Whenever you drive in Missouri, you need to carry car insurance. However, the policy you need will likely vary based on your driving characteristics. If you plan to drive for business, rather than strictly for personal needs, you usually must transition to commercial auto insurance. How do you do this? Will your auto insurance rates change because of the nature of your coverage?
Commercial auto insurance is an entirely different realm of coverage from personal auto insurance. Thus, if you need this coverage, do not consider it optional. Think of it as critical protection for you, your vehicle, your business and others.
What Is Commercial Auto Insurance?
Missouri, like most states, requires all registered drivers to carry car insurance. The required coverages are liability insurance and uninsured motorist coverage. Show Me State drivers must obtain at least these amounts of coverage. Of course, expanded auto insurance options often prove much more secure.
Yet, all personal car insurance policies have limits and exclusions. When it comes to business operations, you might find that you do not have coverage. In other words, you might find that if you drive for work tasks, your personal policy won't cover you. Should you have an accident, you might find yourself with no protection.
To have coverage in such scenarios, you'll likely need commercial auto insurance. This coverage will protect both you as the driver. It will also your business's interest in the vehicle. The policy will apply in many commercial situations.
Why Do You Need It?
You might wonder when you might need to use your commercial auto insurance policy. Think about this in terms of the harm that might come to your business if you cause a car wreck.
Let's look at an example. Perhaps you are a realtor and drive frequently to show properties. During these drives, you operate your car in a business capacity. This is not personal use.
Let's say that you hit another vehicle. The other driver sustains personal injuries and damage to their vehicle. They also figure out that you are a realtor. Therefore, they might sue you and your company for some of their losses. Both parties, therefore, could stand to lose out.
This is a prime example of when commercial auto insurance can come into play. Rather than having to settle the damages using your business assets, your commercial auto insurance will often come into play. If you only had a personal auto policy, you might not have had coverage for these losses.
What Will It Cover?
Your commercial auto insurance will look a lot like your personal coverage. Coverage options might include:
- Liability Insurance: All policies will include at least Missouri's required limits. If you are at-fault in a wreck, it will cover you in the event you cause injuries to someone else or damage their vehicle.
- Collision Coverage: In the event you have a wreck, coverage can help you pay for the damage to your own vehicle. You likely won't have to dig into commercial assets to pay for repairs.
- Comprehensive Insurance: Like collision insurance, this coverage will help you pay for damage to your vehicle. However, it will pay for damage arising from incidents unrelated to wrecks. For example, policies frequently cover fire, weather, theft, vandalism and similar damage.
- Uninsured/Underinsured Coverage: The state requires drivers to carry at least uninsured coverage. It will pay for damage to your own vehicle that an uninsured driver causes. The underinsured coverage will come into play if another driver does not have enough liability coverage for your losses.
The policy's limits will usually run higher than standardized, personal coverage. That will provide a better layer of financial protection for business assets.
When Should You Switch Coverage?
When is the time to transition from a personal auto policy to commercial auto coverage? That will depend on when you will start using your vehicle for business.
- Individuals who drive personal cars for business will need to insure their vehicles under commercial auto policies. Keep in mind, simply using your car to drive to and from work likely doesn't warrant this coverage. Neither will running an occasional work errand. Still, other official duties might qualify.
- Those who use a vehicle provided by their business should have commercial auto in place.
You will usually need to switch from personal to commercial coverage immediately upon starting your official driving duties. In fact, you should enroll in coverage before the official start date. That way, you'll never face any unnecessary lapses in coverage.
Generally, coverage enrollment won't prove very hard. To begin, you'll likely need to provide standard information — such as your vehicle type, driver's license information and VIN.
You'll also likely have to provide certain information about your business itself. Both driver and business entity will likely appear as named insured parties. Other potential drivers might need to appear on the policy as well.
If you work for someone — meaning you are not self-employed — discuss the ins and outs of your coverage needs with your employer. Your boss will likely need to work alongside you in determining the right coverage. Therefore, don't hesitate to take an in-depth look at your coverage needs.