- quote -

Here's the real question - call your insurance back ask him
this "If I get in an accident while using my vehicle in my
business as a sole proprietor, will your company cover the
damages if my vehicle is listed as a commuter vehicle?" and
be sure to ask him for written confirmation.

What you have to be careful of is to make sure you have
coverage for the use of the vehicle. I've seen many a
client get lower insurance premiums by not getting
commercial or business coverage only to find out when they
file a claim the insurance company's response is "Sorry, we
agreed to cover you for commuting and non-business purposes.
You were using the vehicle commercially or for business but
you weren't paying those rates, so there is no coverage for
business or commercially related incidents."

BTW - this not only applies to auto insurance but also to
homeowners insurance as well. And not only for sole
proprietors but also for just about anyone with a home
worker, like a maid or nanny, who is considered a household
employee. And keep in mind, it isn't YOUR definition that
counts, but the insurance company's.

Good luck,
Gene E. Utterback, EA

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"MissLivvy was:Curly" <XeveryidiwantistakenX[at]yahoo.com> wrote:

- quote -

It's not really relevant.

- quote -

What you do with the vehicle is lot more important taxwise
than mere insurance classification.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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MissLivvy was:Curly wrote:

- quote -

My wife's car (to be precise, the car my wife primarily
drives) is also called a "commuter" vehicle on the auto
insurance, even though she doesn't work. I don't see a
problem.

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I recently started a sole proprietorship and I am working
from a home office. My auto insurance policy (currently up
for renewal) has my car categorized as a "Commuter" vehicle,
because last year I was a W2 employee.

Now that I will be taking a home office deduction, is it
necessary to change my insurace policy status to a different
(non-commuter) classification? I guess my concern is in case
of an audit, would they want to see what my insurance policy
says?

I called the insurance company and they said my renewal rate
will be the same regardless of the categorization, because
they won't see the mileage reduction until next year (like I
said, I just started working from home). So it's not about
money, it's just that I'd rather not spend the time going
into their office and drawing up a new policy just to change
the categorization of my mileage if it's not a necessary
precaution in case of an audit.

TIA

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