So my uncle was surprised at work yesterday when his boss "gave" him a car as a gift for being with the company so long. When asking his boss about putting the car in his name his boss said it was going to stay under the companies name. My uncle would use it like it was his own car whether it was work or vacation the car was "his." He would have to put the car on his insurance plan and pay the insurance, but was assured he was not liable if he got into an accident. I am a little bit confused as to whether these stipulations(insurance payments) are customary, any ideas? He also does not receive an allowance on gas because the car is "his."
So he has to pay his own insurance and put gas out of his pocket?!! Is his boss name Morey or Les? Eff that car! Return it.
Business wise, the arrangement is odd. However, the "arrangement" is fairly straight forward and not unlike the arrangement most of us have that don't own our cars outright. That is, when we make payments, the bank (or in some cases, another individual) owns the car and we carrier the insurance. The difference here is, the car will never be paid off and your uncle will never be the owner. Gas wise, I don't think the business owner can be made to pay for gas unless it is was for business use, but I could be wrong on that. At worst, your uncle can write that off for tax purposes. Insurance wise, if your uncle has an at fault covered loss, then his own policy would pay for the damages to his vehicle and any other vehicle/party that was involved, regardless if it was on personal or business time. Depending on the carrier, they could raise a fuss if the accident occured on "business time" if the use of the vehicle for business purposes was not disclosed when the policy was written (big key here). Above and beyond policy limits (worst case scenario), then liability/responsibility would depend whether your uncle was on personal time or business time. Overall, your uncle's boss is wrong to say he would not be liable in an accident. Hope that helps.
Usually when you have a company car they own it or lease it and pay all the taxes, insurance on it. This sounds like that boss might be running a tax scam.
If his uncle is on business time and gets into an accident the owners insurance policy would be responsible to pay under the hired/non-owned portion of his company's GL policy. I believe this is what the owner was referring to. Now when his uncle is using it for things other than for the business its going to fall under the primary auto policy for your uncle. If a lawsuit were to occur, and they find out that the car is owned by a company rather than an individual, the company would be brought into the lawsuit as well. The owner of the company needs to put this on his commercial auto policy and not be exposed to the lower limits that your uncle will carry on his personal policy.
This is the portion of the post I was specifically referring to. Seems the company was very vague and implied that he wouldn't be liable whether personal or business since they owned the car. Obviously that is not correct. Who owns the car doesn't matter here. Its whether is was on personal or business time.
One concern would be that his boss could take the car back anytime and your uncle would have to scramble to find transportation.
He can run a little test. Crash the car into a tree and see who pays to fix the damage. If no one ponies up, it doesn't matter because the car was free anyway.
Is the car titled to the company or your uncle? This will tell you who has the insurable interest unless there is a lease agreement in place.
I believe in the OP it mentions it's titled to the company. I agree the arrangement sounds strange thus the reason I say hotbox the b****
You made two incorrect statements here: 1. 100% absolutley wrong. His personal policy would only pay if he was on personal time. 2. Anything above policy limit the company is being brought in regardless.
Ok, just read that again. Insurance follows the title. The company needs to insure it and is liable for him driving it.
If he the company put the title under your uncle's name, he would have to pay income tax for the retail value of the car.
It's my understanding the car is in his name, but it belongs to the company. You can not insure anything that you have no insurable interest in. If the car was in the company's name, he couldn't get insurance on it anyway.
1. It's not wrong. Read my 2nd statement. It depends on the carrier, how strict they are and the circumstances of the loss. I am licensed in TX and handle over 1,200 claims a year and probably over 20,000 in my career. I've seen carriers cover "business" accidents hundreds of times under a personal auto policy even when "business" use (whether limited or not) was not disclosed at the time the policy was written. 2. I've never seen a company that owns a vehicle be brought in (not successfully anyway) as a party if the driver was on their personal time in an at fault accident. It would be akin to someone trying to sue Chase Bank because they hold the note on a car that one of their customers is making loan payments on. In most scenarios, the company would not be responsible for negligence someone commits while on their personal time. Thinking about it, the whole coversation maybe moot anyway as I don't think many carriers would allow a personal policy if the uncle is not the owner (doesn't have an insurable interest). Didn't really think about that to start.
