Company Car Insurance

Company car insurance is different than insurance for personal cars and is mainly dependent on what the commercial use of the car is. The average rate for company car insurance is $140/mo.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: May 20, 2020

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Here's what you should know...

  • A car has to be used for exclusive purposes in order to be considered an office or business vehicle
  • Factors such as commute distance, credit history, and personal use will influence commercial car insurance rates. The average rate for company car insurance is $140/mo
  • If a business car is leased out to an employee for personal use, business car insurance will not apply

Before using a vehicle for official purposes or using it for delivering goods, it’s important that one know about the various nuances involved in work vehicle insurance, also called commercial auto insurance.

To protect the assets of the company and to protect the interests of the employees using it, there should be adequate coverage for vehicles used on a regular basis.

To get reliable and affordable quotes for office car insurance, one must visit the website of several companies selling auto insurance. Office cars are used for business-related matters and different companies have varied use for their cars.

Some cars might be used:

  • To transport officials and drop them off at various locations
  • For media purposes
  • For delivering small goods
  • To transfer documents or important papers

Whatever the purpose, you must make sure the vehicle is insured adequately.

Enter a zip code to compare commercial and personal car insurance rates now!

Getting Quotes for Office Car Insurance

Buying insurance for office cars is a bit different from getting insurance for personal use cars. How does company car insurance work?

The difference between commercial and personal car insurance is etched deeply when one browses the net to get affordable quotes from hundreds of insurance providers.

Insurance quotes should specify the type of commercial use the vehicle is going to be used for. The insurance premium and the type of policy will be dependent on that one fact.

The type of car one is planning to purchase is going to affect the quote drastically. There are other factors that affect the quote for office car insurance:

  • Good credit history – Most insurance companies will run a background check on the applicant to see if he pays the credit bills on time
  • Location of business – If the business is located in an area where more accidents are likely to occur, then the quote for the premium will be high
  • Driving record – Employees who are selected for driving purposes should have a clean driving record
  • The purpose of the vehicle – The true purpose of the vehicle should be clearly charted and so should the frequency of use
  • The type of car and its features – The size of the official car is dependent on the variety of uses it is put into

The more features, a car has, the more rewarding will be the quote. Install anti-theft features, anti-lock and monitoring capabilities to the car. This is true for both commercial and personal vehicles.

Try out the quotes from several other insurance providers. The free auto insurance rates tool on this page provides comparative quotes from several companies all under one roof.

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Personal Use and Office Car Insurance

While the officials of a company constantly use the office car for all their official and business commuting, some will use it for their personal use occasionally.

Unless there is proper coverage in the auto policy, there is no coverage for the autos used personally by the employees.

There are some companies that allow their employees to use cars for pleasure trips during weekends and general holidays. Personal use by employees will not be covered in the office auto insurance policy.

There is no coverage for company cars that are leased out or purchased by employees. If these cars are used as a replacement vehicle by the employees, it should be mentioned specifically in the policy.

Most employees don’t feel the need for an alternate vehicle because they have the office car at their disposal. Most business organizations use the Business Auto Coverage Form or BACF for their auto liability insurance.

All the vehicles that are used for official purposes are listed along with their coverage options in the policy chosen by the insurance holder.

Depending upon the characteristics of the car used and the coverage needed for it, an insurance policy can be drawn. But the BACF doesn’t cover the personal use of an office car.

Bad Drivers Affect Office Car Insurance Premiums

The only way to keep the BACF premiums down is to avoid claims whenever possible. Safe driving and a clean driving record will go a long way in lowering the premiums.

However, sometimes due to lack of trained personnel, some organizations tend to send out their office staff for quick errands.

If the person is a risky driver, has a driving record and is involved in an accident due to his negligence, it’s going to reflect on the owner of the business organization.

By negligent entrustment, an insurance company means allowing a person possession of the vehicle, knowing fully well that the person is not fit enough to drive the vehicle and may cause bodily harm to others.

The owner of the vehicle will be legally liable for the damages; therefore, it is the sole responsibility of the company to be fully aware of the driving capabilities of each of their staff and to avoid using them no matter what the urgency is.

If they have an official driver, check the credentials of the driver to see if his papers are in order, before sending him out on an errand.

Compare office car insurance rates from several providers by entering your zip code now!

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