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How does auto insurance coverage work for a small business?

I am the only employee of my small business (a C Corp). If I lease a car through the business, rather than personally, how does insurance change? Will coverage be more expensive? What if the car is only used 50% of the time for business and 50% for pleasure? What if my wife is occasionally using the car for non-business purposes?

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4 Responses to “How does auto insurance coverage work for a small business?”

  1. Wendy S said:

    The answers will depend on the rules of the company that insures you and your driving records. Any car used for business purposes, regardless of whether it’s owned by the business or not, is usually more expensive to insure, though. With the company I worked for it wouldn’t matter at all if it was leased in your name or in the name of the business.

    Call your current car insurer, tell them what you’re thinking of doing and they’ll be able to tell you how it would affect you.

    Good luck!

    Edited to add: Sorry to disagree, Isabella, but State Farm writes these as personal policies with business use quite frequently. As such his wife would be listed as an additional driver.

  2. Baby Poots said:

    I think you should have asked this question of your insurance carrier before you paid for coverage.

  3. mbrcatz17 said:

    If the car is leased in the corporation name, I don’t know of any insurance company that will give you a private passenger policy for it – you’ll need a commercial policy.

    Unfortunately, for one private passenger car, the commercial policy is usually a LOT more expensive than the personal one. From an insurance point of view, if you use the vehicle one half of one percent, it needs to be rated commercial, based on the usage.

    And if your wife is going to use it personally, you need to list her as an operator on the commercial policy. As long as you tell the company that there is some personal use, it will be fine.

  4. Time Management said:

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