If you own and operate a car or truck with a license plate in Pennsylvania, you are required to have that vehicle insured. Although you may be familiar with personal vehicle insurance, business use, and the potential for multiple operators, increases your exposure to risk. You should contact your insurance provider to determine the necessary changes. This document provides information for people who are changing insurance providers, or for beginning farmers (anticipating changes in vehicular use). Personal policies don't cover pesticide or agricultural product transportation, necessitating purchase of commercial vehicular insurance. Policies for multiple vehicles may need to be adjusted for commercial coverage on one or more of those vehicles.
At first, it might seem better to have all vehicles covered with one product, for simplicity's sake. However, income tax record keeping will require you to separate the cost of operating commercial vehicles as part of the overall farm or business expenses, pointing to the need to consider having separate policies. The key factor in this decision is whether you can clearly separate the cost of the commercial vehicles from other costs of a single policy (an issue that you should raise when speaking to your insurance sales person). If you can separate these expenses, it may cost less money to have one policy as opposed to two. Regardless of whether some items are listed as commercial on a single or separate policy, it is important to determine how the vehicles that you own will be used (farming/ business or personal), so that they are listed appropriately. An occasional trip in your pickup truck to transport non-hazardous materials may not require covering it as a commercial or business vehicle. However, you should have a discussion about what you intend to do with your sales person, to reduce surprises in the event of a claim.
As in other types of insurance, the amount of coverage you select will depend on the level of protection you desire. Raising the limits related to coverage will provide greater protection, in comparison to simply purchasing the minimum amount required by law in Pennsylvania. The premium you will pay will be impacted by your credit score and the amount of deductible chosen. Coverage options to consider include:
- Liability limit
- Medical expense limit
- Funeral expense limit
- Property damage limit
- Accidental death limit
- Tort option
If you are purchasing a personal insurance policy, the information you will need to provide to your insurance sales person will include:
- The year, make, model, and Vehicle Identification Number (VIN) of the vehicle(s)
- The name and address of the lending institution financing the vehicle (if applicable)
- Name and driver's license number of the primary driver of each vehicle
- Description of any accidents that the listed driver(s) have had in the past
- Description listed drivers' past traffic violations
When purchasing a commercial or business policy, you will need the information listed above, with some additions:
- Description of any safety training policy you have in place
- Proof that operators are licensed to drive the vehicles listed on the policy (For example, a vehicle that is registered for weight limits over 26,000 pounds may require a Commercial Driver's License (CDL)).
- Towing limit of covered vehicles
- Identification of covered vehicles that pull a trailer licensed for over 3,000 pounds
A trailer licensed over 3,000 pounds will need to be inspected one time each year (like a motor vehicle). It may also need to be listed on your insurance policy. Trailers licensed for less than 3,000 pounds will not need to be inspected each year; their contents will be covered under your vehicle policy.
There are special circumstances to consider. If you are transporting pesticides in a trailer, you should inform your sales person that you plan to do so. If you have a livestock trailer to transport animals to slaughter or market, you should be sure your insurance provider knows about this planned use. Your insurance provider may recommend cargo insurance, providing added protection for the contents of the trailer. In the event of a loss, the contents you are carrying (products) or transporting (livestock) will have the benefit of the additional protection.
Information Checklist for Vehicle Insurance Discussions
Your current policy
- The year, make, model, and Vehicle Identification Number (VIN) of the vehicle
- Is there a lending institution financing the vehicle? Is so, their name and address?
- Have you had any accidents in the past?
- Who will be the primary driver(s) of each vehicle and their driver's license number(s)?
- Have any of these drivers had an accident in the past?
- Have any of these drivers committed a traffic violation in the past?
- If you have written safety training, take these documents with you for review.
Prepared by Lynn F. Kime, extension associate; Winifred W. McGee, extension educator; Robert Faubel, independent insurance agent, Danner's Insurance; and Maggie Garcia-Taylor, insurance agent, Garcia-Taylor Insurance Agency.
This document is based on work supported by USDA, Risk Management Agency, 2014 Risk Management Education Partnerships Program, Agreement Number 14-IE-53102-036.