Massachusetts Auto Insurance and Business Use

I have a friend that owns a small catering business. But, his could be a problem for ANY business.
He is always trying to save money on his insurance. I don’t object to that. We all want to save when we
can.

Several months ago he had an accident with his new truck. The one he uses for business.
The accident was minor, no one got hurt. The truck wasn’t so lucky. He had slid off the side of the road
on some ice and hit a large tree stump. It tore off the front wheel, tie rod, ball joint and half the other
stuff under there. He was upset because this is his brand new truck. He was more upset to find out that
the company was denying his claim.

He called me the same day he got the letter from the carrier stating the claim was being denied for
misrepresentation. “How can they deny my claim? I pay good money for this insurance.”
Apparently, he indicated during the phone interview that he was setting up for a party the day of the
accident and that he was delivering supplies to a home in that area.

“I have a loan on that vehicle. Who’s going to pay for the damages?” I had to tell him you are.
I turned his attention to the application that we had completed at the time we wrote the coverage.
Page 2 question 9: Is auto used in the scope of business? The question was answered NO.
I know we went over this, I said to him. Of course, he didn’t remember our conversation until I refreshed
his memory with the follow up letter I sent to him about the truck specifically. Right here in the letter...I
know you do catering...We should have this vehicle endorsed for Business Use. The last line of my letter
read; We can add this coverage for a small additional premium. Call me if you would like to add it.” He
never called.

He says to me that he only uses it for work once in a while. I said, the truth is out. The company has you
telling them on a recorded line that you were using it for business. How can I fix it, he asks? You can’t!!
The damage to his truck was almost $11,000.00. He had to pay that out of his pocket. To add Business
Use would have increased his premium by $30.00 a year!

We see issues like this all the time. Get the facts. Don’t give an insurance company a reason NOT to pay.

By answering the business use question with a NO, he had misrepresented himself. That
misrepresentation led to his claim being denied.
Before you have a problem using your auto for business, please call us. www.jmdins.com

For more than “37” years J.M. Doherty Insurance Agency Inc. “Steering you in the right direction”