Zielonka Financial Services LLC

(888) 967-1040

Insurance Read Time: 3 min

When Does Your Personal Car Become a Commercial Vehicle?

For small business owners, the line between the personal and their business can be a bit hazy at times.  Yet, when it comes to a vehicle that may be used for personal and business-related reasons, it’s important to know how your auto insurer is expected to define what constitutes commercial use.

If you own a car and cover it under a personal auto insurance policy, an insurance company may not pay claims for any damages you incur if the insurance company deems that it was used as a commercial vehicle. For example, if your car is used for rideshare purposes, it may be considered a commercial vehicle when it’s in use.

Not being on the same page with your insurance carrier may result in financial losses, so it pays to ask yourself important questions about your vehicle’s use in order to select the right policy for your car.1

The key distinction for determining if a personally owned car may need commercial auto insurance coverage is whether the vehicle is used for any business-related purpose.

Defining Business-Related Purpose

Your auto may be defined as a commercial vehicle if you use your vehicle to:

  • pick up or deliver any goods,
  • provide a service for a fee,
  • travel to a remote work location or between work locations, or
  • visit client locations.

Additional conditions under which your car may be defined as a commercial vehicle include:

  • the owner named on the vehicle title is a business—incorporated, unincorporated or LLC,
  • the vehicle is rented or leased by others,
  • the vehicle is equipped with a snow plow, has an altered suspension system or other equipment or modification, or
  • the vehicle is driven by you or your employees for both business and personal use on a consistent basis.

If you use your personal vehicle for business reasons only occasionally, it may be covered under your personal policy, but you may need to indicate that on your application for auto insurance.

The wisest course of action is to describe how you expect to use your vehicle for personal and business purposes and let your insurance agent guide you to the most appropriate policy for your situation.

  1. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Share |
 

Related Content

The Most Overlooked Item of Any Home Improvement

The Most Overlooked Item of Any Home Improvement

The item most homeowners forget on their home improvement project checklist is insurance.

The 12 Steps to Living Confidently: Define Your Life Goals

The 12 Steps to Living Confidently: Define Your Life Goals

It’s that time again. A clean slate. Time for a do-over. For those who seize the spirit of change, there’s a “new you” ahead. Perhaps a slimmer you.

The Importance of Beneficiary Designations

The Importance of Beneficiary Designations

Beneficiary designations allow assets to pass directly to whomever you designate thus by-passing the costs and time involved with the probate process.

 

Have A Question About This Topic?







Thank you! Oops!

Revising Estate Strategy Assumptions

Estate tax exemptions rules appear to be stabilizing, prompting many to reconsider conventional estate strategies.

The Investment Risk No One’s Ever Heard Of

You face a risk for which the market does not compensate you, that can not be easily reduced through diversification.

Orchestrating Your Retirement Accounts

Getting the instruments of your retirement to work in concert may go far in realizing the retirement you imagine.

View all articles

Social Security Taxes

Estimate how much of your Social Security benefit may be considered taxable.

Comparing Mortgage Terms

Estimate the total cost in today's dollars of various mortgage alternatives.

How Compound Interest Works

Use this calculator to better see the potential impact of compound interest on an asset.

View all calculators

Principles of Preserving Wealth

How federal estate taxes work, plus estate management documents and tactics.

5 Smart Investing Strategies

There are some smart strategies that may help you pursue your investment objectives

An Inside Look at Retirement Living

A number of questions and concerns need to be addressed to help you better prepare for retirement living.

View all presentations

Safeguard Your Digital Estate

If you died, what would happen to your email archives, social profiles and online accounts?

Don’t Myth Out on Whole Life

Whole life insurance can help protect what matters most: your family, your assets, and your legacy.

Jane Bond: Scaling the Ladder

Agent Jane Bond is on the case, uncovering the mystery of bond laddering.

View all videos