Commercial Auto Insurance: When You Need it; When You Don't

By Editorial Staff

Business owners, professionals and startup entrepreneurs often ask me about commercial auto insurance -specifically, if and when they...

Business owners, professionals and startup entrepreneurs often ask me about commercial auto insurance -specifically, if and when they need it, rather than personal coverage.  It's a tricky question, and the answer has lots of "it depends..."  So I turned to my new bud the GEICO Gecko for his sage advice on the topic.

Sure, sure, I know. Your typical tropical or sub-tropical lizard isn't generally known for insurance expertise. But the Gecko is a real go-getter in the field, and happens to represent one of America's top three private passenger auto insurers.  In case you're wondering, by the way, the Gecko first went to GEICO in '99 because people kept confusing the name "GEICO" with "Gecko."  (He's mum on how he gets along with Caveman.)

He does have a particular penchant for clams, however (check out his personal bio), so with the promise of a few, he cheerfully offers up these tips about commercial auto insurance, and when you need it.

Who's the registered owner?:  The Gecko says this is a slam dunk in at least one case: "When the vehicle is registered in the name of the business, you definitely need commercial auto insurance."  But don't assume the reverse. If it's registered in your name,  "it does not automatically mean that you should get personal auto insurance on it," says the Gecko. "A lot of times a solely owned business will have a vehicle registered in the name of the owner.  If the vehicle is being used primarily for the business though, you will need commercial insurance. "

Who drives?: Another sign that you need a commercial policy is if other employees at your company are driving the car.  Commercial insurance policies allow you to list employees as drivers.

Business Use: The next question the GEICO Gecko says to ask is this: "Is the vehicle getting regular business use?" Regular business use is defined as use for commercial purposes, on average, more than 3 times in a 1 month period. If your answer is "Yes," then commercial insurance is right for you.

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