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Car Insurance for a Company Car

Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella...

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Reviewed byDaniel Walker
Licensed Auto Insurance Agenthttps://res.cloudinary.com/quotellc/image/upload/insurance-site-images/insproviders-live/ca745a12-daniel-walker.png

UPDATED: Mar 19, 2020

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The lowdown...
  • Purchasing car insurance for a company car can be different than purchase car insurance for a personal vehicle
  • There are a great many risks that a company car faces that a personal use vehicle does not face
  • If you are operating a company car, purchasing coverage that protects against these risks is crucial for protecting the company and yourself
  • If an accident or loss occurs while operating a company car, your personal car insurance policy may not be sufficient to help you recover or to restore your company to their pre-loss condition
  • The limits of coverage on a policy for a company car will often need to be higher to protect against personal injuries or property damage you are at-fault for

Insurance coverage for a company car often means assessing the risks of the driver and the risks that the business is exposed to before purchasing coverage.

If the correct coverage is not chosen, you may be exposing your company to large risks they are not adequately prepared for which can lead to financial loss.

When you are operating a company car, it’s important to consider a policy for business-use vehicles. You also should discuss which party is responsible for obtaining this coverage.

Compare car insurance coverage today and find the right coverage for the right price.

Company Car Insurance Versus Personal Car Insurance

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When you are operating a company car, it’s important to remember that there are risks you will face that a personal auto insurance policy is not equipped to handle.

To properly address the additional risk exposure you face when operating a company car, you may need to carry a business vehicle policy that has been designed with the risks a company or business-use vehicle may face.

Policies for company or business-use cars are often based on the following:

  • how the car is used
  • who owns the car
  • the risks faced by the car and anyone operating it

It’s important to remember that the losses experienced while operating a company or business vehicle will often be excluded under a personal auto policy.

Another important distinction between company car policies or personal car policies is the limits of coverage that apply.

The limits of coverage on a personal policy are often going to be lower than those of a company or business-use policy; this is due to the different levels of risk a company faces compared to an individual.

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Coverage Options Provided By Company or Business Vehicle Policies

As stated before, the risks a company or business are exposed to when they have someone operating a vehicle are much higher than the risks an individual may face.

This risk is usually tied to the fact that a company car faces risks from the transportation of goods or persons, as well as the potential damages a driver could cause while on the clock or under operating directions from the company.

Due to the expense associated with paying for or recovering from car insurance losses, your business or company may have a set of standards and guidelines you need to abide by when operating any company-owned car.

These standards are aimed at reducing the risk associated with having these vehicles on the road and often include:

  • not driving while intoxicated or impaired
  • only allowing named drivers to operate the car

On a company car, the liability risk may be one of the highest that you face. Liability coverage is protection for injuries or damages you may be responsible for.

When you are operating under the direction of your business while on the clock, any property damages or bodily injuries you cause can expose your business to high amounts of risk.

Injured parties often look at businesses as big entities that can afford to pay out more in a claim settlement.

Remember that you may also be required to undergo additional driver education or training, which can help to reduce the risk you introduce and help you be a safer driver.

Some businesses may require the use of telematic devices. These devices can provide information about the following:

  • how you drive
  • where you drive
  • when you drive

Conclusion

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When it comes to a company car, any loss or claim can result in losses for the business, which is why car insurance geared towards company-use vehicles is necessary to protect you and the company from exposure.

Your business may have specific requirements about the coverage you must carry and you may be responsible for some or all of this coverage.

Before accepting a company car, make sure you understand what you are responsible for in a claim situation.

Your company may purchase coverage for you, though there are often specific requirements you must meet or standards you must abide by when you’re covered under their policy.

These requirements may include restrictions on when the company car can be used or circumstances where you are restricted or barred from operating the car.

Your company or their insurance carrier can answer further questions about any information you need to know.

Compare car insurance quotes today to find the right coverage for the right price.

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