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Does My Personal Auto Insurance Cover Business Use?

If you've ever been in a situation where you need to use your personal vehicle for business purposes, you’ve probably wondered, “can personal auto insurance cover business use?”


Well, we hope you have thought about that at least once.

Can personal auto insurance cover business use?


The short answer—not really.


In most cases, personal auto insurance does not cover business use, so you'll need a commercial auto insurance policy if you use a vehicle to run your business.


So what’s the difference between personal auto insurance and commercial policies? It mainly comes down to the amount of coverage you’ll get.


If you have personal auto insurance, you’ll have coverage protecting you and your assets, helping you prevent financial hardship if you have an accident. With commercial auto insurance, you and your business will be protected in the case of auto-related emergencies or lawsuits.


Who owns the vehicle?


If your vehicles are owned by your business, they need to be covered under a commercial auto insurance policy. This policy protects you, your employees, and your business finances from auto-related incidents.


While you’ll likely need commercial auto insurance if your business owns your vehicle, you may be able to get away with a personal auto policy if you are a sole proprietor.


However, you will need commercial auto insurance if:


  • Any of your cars are owned by a corporation, LLC, or proprietorship.

  • Any of your vehicles are titled or registered to a business, including a partnership or corporation.

  • You rent or lease vehicles as part of your business.

  • Any non-listed drivers use their own vehicles for business on behalf of your business.


When can I use my personal policy for business use?


You can use your personal vehicle during the business day if it falls under circumstances like these:


  • You drive your car to a business meeting.

  • You commute to the office every day.

  • You run an errand for your boss.

  • You grab coffee for coworkers on the way to work.


Personal auto insurance is designed for the needs of the average worker, so it includes commuting or work errands. However, if your job or business requires you to go to several different work sites daily or deliver products related to your job, a personal policy likely won’t be enough.


When do I need a company policy?


Whether you’re an employee, a sole proprietor, or a business owner with employees, here are some examples of situations where you need a commercial auto insurance policy.


  • You haul business-related commercial goods (eg. pizza delivery or newspapers).

  • You have to meet multiple clients at multiple locations.

  • You transport others for business reasons (eg. like as an Uber driver).

  • You have a vehicle that is a pickup, utility vehicle, or work van that weighs over 10,000 pounds.

  • Your vehicle is outfitted with permanent work equipment (eg. cooking and catering equipment, ladders, toolboxes, etc.).

  • You travel with expensive tools for your business.

  • You allow your employees to drive your vehicle for work purposes.


Pros of having a commercial auto policy


With a basic company policy, you’ll be covered under these circumstances:


  • Repairs: All vehicle damages will be covered.

  • Medical bills: In the case of an accident, medical bills for you, your employees, and any passengers will be covered.

  • Legal fees: If you or your employees are at fault, legal fees will be covered with a commercial policy.

  • Lost wages: If your vehicle is in disrepair, this policy can cover lost revenue.

  • Pending lease payments: If you are leasing your vehicle and it is highly damaged, insurance can cover the money still owed on the lease.

  • Funeral expenses: While this isn’t a fun topic to anticipate, this coverage can give you peace of mind in the case of a death.


Do you need to have separate policies or one policy?


If you have a commercial auto policy, you will need a separate policy for personal use.


Personal auto insurance does not cover business use, and likewise, a commercial policy will not cover personal usage.


Of course, there are some gray areas. Depending on what type of business you do and what you use your vehicle for, we can possibly amend your personal vehicle to Business Use.


For example, if you’re a realtor, we can switch your personally insured vehicle from commuting to business use on your auto policy.


This is why it pays to have someone help you figure this all out!


Contact one of the members on our rockstar team to ensure you have the right coverage for your personal and business auto needs!


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