There are not many people that would argue that business use is different than personal use. The thing that most people struggle with is the difference between the two. Being that car insurance is a very important aspect in our lives; we need to know what constitutes business use and what determines personal use.
Liability is the first distinct difference. In a personal policy, you are liable for yourself and any other driver in your household. On a business policy, you are liable for yourself and every employee that is able to drive. The difference between the two in this case is the fact that most people trust their family more. Moreover, your family has you best interest in mind where employees do not. Most business choose to pull the persons driving record before hiring them in the case they will need to drive. Adding a person with a bad driving record will increase your rates significantly.
Business insurance versus personal car insurance varies by what you are going to be using your vehicle for. An example of business use would be transmitting items or hauling items to a different location that you would not be doing personally. In fact, this is business activity. There are business polices that directly deal with this type of situation; thereby making it more flexible of a policy.
Keeping track of gas and miles seems like a daunting task, however, it is a business necessity. It is very important that you distinguish which miles were used for personal use and which were used for business use. This helps on all fronts and is often tracked using a computer based model.
Some people feel their use for business reasons does not weigh in enough to matter. In these cases, a personal policy is appropriate and they need to work that out with the insurer. A personal policy is often times less expensive than a business policy; however, the personal car insurance policy will go up. This is because you have increased risk because it is being used more. In any case, it is extremely important that you inform them as soon as possible. Failure to do so will forfeit your chances at a claim if they find it was for business use.
As stated above, you rate will increase because your usage has increased. Understand the usage for business is anything that is defined out of your daily use. In other words, driving to a conference is business use. This even applies if they reimburse you for miles and gas. If you transport goods or deliver items, you are using your personal vehicle for business use and it has to be documented. Sometimes we do not view things as business use because we consistently do them without even thinking. . Always keep everything in check because there are certain ramifications for not complying.
Whichever road you find yourself on, do not be caught without appropriate coverage. There are many different ways you can get the best deal for your situation so it is advised to talk with a car insurance agent.
Graham McKenzie is the content syndication coordinator for Carinsurancesa.co.za. South Arica?s leading Car Insurance portal, which helps people save on their Car Insurance.
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