Do I need Business Auto Insurance?

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Many times, we encounter customers that think they can use their vehicle in business and cover it with a personal auto policy. That is only sometimes true, depending on the particular type of business.

Differences between Personal and Business Auto Insurance

Some personal auto policies expressly exclude coverage for “business use” of vehicles. This might seem to be unfair from the standpoint that a car is a car and it shouldn’t matter why one is driving the car. However, again depending on the business, how you use that vehicle could make a big difference in the likelyhood that you will have an accident.


Delivery drivers contend with multiple stops and tight schedules. This dramatically increases the odds of an accident and is clearly the job for a business auto policy.

Specialized Equipmenttruck-utility

Vehicles that have specialized equipment, such as utility beds for tool storage, are more likely to be excluded from a personal auto policy.



If you have employees, a Business Auto policy would definitely be required.


Multiple Vehiclestruck-fleet1

Other concerns might be the number of vehicles in use by the business. If there are multiple vehicles a business auto policy may be a better choice. For businesses that have a lot of vehicles a business auto policy can be written on a blanket (All Autos) basis to simplify things.

real-estate-signIncidental Uses

At the other end of the spectrum would be a real estate agent using their car to drive potential customers to see homes. This is also a business use however on some policies that would be acceptable as an “incidental business use”.


The cost of a business auto policy is not always as big a problem as people fear. Often times, we are surprised at how close the pricing of a business auto policy is to the personal auto policy it is replacing.

The best option is to discuss with us your particular business and how it uses vehicles and, if needed, have us provide a business auto quote to compare.

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New California Driving Laws for 2013

SACRAMENTO, Calif. – New rules that govern the California driving public will go in effect on January 1, 2013. These rules are the product of legislation passed by the Legislature and signed into law by Governor Edmund G. Brown Jr. in 2012.

“The changes to California’s traffic safety laws are designed to protect the motoring public,” said California Highway Patrol (CHP) Commissioner Joe Farrow. “Citizens are encouraged to familiarize themselves with these new laws in advance of the new year. Adhering to the rules of the road may save your life, or the lives of your fellow motorists.”

The following are summaries of some of the new laws taking effect January 1, 2013:

Driving Under the Influence : (AB 2020, Pan)
The law no longer allows a person who has been arrested and is suspected of driving under the influence (DUI) of drugs, the option of a urine test. Prior to this change, a person had the option of submitting either urine or blood to determine the drug content of their blood.
Charter-Party Carriers of Passengers: Alcoholic Beverages: Open Containers : (AB 45, Chesbro)
This new law prohibits underage drinking in charter-party carriers (limos, buses, etc.) and makes the carrier and driver responsible for communicating this to their passengers. The law also requires a designee, who is at least 25 years of age, to be present whenever there are passengers who are under 21 years of age on board the vehicle and alcohol is being transported. The designee shall be responsible for ensuring the rules are followed, and the safety of the underage passengers throughout the duration of the trip.
Electronic Wireless Communications : (AB 1536, Miller)
This law allows California drivers to use hands-free technology to talk and text while driving. This will require the use of a device that is specifically designed and configured to allow voice-operated and hands-free operation to dictate, send or listen to a text-based communication. The device is required to also be used in a voice-operated, hands-free manner to be in compliance with the law.
Financial Responsibility and Insurance : (AB 1708, Gatto)
Drivers will now have the option of providing proof of insurance or verification of financial responsibility on an electronic device (smartphone, tablet, etc.), when it is requested by law enforcement.
High Occupancy Toll Lanes : (AB 2405, Blumenfield)
This law creates the Choose Clean Cars Act, which allows cars with a Clean Air Vehicle Sticker free access to carpool lanes that are converted to High Occupancy Toll (HOT) lanes.
Autonomous Vehicles : (SB 1298, Padilla)
This new law allows driverless cars to be operated on public roads for testing purposes, provided that each vehicle has a fully licensed and bonded operator in the driver’s seat to take control if necessary. The bill also instructs the Department of Motor Vehicles to adopt regulations that govern the licensing, bonding, testing and operation of autonomous vehicle technology.
Emergency Services: Seniors : (SB 1047, Alquist)
Similar to an AMBER Alert, the CHP would activate a “Silver Alert” upon request if a person, age 65 or older, is reported missing to a law enforcement agency and that agency determines that certain criteria is met. The criteria includes: the person is missing under unexplained or suspicious circumstances or the law enforcement agency believes the person is in danger due to age, health, mental or physical disability, environment or weather conditions; the person is in the company of a potentially dangerous person; or there are other factors indicating that the person may be in peril. Finally, there is information available, if given to the public, may assist in the safe recovery of the missing person.
Driver License : (AB 2189, Cedillo)
This law allows a driver’s license applicant who provides satisfactory proof that his or her presence in the United States is authorized under federal law, but who is not eligible for a social security account number, is eligible to receive an original driver’s license if he or she meets all other qualifications for licensure.
Automated Traffic Enforcement Systems : (SB 1303, Simitian)
This new law establishes consistency in the operations of red-light enforcement cameras throughout the state by requiring governmental agencies to follow specified guidelines regarding intersections, signage, and the notice to appear.
License Plates: Obstruction or Alteration : (AB 2489, Hall)
This new law prevents the altering and positioning of license plates from its original markings and clarifies the penalty imposed for obscuring the readability of license plates.
Child Passenger Restraints : (AB 1452, Hill)
Hospitals, clinics, and birthing centers will now be required to provide and discuss contact information regarding child safety seat requirements, installation, and inspection to parents and caregivers upon discharge of a child, if the child is less than eight years of age.
There are also two new laws related to recreational off-highway vehicles.
One (AB 1595, Cook) defines an off-highway motor vehicle to include a recreational off-highway vehicle (ROV) and establishes additional requirements governing its safe operation. The other law (AB 1266, Cook), which goes into effect July 1, 2013, prohibits a passenger in an ROV from riding in a seat location not designed and provided by the manufacturer. It also prohibits operation of the ROV if the passenger is not seated with both feet on the floorboard and able to grab the occupant handhold with the seat belt and shoulder belt or safety harness fastened.
Additional Registration Fees : (AB 1404, Feuer)
This law authorizes three counties (Los Angeles, San Diego and San Bernardino) to increase vehicle registration fees to help fund vehicle theft programs. Increases would be from $1 to $2 for passenger vehicles, and $2 to $4 for commercial vehicles.
Inflatable Restraint Systems : (AB 1854, Brownley)
This law makes it illegal for a person to knowingly distribute or sell a previously deployed air bag or component that will no longer meet the original equipment form, function or proper operation.
Driving Under the Influence: Alcoholic Beverage or Drug : (AB 2552, Torres)
Although this change in the law does not take effect until January 1, 2014, it distinguishes whether an individual was arrested for driving under the influence of alcohol or drugs. Ultimately this change, singling out drugs with its own subsection in the Vehicle Code, will make it easier to track the prevalence of drugged driving in California. This new law, coupled with the efforts requiring the use of Ignition Interlock Devices, will help reduce impaired driving throughout California.

