Whether you drive around on the job or have a long commute to the office, you should be aware whether the kind of business use is covered by your personal auto insurance policy, as well as at what point would you need to update your coverage or purchase a commercial automobile policy. Let us look at in more detail
What kind of business driving does your policy allow with your personal vehicle?
You can use your vehicle to get yourself to and from work or a meeting, but you can’t use your vehicle to do your work. If any part of your job requires you to drive (and couldn’t be done by someone who takes transit to work, for example), then you’re likely using your vehicle to do your job, and that would not typically be covered by a personal car insurance policy.
i.e. You can use your car to get yourself to and from work, but you can’t use your car to actually do your work.
What should I tell my Broker?
Even if you are just using your car to commute to work or meetings, you will need to inform your broker when you purchase your policy. When you apply for vehicle insurance, you will have to mention how many kilometres you drive each year, the distance of your daily commute to work, whether your vehicle is being used for business or personal purposes, and how often you use your vehicle for business (if at all). Be sure to let your broker know if anything about your situation changes, including the length of your daily commute.
What kind of business usage is not included in personal auto insurance coverage?
If you happen use your car for any of the following types of services, you probably need a commercial vehicle insurance policy:
- Making deliveries that are part of a business (for example, delivering pizza, flowers, or alcohol; delivering rental equipment or merchandise; or delivering any materials as part of services provided by a business)
Renting out your vehicle to others - Emergency transportation (e.g., using your personal vehicle as a tow truck)
- Renting out your vehicle to others
- Carrying any passengers for hire (including ridesharing programs like Uber and Lyft)
Your insurance carrier may also exclude other types of business use from personal car insurance policies. Reach out to your broker or carefully read through your own policy documents to learn more.
What happens in the situation where you get into a collision while using your personal vehicle for business?
If you are using your personal vehicle for business purposes which you haven’t previously disclosed to your broker, and which are not covered by your personal vehicle insurance policy, you may be on the hook to cover the damage if you get into a collision. In addition to having your claim denied, your policy could also be cancelled for an undisclosed material change in risk, and you will need to shop for another policy before you can get back on the road. If your business activities are covered by your personal vehicle insurance policy, then you should be safe.
If you are using your personal vehicle for business purposes that are not covered by your policy, you’ll be responsible to cover the damage if you get into a collision.
Insurance is designed to protect you when you need it, in exchange for your premium payment and the commitment that you will stick to the agreements within your policy. If you are thinking about starting your own business or taking a new job that requires you to drive, the best plan is to contact us at Aaxel before you get behind the wheel. Your insurance broker will make sure you’ll have the right coverage you need when you need it most.
