Commercial auto insurance?
Question by Don’t Tase Me Bro: Commercial auto insurance?
I am a plumber and I have recently decided to work for myself and have formed an LLC. I am gettting conflicted opinions from different insurance agents on the nature of my auto insurance. I have a personal pick up truck which I will be using for the business.
Should I put my truck in the LLC and get a commercial insurance policy, OR, can I leave it on my personal insurance and get a business rider on it.
Also I guess, give me the accounting pro’s and con’s of each way IF YOU KNOW.
Please do not randomly answer unless you know what your talking about,
Best answer:
Answer by Jeff
Here are some general Q&As for you to consider:
• How do companies determine “commercial use”? One definition could include “engaging in transporting goods for compensation or a fee,” which includes pizza or newspaper delivery, catering, door-to-door consulting services, landscaping or snowplowing services, logging business, day care/church van services or farm-to-market delivery. People who do these kinds of work should consider purchasing a commercial vehicle policy.
• Do you need more liability coverage than a personal auto policy provides? Generally, a commercial auto policy offers higher limits of liability, but less or no coverage in areas that are typically not associated with commercial auto risks.
• Do you need special coverage for situations encountered while conducting business? Commercial auto policies usually offer these coverages, and they’re normally not available with personal auto policies. These include hired and nonowned auto coverage and coverage for towing a trailer for business use.
• Do you need to list any employees as drivers? Commercial auto policies allow you to list anyone that you employ. You don’t have that option with a personal auto policy. In general, you’ll need commercial auto coverage if the vehicle you use is owned by a corporate partnership or driven by employees, or if it’s used to haul tools or equipment weighing more than 500 pounds, make deliveries or heavy enough to require state or federal filings.
What do you think? Answer below!
August 1st, 2010 at 4:55 am
You can do either, assuming you don’t have a loan on that truck.
Part of it, will be asking yourself, what’s the GOAL.
Here’s the personal auto bit: You can classify it as business use, pay a slightly higher rate. You keep the truck in your name, and that makes it a PERSONAL asset, so if your business gets sued, they can’t take that truck.
Here’s the commercial auto bit: IF you put it in the name of the corporation, you can buy a business policy on it, as long as you have no youthful drivers, using a “service” class. Business auto policies aren’t surchargable if you have tickets or accidents, BUT, they also won’t extend any personal auto liability coverage to YOU, like a personal auto policy would. The truck becomes a business asset.
The coverages are different, between a personal auto policy and a commercial auto policy. Also, the COST of a commercial, service use policy is going to be HIGHER than a personal, business use policy. If you’re not incorporated, your accountant can give you the tax details, but I don’t think it will matter much.
The biggest thing is if you have a loan on your truck or not. If it’s not paid for, you will NOT be able to transfer ownership to your corporation, and if it’s not titled to the corp, you won’t be able to put a commercial auto policy on it. And if your driving record is less than perfect, OR, you’re under 25, you might have a hard time finding a company willing to GIVE you a business auto policy on the truck.
August 1st, 2010 at 5:43 am
Try this site
insuranceq.notlong.com
Here you can compare quotes from different companies