Business Auto Question

[ShannonO]

I don't do a ton of Business Auto and so need some help thinking this through. Company ABC is owned by Mr. A. He dies and his wife Mrs. A takes over. Business does have vehicles insured in the business. Son-In-Law is an employee and insured driver.

Mrs. A has an old vehicle that she is giving to son-in-law. Vehicle title has not been transferred and is still titled to Mrs. A. Son-in-law wants to use this vehicle to go around to clients, drum up new business, etc. as this vehicle is more fuel efficient than the business insured vehicle he currently has.

Since Mrs. A is the owner of the businss and the vehicle is titled in her name, can the vehicle be insured on the business policy? It makes no sense to insure on her personal policy since she isn't driving the vehicle. But the son-in-law could insure on his personal policy with business use if she would transfer the title. Trying to think of the best way to have this vehicle insured (of course son-in-law prefers any method that means he doesn't have to pay the insurance).

My concern is that I don't think this vehicle is going to be 100% exclusive to being used in the business and the business does not own it. Working on the quote now so any tips or things I haven't thought of would be greatly appreciated.

 

[Guest]

I didnt follow this post well, but what about writing it on a personal policy rated as business.

 

[djs]

Write up a bill of sale (have Mrs A do this) and use that to insure the vehicle with the son.

Not that complicated.

 

[NCAgent]

Personal auto is the way to go in my opinion. It's also probably going to provide him better coverage in the long run, especially if used on a personal basis that infringes on the terms of the BAP.

Also, some BAP's don't do anything for personal cars or provide it on a limited coverage, regardless of who owns it.

 

[Guest]

If she's giving him the car, do a PAP with business use endorsement.

 

[jmr30183]

The options as I see it-

A) Insure it on Mrs. A's personal auto policy with son-in-law listed as the primary driver AND that it has occasional business use. If I went this route, I would make CERTAIN that vehicle has very high limits of liability. You stated that this doesn't make sense to you because she doesn't drive the vehicle. But it actually does make sense because she legally owns the vehicle and is therefore responsible.

B) Transfer the title into the name of the business and insure it on the Business Auto policy. I would at least quote it this way to compare it with the other options.

C) Transfer the title to the son-in-law and let him insure it on his personal auto policy. The insurer will need to know it is used for both personal and business. Some carriers want to know if business use is over or under a certain percentage, some just have an 'occasional/incidental business use' classification and they often they differentiate based on how it is used for business. For instance, making sales calls or a real estate agent driving clients around to visit property is considered much lower risk than pizza delivery or courier use.

The most important thing to remember is that it can't be insured on the son-in-law's policy or the company's policy if it is titled/registered in Mrs. A's name. The other essential thing, if it is insured on either personal auto policy, is to make sure the insurer knows about the business use and endorses the policy accordingly!

 

[ShannonO]

Thanks guys - another agent was telling me that the business owner could insure the vehicle in the business even if titled to her individually - and that just didn't make sense to me. But the limited BAP I do write is company owned vehicles. So definitely appreciate the thoughts. I need to get this owner to understand that company vehicles need to be company vehicles and her vehicles need to be her vehicles and the daughter/son-in-law vehicles need to be titled to them or else it's going to be a CLUSTER *!#K if there's a claim