Does My Personal Auto Policy Cover My Vehicle if I Use it For My Business?

Say you’ve just started a lawn maintenance business. You drive your personal pickup truck to get to and from clients and pull a trailer with all of your maintenance equipment. On the way to a client, you take too sharp of a turn and sideswipe a parked car. Does your personal auto insurance cover this?

In situations like these, it’s likely that your personal auto insurance policy won’t cover you. Personal auto insurance doesn’t cover accidents that occur while the insured vehicle is being sued for profit. This doesn’t mean simply commuting back and forth from work, however. If you only commute without using your vehicle for anything else work-related, your personal policy should cover you. In cases like the above, where you are the businessowner using a personal vehicle to transport equipment, you will need commercial auto insurance.

  • Commercial auto insurance offers a lot of the same coverages as personal auto insurance:
  • Comprehensive Coverage covers incidents involving fire, wind, hail, theft, vandalism and more.
  • Collision Coverage covers incidents involving a collision with another vehicle or object.
  • Uninsured/Underinsured Motorist steps in if the other motorist in an accident doesn’t carry an adequate amount of insurance.
  • Liability covers both bodily injury and property damage that the driver causes to someone else. It can also help with legal fees if the victim sues.
  • Medical Expense Coverage covers medical bills for the driver and passengers if they are injured in an accident, no matter who’s at fault.

In fact, if your company owns or uses vehicles, you may be required to carry commercial auto insurance by the state. Idaho requires businesses with commercial vehicles to carry:

  • $25,000 in bodily injury liability per person
  • $50,000 in bodily injury liability per accident
  • $15,000 in property damage liability

There are some instances where the business may not own a vehicle it uses. For example, if an employee in your lawn maintenance business uses their personal vehicle to travel and transport equipment, you will need additional coverage called hired and non-owned auto insurance. This coverage provides liability for vehicles used but not owned by the business.

Does a Commercial Auto Insurance Policy Cover Personal Use? 

Don’t worry about having to juggle two policies for one vehicle. You can extend your commercial auto insurance policy to cover personal use for your vehicle.

FAQ’s About Does My Personal Auto Policy Cover My Vehicle if I Use it For My Business?

Does my personal auto insurance policy cover business use of my vehicle?

Personal auto insurance policies typically do not extend coverage to business use of a vehicle. It’s important to check with your insurance provider as you may need a commercial auto insurance policy to adequately cover your vehicle for business-related activities.

Can I use my personal vehicle for business errands under my personal auto policy?

Using your personal vehicle for occasional business errands might be covered under your personal auto policy, but this varies by insurer and policy. Regular business use will likely require a commercial policy.

What is the difference between personal and commercial auto insurance?

Personal auto insurance covers personal driving, such as commuting and personal trips, while commercial auto insurance covers vehicles used for business purposes, offering broader liability and additional coverages pertinent to business operations.

How do I know if I need commercial auto insurance?

If you use your vehicle primarily for business purposes, transport goods or people for a fee, or require higher liability limits due to business risk, you likely need commercial auto insurance.

Will my personal auto policy cover me if I occasionally deliver goods for my business?

Occasional delivery of goods might not be covered under a personal auto policy. It’s essential to inform your insurer about how you use your vehicle to determine if you need commercial coverage.

Are there any exceptions where my personal auto policy would cover business use?

Some insurers may offer limited coverage for business use under a personal auto policy, but this is not standard. Always check with your insurer for any exceptions or endorsements that might cover occasional business use.

What if I’m self-employed and use my car for both personal and business purposes?

If you’re self-employed and use your vehicle for both purposes, you should discuss your usage with your insurance provider. They may recommend a commercial policy or a personal policy with a business-use endorsement.

Does my personal auto insurance policy cover me if I’m driving for a rideshare company?

Personal auto insurance policies typically exclude coverage when driving for a rideshare company. Rideshare companies usually offer some insurance, but you may need additional rideshare-specific coverage or a commercial policy to be fully protected.

Will my personal auto insurance cover business equipment in my vehicle?

Personal auto insurance generally does not cover business equipment in your vehicle. For such coverage, you would need a commercial policy or a specific endorsement to protect against damage or theft of business property.

What should I do if my current personal auto policy does not cover my business usage?

If your personal auto policy does not cover your business usage, you should contact your insurance agent to discuss obtaining a commercial auto insurance policy or finding out if there are endorsements available to cover your specific business needs. It’s important to have the right coverage to avoid gaps that could leave you financially vulnerable in the event of an accident or loss.

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