance is insurance. Where things differ is in the types of coverage a specific policy provides.  There are many similarities between an auto policy and a motorcycle policy, but there are some coverage’s available for bikes that you don’t need for cars, like safety apparel coverage.

Types of Coverage

Like the insurance policies you may have in place for your home and car, motorcycle insurance comes with different kinds of coverage.  The key to putting the right policy in place is finding one that offers the coverage you need.  The following types of coverage are commonly included or available for motorcycle policies:

  • Liability Coverage – Similar to the liability coverage you carry on your car, this coverage protects you if you are in an accident or cause damage for which you are found liable. It covers bodily injury and property damage to someone else’s person or property.  It may also include a small amount of coverage to pay medical payments for yourself or a passenger.  Depending on your state, you may be required to carry liability insurance for your motorcycle just like you would for a car.  Policies come with a variety of liability limits.
  • Collision Coverage – Just like an auto policy, collision coverage pays for damage to your motorcycle that is caused by you colliding with something or by someone or something else colliding with your motorcycle.
  • Comprehensive Coverage – This fills the gaps left if you only have collision coverage and pays for damages caused to your motorcycle by things other than collisions like fire, theft, or vandalism.
  • Uninsured/Underinsured Motorist Coverage – This type of coverage pays for those things that the other driver’s insurance would pay for if you are in an accident caused by another driver who does not have their own insurance.
  • Accessory Coverage/Safety Apparel Coverage – This covers customized parts, special equipment, paint, helmets and safety apparel, and may provide coverage for travel interruptions.  Damage to these items is generally covered but loss resulting from theft may not be so check with your carrier to make sure.
  • Towing and Roadside Assistance – This provides access to roadside assistance resources if your motorcycle breaks down and provides for a specific amount of towing.
  • Gap Coverage – This type of coverage only makes sense if you have a loan on your motorcycle.  If you are in an accident or experience a loss that totals your bike, gap coverage will pay the difference between the amount you owe on your bike and the actual value provided by the insurance company.  Purchasing this coverage insures you won’t ever owe on a bike that is totaled.

Most auto policies don’t cover motorcycles without a special endorsement that adds motorcycle coverage.  Don’t assume yours does. Check with your agent and make sure you have the coverage you need.

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