Do You Have To Have A Commercial Auto Policy If Vehicle Registered To Business

We routinely ask business owners how their vehicles are titled before calculation the vehicle to a Commercial Motorcar Policy. Why? Because, the titled owner of the vehicle needs to lucifer the "Named Insured" on the policy so the policy tin can respond to a claim without delays and avoid the potential of denied coverage.

Related: Car titles - Do they matter for my personal auto insurance coverage?

A Primal CONCEPT TO REMEMBER

Vehicle titles are legal documents issued by the Department of Motor Vehicles of the Country that lists the proper noun(s) of the owners of the specific vehicle shown on the title. The titled owner of the vehicle tin be held legally responsible for who operates the vehicle and the maintenance of the vehicle that may have contributed to the blow. Oftentimes, after a serious accident, the driver and the titled owner(southward) of the vehicle are named in lawsuits and must defend themselves.

THE PROBLEM

In that location are many different legal entities for businesses - sole proprietors, partnerships, corporations, and LLCs primarily. When a business concern is a sole proprietor or partnership, we rarely have a trouble considering the vehicle title and the named insureds listed on the Commercial Machine Policy are the same.

Corporations and LLCs can be a trouble. The primary problem occurs when a vehicle is financed by a smaller business organisation at the fourth dimension of purchase. Most of the time the vehicle is purchased in the personal proper name of the business owner because information technology is a real hassle to finance a vehicle through the Corporation or LLC. Then the vehicle is put to work in the business concern and added to a Commercial Auto Policy in the name of Corporation or LLC but titled only to the owner.

THE SOLUTIONS

The best solution for any vehicle used primarily in concern and insured nether a Commercial Auto Policy is to exist re-titled in the business entity legal proper name. Sometimes we meet a vehicle co-titled in the possessor's personal proper name and/or the business entity legal name.

In any example, if your personal name is on the title, your agent will want to add you as "an additional insured" on the policy for that vehicle then you lot volition be defended along with your business organisation entity if y'all take a serious claim.

Every bit a full general dominion, you never desire to have your name on a motorcar title unless y'all specifically insure it under your own proper noun.

When planning to buy a automobile for the business, some consideration should be given to how a car will be titled and insured. When in doubt, call up to phone call your American Insurance agent for advice. Contact your Agent online here at call (208) 746-0646 or electronic mail Commerical-Lines [at] Am-Ins [dot] com and we can find a solution that provides you the protection y'all need.

FAQ DISCLAIMER against specific professional advice