Self-Employed on an ITIN: Getting the Work Vehicle Insured Correctly

Painters, landscapers, cleaners, handymen, people who haul for a living: a lot of small businesses in California are run by someone with an ITIN and a truck. The business side gets organized at tax time. The insurance side often stays exactly as it was when the truck was just the family car, and that is where the trouble starts.

When a personal policy stops fitting

California lets insurers rate on "type of use" — pleasure, commute, business or farm — as one of the optional factors in the state's rating regulation (title 10, section 2632.5). That is why a personal application asks how the car is used, and why the answer matters. Signs that the truck has moved past what you told the company:

• It carries tools or materials to paying customers' job sites.
• Helpers or employees drive it.
• It tows equipment, or has racks, a lift gate or signage for the business.
• It is titled in the business's name rather than yours.

Whether a personal policy rated for business use is enough, or whether you need a commercial policy, varies by insurance company and by the work you do. The wrong answer is to say nothing and hope.

The tax-ID side: what the IRS says

The IRS's online EIN tool requires that you have the responsible party's Social Security number or individual taxpayer identification number, and that the applicant be the responsible party or its authorized representative. A business whose principal place of business is outside the United States applies by phone, fax or mail instead. Whether your business needs an EIN at all is a tax question; ask the IRS or a paid preparer you trust.

What a commercial auto application asks for

1. The business's legal name, and any name it operates under.
2. The business address and where each vehicle is kept overnight.
3. The taxpayer number the company uses. Some accept an ITIN for a sole proprietor; others want an EIN.
4. A plain description of the work, and how far from home base the vehicles go.
5. Each vehicle: VIN, body type, weight class, and anything mounted on it or towed behind it.
6. Every driver: name, date of birth and license number. An AB 60 license is a California driver's license.

If a vehicle is heavy, crosses state lines, or hauls other people's goods for pay, other state and federal registrations may apply. Ask before you buy the truck, not after the first job.

The names have to match

If the truck is titled to the business, the business is normally the named insured. If it is titled to you personally but works in the business, the company needs to know both facts. A title in one name, a policy in another and a lender in a third is the setup that turns a claim into a paperwork dispute.

Helpers who drive

List every person who drives a business vehicle, even occasionally. Under Vehicle Code section 17150, an owner is liable for injury or damage caused by the negligent driving of anyone using the vehicle with permission, "in the business of the owner or otherwise." An unlisted helper behind the wheel is a risk to the business, not just to the policy.

What varies by insurance company

• Which trades it will write at all.
• Whether it accepts an ITIN in place of an EIN.
• What it requires before binding: photos, a down payment, proof of prior coverage, or a list of drivers' records.

Tell us the work, the vehicle and who drives it, and we will quote it the right way the first time.