Everything You Need to Know About Car Insurance for Business Vehicles
Does a business vehicle need to be insured? What if you’re using your personal car for work? Learn everything you need to know about car insurance for business vehicles in South Africa here.
What is Car Insurance for Business Vehicles?
Car insurance for business vehicles is similar to personal car cover. The insured gets cover for certain events, such as accidents and liabilities, that are set out in the policy documents. In return for this cover, the insured pays a monthly premium.
Business insurance for cars is different. The scope of cover changes when you’re using a vehicle for business purposes. The cover needs to be different, and the pay-outs can be less or more depending on the circumstances.
What Does Business Car Insurance Cover?
The cover you get depends on the plan you choose, but there are some similarities across the board. Personal car cover is designed to cover you for risks related to your use of a car in a personal capacity. These differ from business use.
If the car is used for business, it is often on the road more. Traffic conditions may differ. When a vehicle drives in peak traffic, it’s at higher risk for accidents. A business car insurance plan takes all these elements into account. There isn’t usually a limit on how many trips the vehicle makes in a month.
Comprehensive business vehicle insurance covers the largest scope of events and risks. Simpler plans may cover only third-party claims for bodily injury, loss, or damage. It’s up to the business owner to select the policy that best covers the risks their driver and vehicle will face.
Do I Need Commercial Vehicle Insurance if I Drive a Company Car?
Yes, you will need a commercial form of car insurance intended for vehicles used for business. This type of plan covers commercial motor perils instead of personal risks. Often, the company whose car it is takes out the policy and nominates a driver – it wouldn’t form part of a personal insurance portfolio.
Is it Good to Put My Car Insurance in my Business’ Name?
Yes, it is preferable to put your car insurance in the name of the entity that owns the car. A car or truck used for business purposes should not be placed on a personal plan. Instead, the car can be insured with a business car insurance policy.
If the company owns the car, the insurance premium will usually be paid by the company too. The company can then nominate a driver and inform the insurance company. It is important that the correct driver be selected when buying the policy to ensure your claim doesn’t get rejected if an insured event occurs.
Does it Cost More to Insure My Car for Business Use in South Africa?
Business cover for a car is often more costly because the vehicle spends more time on the road. A business auto insurance policy is designed to be cost-effective, with competitive rates offered by the leading insurers in South Africa. There are more affordable options and more expensive plans out there.
Instead of choosing a policy based on price, you can look at what is and isn’t covered. You can also look at any exclusions in the policy. These will differ depending on the insurance products you look at and the insurer.
In this way, you can make the most of your cover. The auto insurance company you choose should be reliable at paying out insurance claims. You can see reviews online, or you can compare companies on our site by getting a quote – just fill in the form.
What is Considered Business Use for Car Insurance?
How you use the vehicle can fall into three categories: personal, occasional business, and business use. If you mainly use the car for business-related purposes, it’s deemed as business use, even though the car can also be used for recreational or domestic purposes.
Occasional business use refers to a vehicle used up to a maximum of ten times a month for business. Personal use means you only use the car for your own personal life, including driving to and from your workplace or office.
Can You Insure a Personal Vehicle for Business Use?
Yes, you can. In fact, if you’re using your personal vehicle as a company vehicle, it is vital. Personal car insurance doesn’t cover insured events that happen while the vehicle is being used for business. If you’re on a business trip, and you are in an accident, your collision coverage may not pay out for vehicle damage or other costs. If you insure the vehicle for business purposes, however, you should be covered.
If you’re still unsure about the type of policy you need for your car, you can keep a driving record for a month. Assess how many times you used it for business purposes that exclude driving to your main place of work and driving home from that location. If the number is over ten, you will need business car insurance.
DISCLAIMER: The information that has been provided in this article is for informational purposes only. It should not be construed as legal, medical, or financial advice. Facts in this article are correct at the date of publication.