These points are only a synopsis of some of the new laws adopted. For complete information on chaptered bills enacted in 2012, please refer to the Legislative Counsel website at

Why do I Need Uninsured Motorist Coverage?

The Importance of Uninsured Motorist Coverage

Frequently we see customers who select minimum limits on their Uninsured Motorist (UM) coverage. However, this could very well be a case of being penny-wise and pound-foolish. Uninsured Motorist is inexpensive but important coverage for you and your passengers.

Coverage for YOU

First of all, UM is coverage for you & your passengers. It was recently estimated that one out of every five drivers in California is uninsured. The next time you are on the road, look at the drivers around you. The odds are one of the four cars you see is uninsured.

Secondly, UM (in California) is coverage for both uninsured and underinsured (UIM) motorists. A motorist with minimum limits only has $15,000 available per person for the medical bills for you or your passengers and $30,000 for the entire accident, no matter how many people are involved.

UM is a very inexpensive coverage to buy. As an example, one personal auto policy I looked at that had $100,000 per person / $300,000 per accident limits for UM portion & was only $32!

Many people think that UM isn’t important because their collision and medical insurance will cover these expenses. However, even in the best of circumstances the medical insurance deductibles will not be covered. In addition, some medical insurance policies could exclude injuries caused by another. And, what about your passengers? Your medical insurance certainly wouldn’t cover them.

As a guideline, you may want to consider setting the limits for UM to be the same as your regular automobile liability limits. So, for example, if you have 100,000/300,000 liability limits, you would also want to have 100,000/300,000 limits.

Pizza Delivery May Not be Covered by Personal Auto Policy

Pizza Delivery by Tracy Hunter on FlickrBe aware. Your mileage may vary in this situation.

I frequently see kids driving around with the name of one or another pizza place on their car and wonder if their parents checked out the insurance for the employer. You see, your personal auto policy does not cover business use. That is the job of a Business Auto policy and why it costs more. These kids are usually in a hurry to get the pizza to the customer on time, so the risk can be significant.

On the other hand, I’ve read of court decisions that favored requiring the company with the personal auto policy to pay. Like so many other things in life, it depends. It depends on the wording of the policy, the jurisdiction, and the individual situation.

One should first check with the employer. The pizza company should have Delivery Coverage to cover both the company and their drivers. This would be on either their business auto policy or their company liability policy. Many pizza places don’t have it and so you would by relying on your personal auto policy. If they don’t and your kid gets into an accident, your insurance company may deny the claim leaving you to foot the bill. These are questions that are best asked beforehand.

Adequate Auto Limits are a Necessity

They really are. I’m not just making this stuff up

One of the things we spend a fair amount of time with is trying to talk new customer out of minimum auto limits. Now, I know what some of you are thinking. “They’re just trying to boost up their sales.” Trust me, for the few extra bucks we would get in commission it’s really not worth the effort. It’s a lot easier to just let our customers pick what they want and move on. However, we see the other side. We’ve seen customers that had an accident and chose to under insure. The minimum liability limits for California are 15/30/10. That’s $15,000 for each person, $30,000 for each accident, and $10,000 in property damage. Let’s look at that last number. $10,000 is all that would be paid if some else’s car was totaled. How many $10,000 cars are out there today? Not many. What happens if the limit isn’t enough? You pay. $15,000 isn’t much coverage for the medical and hospital bills of someone that gets hurt now is it?

The additional cost isn’t worth the anguish you’ll experience if it isn’t enough.