What Small Business Owners Should Consider before Purchasing Auto Insurance

Small business owners often overlook auto insurance

So you’ve purchased insurance for your small business but you’re still insuring your car personally. Depending on your particular operations a personal auto policy may not be such a wise choice. Your automobile just may apply to your small business more than you realize. Let’s take a look at whether or not you should consider commercial business based auto insurance policy.

When to consider commercial coverage

Do you have any employees? If they are using your automobile for business purposes the odds are very good that your provider will require a commercial auto insurance policy should the vehicle be damaged while an employee is behind the wheel. If you’re not certain, contact your personal auto insurance provider and explain the extent to which your employees use your vehicle.

Tips for keeping insurance premiums down

Now that you know whether or not to choose a personal or commercial policy, there are a few things that any car owner can do to lower the costs of their premiums. The first of which is choosing a quality vehicle. Auto insurance companies know that flashy cars with hard to find replacement parts cost a lot more to repair than a Toyota that can be serviced by anyone anywhere. Also the level of safety equipment like airbags can reduce your premium.

If you’ve already purchased a car and you want to find the increasing your deductible is another option. Increasing your collision and comprehensive deductible can have a huge effect on your overall premium. Besides, most insurance companies issue policies with deductibles in the $300-$600 range when a deductible of $1000 is a much better option. Higher deductibles mean lower premiums. Do the math. Even if you total your automobile every few years, a $1000 deductible will save money in the long run through lower premiums.

Better credit and lower premiums

Something you may not of figured int purchasing a commercial business based auto insurance policy is your credit rating. According to a recent study by Conning and Co., more than 90 percent of auto insurance companies use your credit information to assess your level of insurance risk. Of those 90% most of them assign higher premiums to candidates with ‘bad’ credit ratings. Looks like the reasons for keeping a solid credit rating just keep going up and up.

Ian Asterbury is assistant editor at Small-Business-Assistance.