Business Or Commercial Use
Business or commercial use designates whether a policy is intended for a business vehicle or a vehicle that's primarily driven for pleasure. Insurance companies will usually ask whether a car is primarily driven for business reasons or for pleasure before generating a car insurance quote. Business car insurance is intended only for vehicles that meet all of the criteria of commercial use, which is to say that the vehicle is owned by the policy holder's company or that the vehicle is almost exclusively used for business travel. Cars or trucks that are used to commute to or from work do not qualify as commercial use vehicles.
Car insurance for business or commercial use is usually more expensive than a private car insurance policy, although the insurance premiums of a commercial policy are usually tax deductible. There are several reasons for the higher-than-average premiums. First of all, business vehicles are driven more frequently than strictly for-pleasure vehicles. Most are used on a daily basis, which greatly increases the risk of an accident regardless of the record of the driver. Business or commercial use vehicles are also usually driven by multiple drivers, including any employees of the business, and this can drive up insurance rates. Finally, a business car insurance policy often covers more potential damage and more complex circumstances than a standard car insurance policy, and the policy's benefits pay for damages to the vehicle, to the driver, and to anything inside the vehicle. An average business car insurance claim tends to be higher than an average for-pleasure car insurance claim.
Businesses can decrease the cost of their car insurance policies by looking into discount programs designed specifically for commercial vehicles. Many insurance providers offer special fleet car insurance for businesses with multiple vehicles. Fleet car insurance can cost much less than standard car insurance on a per-vehicle basis. Businesses can also lower the cost of their commercial car insurance policies by comparing insurance quotes or using the services of an insurance agent to decrease their costs.
Some for-pleasure drivers look for ways to turn their car insurance policies into business or commercial use car insurance policies for tax deductions. As long as a vehicle is exclusively used for business and not just commuting, there's a good chance that it qualifies as a commercial use vehicle. Drivers who are unsure of whether their vehicles are primarily used for pleasure or for business should discuss the matter with a licensed car insurance agent or a representative of a car insurance company for more information. Selecting the correct type of car insurance is an important step in buying a policy.