Can An LLC Own A Vehicle And Use Personal Auto Insurance?

The LLC is a band, and commercial auto insurance is almost certainly outside our budget. The vehicle will only be driven several times a month to local performances in town. Occasionally we will drive out of state, too.

  1. 429 POINTS
    Rich Haag
    President, Rich Haag & Associates, Inc., Clayton, NC
    Typically no, however their are some companies that will write the LLC on a personal policy. First ask yourself why you would want a personal policy instead of a commercial policy when you are trying to separate liability. You can purchase commercial policies in various increments starting at $100,000 in coverage. This premium should be commensurate with a personal policy premium. Also, a commercial policy will allow for more drivers to be listed on the policy and provide coverage for all the members of the LLC. Ask your accountant why the LLC would want to own the vehicle? Then get with your insurance agent to find the best coverage for you which will include a risk assessment on what you have to lose. Example, you have $200,000 worth of equipment in that van, where is the coverage for the destruction of that equipment? Personal policies will look to your home or renters insurance, whereas a commercial policy can include coverage for transportation to and from the events. Personal policy maybe cheaper, but it may also not cover you for an accident.
    Answered on July 22, 2015
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  2. 21750 POINTS
    Jim Winkler
    CEO/Owner, Winkler Financial Group, Houston, Texas
    That is a great question! You certainly could, but I do not think I would want to be in your shoes should you (God forbid) ever have to file a claim. The majority of insurers will differentiate a vehicle used for obvious business purposes (a vehicle filled with tools, having attached advertising, or damaged during the work activity will generally get them to consider the vehicle as being used commercially in most cases) versus private usage. That may not keep them from paying the claim, but it may allow them to contest it, or delay payment during an investigation of the claim.
    You may very well want to look into the alternative of purchasing a commercial coverage policy, especially if you will be transporting things of value in the vehicle that would be costly to replace (tools, files, computer equipment, etc.). Your companies liability part of the policy will protect your family's assets against a claim than your private insurance would also.
    I'd ask you to get a commercial policy, and write it off as an expense. Thank you for asking!
    Answered on July 22, 2015
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  3. 14231 POINTS
    Tom Sheehan
    Agency Owner, The Thomas G Sheehan Agency, 27 Glen Road Sandy Hook, CT 06482
    My colleagues have been right on the money with this one, I believe. If one has a reason to establish a separate legal entity like an LLC for purposes of added protection, then one has a reason to maintain that separation throughout all of their insurance plans. Many times I have seen a business set up as an LLC to use this example, with their General Liability established accordingly, but then break down that protection by registering the business - use vehicles in the name of an individual. That can lead to a serious breach in insurance protection. There are both legal and economic issues at stake that need to be addressed by professionals in those fields. Your INsurance Professional can and should be part of your advisory team and can provide the coverage you need.
    Answered on July 27, 2015
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