Real estate agents are constantly on the go and often use many of their own resources to assist them with their line of work. One of these is their vehicle. This raises the question as to what kind of car insurance do they need.
Do Realtors Need Commercial Auto Insurance?
The first thing any real estate agent needs to check into is the vehicle insurance they need for their vehicle if they are using it for their real estate activities.
They will soon discover that this use of the vehicle puts them into the commercial insurance category. However, there may be some additional factors that need to be considered. For example how often is the vehicle being used for these business purposes?
The Difference Between Commerical and Personal Vehicle Insurance
The big difference between these two insurances is the purpose the vehicle is being used for.
Personal insurance means the vehicle is being used for personal reasons. Such as commuting back and forth to work, or for personal travel.
Commercial insurance is usually applied to vehicles that are used for a business. Which can include real estate agents.
Auto Insurance Requirements For Real Estate Agents
The requirements are going to depend on the circumstances of the realtor as well as the insurance company they decide to use. If the vehicle is being used for regular business use the insurance company may insure the vehicle for commercial use. However, if the realtor is only using the vehicle to go from one property to another then it may only require personal use insurance.
Obtaining Realtors Vehicle Insurance
When applying for insurance there is usually a questionnaire that has to be filled out by the applicant. One of the questions that may be on this application is what the primary use of the car will be for. Some real estate agents who work full time will probably use their vehicles on a full-time basis for this purpose. It should be declared on the insurance application.
The insurance company will then determine if commercial insurance is required, or whether the insurance needed still falls under the personal insurance category.
The real estate agent has some options for shopping for insurance.
They can go through a broker and provide them with the pertinent real estate use of the vehicle. These brokers will then search through the insurance companies they are affiliated with to find the best rates.
Another option is to use a quote finding service online that will do similar to what the broker does. Only the difference may be, is that the quote finding services accesses many more insurance companies so there are more options for the real estate agent to choose from.
Another option is to find a real estate association that helps its members with insurance. For example, in Ontario, there is the Lawrie Insurance Group that supports the Ontario Real Estate Association members. Also, many other insurance companies have partnered up with this association. Meaning that if one of these companies is approached by a member of the association they will get better rates.
What Kind Of Vehicle Insurance Do Realtors Need?
The purpose of insurance is to protect drivers and third parties from the costs that can be incurred as a result of an accident. Insurance agents are putting themselves at risk of a collision every time they use their vehicle for their real estate business.
The vehicle may be used in a variety of ways such as:
- Driving to see properties that may be going on the market
- Taking prospective clients to see properties
- Driving back and forth to the realty office every day.
There are several increased risks that come with these types of business activities.
More time is spent driving which automatically increases the risk of an accident.
Transporting clients creates a greater risk of liability. Potential clients could experience personal injury as a result of an accident.
Real estate agents visit many different areas and neighbourhoods. Some pose a greater risk of vehicle theft.
These are not only greater risks for the real estate agent, but greater risks for the insurance companies. They are going to determine the level of risk and decide whether the circumstances place the agent into a need for commercial coverage.
There will be higher costs for commercial insurance. However, there are also more options for increased insurance coverage.
The proposed use of the vehicle in the case of real estate agents is going to be a big factor. However, there will be other considerations as well. The standard metrics will also be utilized in determining the insurance needed. Such as the driving record and the type of vehicle.
Just because an individual is an insurance agent does not automatically put them in the commercial vehicle insurance category. For example, if an agent is only using their vehicle to drive back and forth to work at their agency, then it may be the Insurance company will keep them in their personal insurance category.
If an insurance agency is providing vehicles to their insurance agents then the agency itself will be responsible for the insurance. In this case, it would be commercial vehicle insurance. Depending on the circumstances it could be fleet insurance that they would rely on. Which may give a better rate.
The Final Decision
Which insurance company a real estate agent decides to go with will be their personal decision. However, it is extremely important that the agent be upfront with their insurance provider as to the use of the car. If the agent doesn’t and happened to get into a collision during the course of business then the claim could be denied. This could be very costly especially if they were transporting clients and personal injuries were incurred.