Whether or not your job explicitly requires you to "drive" for work, you probably use your personal car for work-related errands, deliveries or customer visits. So does your personal auto insurance policy cover you for accidents during business use of your car?
It might, but it might not.
Most Personal Auto Policies Exclude Business-Related Accidents, Subject to Exceptions
The general rule is that personal auto policies don't cover accidents that occur when the vehicle is being used for business purposes, other than farming or ranching. However, there are three common exceptions to this general rule. If you drive any of the following, then you're (often) covered:
- Private passenger auto
- Pickup or van
- Trailer used with either (1) or (2)
Exceptions to the Exceptions...
Though there are the above exceptions, there are exceptions to the exceptions that could mean you're back at Square 1 (uncovered).
Some personal auto policies may be more restrictive toward pickups or vans. This could possibly include a gross vehicle weight (GVW) limitation or a clause that restricts coverage to owned pickups or vans only. Be sure to consult your policy before driving any pickup or van for work.
Caution: Business Use of Personal Vehicles Doesn't Extend to These Categories
Know that any coverage permitted for business use of personal vehicles by a personal auto policy is not intended for these three vehicle categories:
- Commercial-type vehicles: Although box trucks, tractor trailers, shuttle buses and other commercial-type vehicles can be bought with personal funds for "personal use," these vehicles always require a commercial auto policy.
- Furnished or available for regular use ("company car" exclusion): A typical personal auto policy won't cover a vehicle that is regularly available to the policyholder, but is not specifically insured under the policy. If you're given a company car as an employment benefit, it should be covered by your employer's policy. If your employer won't insure the car, you need additional coverage under your personal auto policy.
- Vehicles that are the business: Personal auto policies don't cover vehicles used to carry people for a fee, like a taxi, limo or shuttle. The only exception is a share-the-expense car pool. And if you’re planning to make a few extra bucks delivering pizzas, auto parts, newspapers or other goods, proceed with caution. Many personal auto policies also remove coverage for vehicles that are used to deliver food or other types of property for a fee.
The Bottom Line
Personal auto policy coverage of a personal vehicle used for business purposes is tricky, to say the least. There are lots of exceptions and "maybes." There will be situations where the policy doesn't cover you, even when you think it should.
You might need additional coverage, or to extend your personal auto policy, and not know it. That's where your independent insurance agent comes in - to close potentially devastating gaps in your personal auto policy.