AUTO INSURANCE - personal vs. business

Discussion in 'Business Operations' started by GREENITUP, Jul 8, 2005.


    GREENITUP LawnSite Senior Member
    Messages: 275

    I am currently covered with liability insurance for a personal vehicle that I want to exclusively use as a business / work truck very soon. I got a quote for "business auto insurance" from my carrier (Allstate) for like $650/yr.. I currently pay about $150/year for the same coverage under a multi vehicle plan. I am the sole owner/operator of a LLC - thus taxed as a sole proprietor. If I'm the only driver, can I just keep the same policy or do the rules change once you put a sign on the side of the truck? Anyone been in this situation? Thanks :confused:
  2. shepoutside

    shepoutside LawnSite Bronze Member
    Messages: 1,208

    Yup, this is why most around here, do not put signs on. The MTO, around here will also pull trucks with signs over for inspections too. Welcome to the business world. I run commercial insurance, which runs me about 20 % More.
  3. Team Gopher

    Team Gopher LawnSite Platinum Member
    from -
    Messages: 4,040

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    Talk with your insurance people to make sure as far as I understand, if you use your personal vehicle for commercial purposes, they can deny you coverage.

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  4. HK45Mark23

    HK45Mark23 LawnSite Member
    Messages: 200

    Well some of what you said is confusing. First your coverage for business auto insurance is much different. I was a licensed insurance agent for a few years.

    Last year when I went to get business auto insurance I had regular auto insurance on the van. It was almost $700.00 a year. I think it was $40,000.00 liability and $10,000.00 medical up to $20,000 per incident.

    My business insurance is 1 million liability $500,000.00 medical $250,000.00 comp. I may be off on the medical and comp but I know it was 1 million liability and 500,000.00 but I can’t remember at this moment with out getting the policy out exactly what the break down was.

    Any way I only played $550.00 a year for that business coverage. It was cheaper and a lot and I mean a lot more coverage.

    I bet if you compare the actual coverage of your business insurance that it is much more coverage.

    I don’t think you are doing an apple to apples comparison.

    There are different laws as to the type of coverage a business vehicle must carry. But they are not priced even close to the same as an individual’s insurance. Really you get hundreds of times more coverage, multiple drivers and less cost per unit of coverage with commercial auto coverage.

    Most commercial contracts require you to carry coverage and one I bid on the required coverage was 2 times what I already carried. My total workman’s comp and liability and auto insurance last year for a janitorial and landscape maintenance yard care company was around $1,800.00

    If any one desires I will pull out the policy and show the breakdown and pricing for the coverage I have. Yes I know that different states have different insurance laws and different coverage’s. Most insurance coverage is close to the same in different states.

    All the insurance commissioners meet and discuss the industry and keep every thing about the same. There are just some miner law differences.

    Oh and also your tax consequences and sole proprietorship has nothing to do with you insurance. Maybe some differences if you know you will not be having any employee drivers but they expect that even if you say that there will not be any other drivers that there will be and the price is not any different, it is a business and expected. If you are to have an employee who will be driving you just call and give them his information and that is it. There is not a change in premium.

    GREENITUP LawnSite Senior Member
    Messages: 275

    Sorry I wasn't very clear on a few things. All of my personal vehicles (3) are paid for and I only carry liability insurance on each @ $100,000 property, $300,000 personal, & $150,000 per occurrence. The quote I got was for the same dollar coverage on one of these vehicles currently covered. I will be the only driver. I only mention the tax implication because as a single member LLC - there is (normally) no segregation between the member and the entity for tax reporting.... so I thought maybe there may not be a segregation for auto liability insurance purposes either. I pay $148/ yr to drive this truck now - $650 for the same truck with the same driver doesn't sound right to me.
  6. Critical Care

    Critical Care LawnSite Bronze Member
    Messages: 1,654

    Hey, Greenitup, I was told exactly what Team Gopher said. In some cases you could probably slip under the radar with personal auto insurance when using a vehicle for business, but when you stick that sign on your truck and start running around with a lot of landscape equipment you've pretty well told everyone you're open for business.

    I maintain personal auto with Allstate, but changed to another company for my business auto. I got a much better rate at $370 for $500,000 liability. I've also added on some comp and collision coverage that I wanted.

    Bottom line, get the business auto, but shop around because you can get more for less.

    GREENITUP LawnSite Senior Member
    Messages: 275

    Thanks Critical.... I will do just that. :drinkup:

    GREENITUP LawnSite Senior Member
    Messages: 275

    I got a much better rate at $370 for $500,000 liability.....

  9. DLS1

    DLS1 LawnSite Bronze Member
    Messages: 1,619

    Maybe I missed it but are you part-time or full-time. I am part-time and I have the truck under regular auto insurance. I can put a magnetic business sign on the truck and do not need commercial insurance. If I put a permanent sign on the truck then it is considered commercial.
  10. Critical Care

    Critical Care LawnSite Bronze Member
    Messages: 1,654

    DLS1, where did you hear that? Your telling me that if you have magnetic business signs on your truck, and work less than 40 hours per week, then you're safe to go with personal auto? Maybe I better point that out to my insurance carrier, and my previous one who warned me.

    If I totaled up all of my billable work hours per week, most of the time they wouldn't come close to forty hours. So, I wonder if this same rule applies to paying taxes? You know, claim to the IRS we're not in business since we're only part time?

    Greenitup... I sent you a PM.

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