As a real estate agent you probably drive your vehicle for business purposes on a pretty regular basis. This can involve driving clients around to look at homes, heading to potential clients to look at their house, picking up marketing materials at the printer, or setting up open house signs.
All of these activities would be considered business related by your insurance company and almost all personal car insurance policies exclude coverage for commercial or business activities. This means that you could end up with a denied claim if you are in an accident or your vehicle is stolen while you are working, leaving you on the hook for the cost of repairs and medical bills.
Personal auto insurance is only designed to cover accidents and other incidents when you are using your car for personal reasons which includes commuting from work and home. However, once you start using your car for business reasons, such as driving clients around, it is considered business use and you may not be covered.
What Is the Difference Between Commercial Car Insurance and Personal Car Insurance?
While there are a number of differences between a personal and commercial auto policy some of the biggest differences come in the coverage amount limits and the purpose of the coverage. As a real estate agent driving clients around, your liability risks are much bigger than just driving yourself or your family around, that added risk may require higher liability limits.
Commercial policies have liability limits that can run up to $2 million. While it can vary by insurer, most personal policies have liability limits that top out around $500,000. If you are in a serious car accident with some clients and their family, medical bills could easily exceed $500,000 very quickly and you would have to make up the difference.
In addition, if you have not notified your insurer that you are using your personal vehicle for business purposes, they may deny the claim altogether, leaving you on the hook for all of the medical costs of your injured clients.
Do I Need Commercial Auto Insurance as a Realtor?
This can be a difficult question to answer and in most cases, it is best to talk directly to your insurance agent to determine what type of policy is best for you. Here are a few things to consider when determining if a commercial policy is necessary:
- Do you drive clients around in your car: If the answer to this question is yes, you should be carrying a commercial car insurance policy. The majority of personal car insurance policies exclude coverage if you are using your car for business purposes. This not only applies to real estate agents but Uber drivers, pizza delivery drivers and anyone else that is using their car for business purposes.
- Do you use your car for business purposes: Even if you don’t drive clients around in your car, if you are using your vehicle for business purposes on a regular basis, you may need a commercial policy. This can include activities such as putting out signs for an open house, picking up or delivering printed materials, or even driving to a closing. If you use your car for these types of activities on a regular basis you should check with your agent about a commercial policy.
- Who Owns the Car: If your brokerage gives you a company car to use, it should absolutely be protected by a commercial insurance policy. If any of the following apply, a commercial policy is probably necessary:
- Any of the vehicles you use are owned or leased by a partnership or corporation
- Any of the vehicles your drive are registered to a business
- Any employees or non-listed drivers on the policy use your vehicles regularly
The Bottom Line
While you may be able to get by with a personal car insurance policy as a real estate agent, industry experts recommend carrying commercial insurance. Even if you rarely drive clients around in your own vehicle, it only takes one accident with a client who insisted on riding with you to dramatically impact your business and personal finances.
A commercial car insurance policy ensures that you are fully protected regardless of whether you are showing properties, headed to an open house or picking up property brochures from a printer. While commercial car insurance is going to be a bit more expensive than a personal policy, it can be a financial lifesaver if you are in an accident while on the job.
For a quote, give us a call or text us at (281) 242-0020. You may also fill out the quote form here: https://www.gorockland.com/business-insurance/commercial-auto-insurance