Thinking about investing in a new car? Considering a transfer of the title of your vehicle to your business? If you’re a business owner, titling your vehicle has important implications.
Whether you have a fleet or scheduled auto policy, you must inform your insurance agent when you title a vehicle in a name other than the named insured on your commercial insurance policy. This ensures the vehicle has the appropriate business coverages.
Commercial insurance and personal lines policy usually cover liability exposures differently; vehicles titled in the business usually have higher limits, are covered for business exposure for the use of that vehicle and reduce personal liability exposure. Smart business owners usually title their vehicles in the business if they are used even occasionally for business purposes.
The type of coverage you need depends on a variety of factors:
- Whose name is the vehicle registered under? If it is registered in the business name, you need commercial auto insurance.
- How is the vehicle used? If you or your employees use the vehicle for business purposes, you need a commercial policy. Even personal vehicles may need commercial auto coverage if they are being used frequently for business purposes.
When transferring the title of your vehicle from your business to yourself personally (or vice versa), give your agent a call.