Does my car insurance cover business use?
Your personal car insurance will not cover business use unless your policy includes the right endorsement. Driving to one regular workplace is commuting, but driving to clients, meetings, job sites or deliveries is different. If you use your car as part of your work, tell your insurer before a claimAn insurance claim is a request you make to your insurance company for coverage after your car is damaged or you have an accident. You can file a claim online, by phone, or in writing. happens.
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. It amends the original policy and can increase or decrease coverage, change names or update addresses. on your personal auto policy.
Why do you need business use car insurance?
You need business use car insurance because work-related driving creates risks your personal policy may exclude. If you crash while using your car for business without the right coverage, your insurer can deny the claim. That will leave you paying for vehicle damage, injuries and legal costs yourself.
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 counts as business use of a car?
Business use of a car generally includes any driving done for work purposes beyond a normal commute, such as visiting clients, transporting goods, or earning income through driving services, and it requires additional or specialized insurance coverage.
Before you assume your personal auto policy covers a work trip, look at how the car is being used. The table below shows common driving situations and the type of coverage to ask about.
| Driving situation | Coverage needed |
|---|---|
| Driving to a regular workplace | Personal auto insurance |
| Driving to client meetings | Business use endorsement |
| Visiting job sites | Business use endorsement or commercial auto |
| Carrying work supplies or tools | Business use endorsement or commercial auto |
| Making food or package deliveries | Delivery or commercial auto coverage |
| Driving for Uber or Lyft | Rideshare insurance |
| Transporting passengers for pay | Rideshare or commercial auto |
| Using a vehicle owned by your business | Commercial auto insurance |
What type of car insurance policy do you need for business use?
For light business use, your personal policy needs a business-use endorsement. Delivery driving, rideshare work, transporting goods or people for pay, and business-owned vehicles may need commercial, rideshare or delivery-specific coverage.
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 how the car is used. Business use is an endorsement for personally owned vehicles used for both business and personal purposes. Commercial car insurance generally applies to vehicles used solely or mostly for business purposes. While it’s mainly used for company-owned vehicles, you can also buy a commercial policy on a personally owned vehicle.
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.
If you buy commercial car insurance for a car that is in your name and is used for both work and personal purposes, 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 auto insurer and explain exactly how you use your car for work. Ask whether a business use endorsement is enough or whether you need commercial, rideshare or delivery coverage. Then compare quotes from several insurers using the same business-use details and coverage limits.
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.
FAQ: Business use car insurance
Can I drive a company car without my own insurance?
Yes, if the company car is insured by the business and you are allowed to drive it under the company policy. Check the policy rules before using the car for personal errands because some company policies limit personal use.
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.
What happens if I use my car for business without telling my insurer?
Your insurer can deny a claim if your policy excludes the type of business driving you were doing. You could be responsible for repair costs, injury claims, property damage and legal costs. Your insurer may also cancel or not renew your policy.
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