Closeup portrait happy, smiling, attractive woman, buyer sitting in her new white car showing keys isolated outdoors street dealership lot background. Personal transportation, auto purchase concept

 

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.

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 it 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.

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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
  • 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.

 

 

This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of  The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

 

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

 

The Retirement Group is a Registered Investment Advisor not affiliated with FSC Securities and may be reached at www.theretirementgroup.com.


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