Business Car Insurance - I Had No Idea

How many of you have business car insurance as a small business owner? A gentleman I met at a networking even last week told me about how he had a minor ding when he was on the way to meet a client of his and that his insurance company isn't paying out because his personal insurance policy doesn't cover him for journeys like that.

I had no idea this was the case so did some research and sure enough this seems to be common practice. This page was quite informative: http://www.keithmichaels.co.uk/business-vehicle-insurance/business-car-insurance-explained/

So I've now got to add business car insurance to my ever expanding costs. Did anyone else know this was the case? I feel there's a sever lack of education by insurance companies and the government when it comes to this subject!

 

I've never heard of this. It's time for me to check with my insurance company ASAP to make sure I'm covered.

 

I started poking around on some U.S. sites and it seems like it is the same situation here. Did not realize this was a potential issue. Thanks.

 

The auto insurance industry has come up with lots of escape clauses over the years to help them avoid having to pay a claim. The business clause is pretty straight forward but many people are also not aware you can get coverage called pleasure driving which is really designed for people with cars they rarely use, for example an old Cuda that you drive on weekends for fun. If you decide one day to drive that car to work and have an accident the insurance company could claim that is was not a pleasure drive but a work related drive. My point is take the 5 minutes and actually read thru all the details of your policy.

 

The more research I do into the subject of insurance, whether it's home, car, business etc the more faith I lose in insurance companies and the whole convoluted process. I agree with what you are saying, ultimate responsibility lies with the policy holder BUT I still think more should be done to raise awareness of this fact. I can tell you I was driving around uninsured but it wasnt malicious.

However, I guess we can be thankful for small mercies that we don't live in the US. Sarah that sounds ridiculous! What a minefield!

 

The United States is a litigious society, that is for sure. But insurance has been moving more toward charging for risk-based activities. If you have a party and serve alcohol and an intoxicated guest crashes his car, you are legally liable, meaning your insurance company will have to pay. Likewise, if you have a dog there is the risk of your dog biting someone which can trigger an insurance claim or lawsuit. Someone with no dog has no such risk and should not pay for the risk coverage they do not need. If you think about it, it does make sense. Those of higher risk pay more, those of lower risk pay less.

I remember I had to argue with my old insurance company one time because if you work 10 miles away from home and drive to work you get charged a higher rate. I actually worked 9.8 miles from home, just under the 10 mile limit. I did win that one and paid the lower rate.

Some insurance companies now offer discounts based on safe driving if you are willing to plug a device into your car's diagnostic system so your speed and possibly other things can be recorded. The program is voluntary. People who drive safe, drive slow, will pay lower rates.

http://www.kiplinger.com/article/ca...ing-technology-can-help-lower-your-car-i.html
http://www.forbes.com/sites/adamtan...oney-on-car-insurance-but-some-will-pay-more/

I know of a bad driver who has smashed up every car he had just about over the past 20 years. I knew of two people who smashed into parked cars because they were going around a corner too fast. Under the normal system, everybody pays for that reckless behavior.

 

It really makes sense to charge for insurance based upon an individual's risk profile and actual results when it comes to driving. That model breaks down a bit, however, when it comes to healthcare insurance. For example, I think that it is fine that a smoker be charged more than a non-smoker. However, I do not feel the same way about someone who has been diagnosed with a chronic illness (diabetes, e.g.) being charged more in anticipation of higher assumed costs. Insurance is about spreading risk, after all.

 

How would these companies know if you were doing anything business related if you didn't tell them? Unless you were wearing a suit and tie carrying a briefcase, there's no way the other party would know if you were picking up a client.

 

It is a very slippery slope with predicting and/or preventing disease vis-à-vis insurance rates. Should a person stricken with cancer be punished because they did not eat enough anti-oxidants as recommended by nutrition experts? Should insurance companies be able to look at your DNA to see what problems your parents may have given you due to the fact that your father worked in a nuclear power plant? If someone was charged higher rates because he drank a glass of wine every night back in the 1980's when that was a BIG no-no, now get a refund because it has been determined that a single glass of wine extends the average lifespan?

I am comfortable with speeding tickets and accident reports helping to determine insurance rates. Illnesses, potential disease preventive measures, etc., are simply too squishy for me to want them used in mathematical equations determining risk.

 

You're absolutely right: it is all about drawing the line and the insurance companies would undoubtedly prefer that we spend 12 hours per day chronicling all of our activities and decisions so that they could better understand our personal risk profile and, primarily, jack up our rates because of any bad choices that they think we are making.

 

Hey, I am also a small business owner and started my business with a business insurance company. I have never heard of this, and now its time to check all the concerns of insurance.