As a real estate agent, you’re constantly zipping around from place to place. You might be taking clients to look around at potential properties, gathering up marketing materials to throw up around your area, dashing off to open house appointments—the point is that you’re on the road quite a bit, and all that driving could pose a potential liability if you’re not properly covered.
As experts like Dan Rose, a lawyer for car accidents in the Bay Area, point out, if you’re performing all these real estate duties but relying solely on your personal auto insurance, there’s a chance you might not be covered in the case something goes wrong. This is where specialized, commercial car insurance comes into play, and today, we’ll be discussing what you need to know as a real estate broker or leader of a team of brokers.
How Commercial and Personal Insurance Differ
The main differences between your personal insurance and commercial auto policies are the purposes of their coverage and the total amount they’ll usually cover. Your personal auto insurance, for instance, is designed to cover the basics—personal injury, injuries to a passenger or occupant of another vehicle, etc. What it’s not designed to cover, however, is the additional risks brought on by ferrying around business clients or having a team of brokers.
While your personal policy limits may cap out around $500,000 or so, a commercial can go much higher, and thus cover some of the serious situations you may face in the course of your duties as a real estate broker. Damage to business assets, injuries sustained by employees—these are the types of things a commercial policy might cover that a personal one will not. Add to that the fact that your claims might be denied if you’re using a personal vehicle/policy for business activities, and it raises definite questions about whether or not a commercial policy is what you’ll need to continue doing business as a broker.
Do You Need Commercial Insurance As A Real Estate Broker?
Unfortunately, there’s no simple “yes” or “no” answer for this question, and you’ll probably want to speak with an insurance agent to work through all of your unique situational details that may influence your best course of action. By and large, however, there are a few details you can use to gauge whether or not a commercial policy is something you should be considering:
- Are you transporting clients? If you’re just using the car to move yourself around, then a personal policy may suffice, but if you’re darting all across town with business passengers in tow, you may need to look at a commercial policy to protect yourself and your clients.
- Is this vehicle being used for business purposes? Your car might still be qualified as “business use” even if you aren’t ferrying passengers from property to property. Going to activities such as open houses, delivering things for your brokerage—these (and other) activities all fall under the banner of business, so be sure to check if you need a commercial policy because of that.
- Who owns the vehicle? Basically, if your company or brokerage owns the car, you should probably look at getting a commercial insurance policy. If not, there could be leeway, but you’ll want to consult a professional to make sure you’re doing things correctly.
Bottom line, if you’ve got a vehicle you’re using for business purposes, it’ll do you a world of good to explore the possibility of a commercial insurance policy to keep yourself, your team, and your clients protected to the furthest extent possible.