Does my car insurance cover business use?

If you have a personal car insurance policy, you’re not covered for any work-related use of the car unless you add the correct coverage. So, what is considered business use of a car for insurance? Business use can include things like:

  • Visiting clients
  • Making deliveries
  • Picking up or dropping off business supplies and equipment
  • Transporting clients, employees or coworkers (except as a carpool)
  • Visiting job sites
  • Driving to meetings, to the bank or anywhere else for business purposes
  • Conducting business over the phone while driving
  • Taking a trip for work in your car

If you use your car for any of these purposes, or any other work-related purposes, you need business use car insurance. In most cases, this can be simply added as an endorsement on your personal auto policy.

Why do you need business use car insurance?

If you drive your car for work, insurance companies see you as a higher risk because you’re likely on the road more. There may also be additional liability risks involved, especially if you transport clients in your car.

There is usually a business use exclusion on your personal car insurance. If you’re involved in an accident and you don’t have coverage for business use, the insurance company can deny the claim. That will leave you responsible for property damage or injuries resulting from the accident if it’s your fault. Furthermore, the insurance company could decide to non-renew your policy since you failed to disclose the fact that you use the car for work.

What type of car insurance policy do you need for business use?

If you own your car and use it for both personal and business purposes, you need a standard personal car insurance policy with a business use endorsement. This will cover you both when you’re driving on personal errands and when you’re driving for work.

There are a few other circumstances where a car is used for work but needs a different type of policy. Those include commercial car insurance and rideshare insurance. Let’s take a look at the differences.

Business use car insurance vs. rideshare insurance

If you drive for Uber, Lyft or another rideshare service you use your car for work, but in a very different way. Rideshare insurance is an endorsement that’s designed to cover the gap between what your personal car insurance covers (any time you are not working for the rideshare company at all) and the coverage provided by the rideshare company.

This coverage is for rideshare drivers and those who make deliveries for services like Uber Eats. It doesn’t cover any other type of business use.

Business use car insurance vs. commercial car insurance

The main difference between business use and commercial car insurance is who owns the car. Commercial car insurance is required for vehicles that are owned by a company. Business use, on the other hand, is an endorsement for personally owned vehicles.

If you run a business and the car is purchased and registered in the company’s name, you need a commercial car insurance policy. If you’re a sole proprietor, you can likely purchase personal car insurance with a business use endorsement.

It is possible to buy commercial car insurance if the car is in your name and it’s used for both work and personal purposes; however, it’s important to note that in the same way that personal car insurance doesn’t cover business use, commercial car insurance doesn’t cover personal use. You’ll need both personal and commercial auto insurance in this case.

Commercial car insurance offers higher liability limits and may be the only choice for certain types of vehicles, like large trucks or delivery vans. If you’re not sure if you need commercial insurance, speak to an insurance expert.

Where can I get business use car insurance?

Start with your current car insurance company. Most insurers will be able to add a business use endorsement to your policy.

You may, however, want to shop around and compare rates. There is a cost for the business use endorsement, and if it bumps your rates up too high, it’s time to check out other options. It may be worth shopping around either way, as odds are good you could save money.

Auto insurance FAQs

Can I drive a company car without my own insurance?

Generally, yes. Insurance follows the car and not the driver. If you have a company car insured by the company on which you are named as a driver, that policy will cover you. However, make sure you read all of the fine print. Company car insurance policies may not cover the vehicle when used outside of business.

Do I need business use car insurance as a delivery driver?

Yes. Whether you are delivering pizzas or packages, your personal car insurance won’t cover you during that time.