Regardless of whether you have a long commute to your workplace or you drive around the job, you should know what sort of business use is covered by your personal auto policy – and when you really want to update your coverage or purchase a commercial policy. Let us break it down for you.
What sort of business driving can you do under your personal vehicle?
The rule is pretty straight forward. You can utilize your vehicle to get yourself to and from work or a meeting, but you can’t use your vehicle to do your work, unless you have the right insurance coverage. Assuming any part of your job requires you to drive (and wasn’t possible by somebody who takes the public transport to work, for instance), then, at that point, you’re possibly using your vehicle to do your job and wouldn’t normally be covered under your basic car insurance policy.
- What kinds of business use are excluded from basic personal auto insurance policies?
If you use your vehicle for any of the following types of services, you might need to update the coverages on your current policy or even buy a commercial car insurance policy:
- Carrying passengers for hire (including ridesharing platforms like Uber)
- Making deliveries that are a part for the business (e.g., delivering products like pizza, flowers, or alcohol; delivering rental equipment or merchandise; or delivering any materials as a part of services provided by a business)
- Emergency transportation (e.g., using your own vehicle as a tow truck)
- Leasing or renting your personal vehicle to others:
- Your insurance company may also exclude different sorts of business use from your personal policy.
- Personal vehicle used for other commercial purposes e.g. carrying tools and materials
- HVAC contractor
- Cargo deliveries
What insurance companies need to know?
Regardless of whether you’re simply using your vehicle to drive to and from work or meetings, you’ll have to disclose that to your insurance broker when you buy your policy. Whenever you apply for car insurance, you should reveal how many kilometers you drive each year, the distance of your commute to work, regardless of whether your vehicle is used for business or personal purposes, and the how much you use your vehicle for business (if at all). Make sure to update your broker if anything about your situation changes, regardless of whether you have a new commute or take on a job that requires you to use your vehicle.
What if I’m protected by the company I work for?
Even if a company provides insurance coverage to you while you’re driving for them, you actually need to inform your insurance provider that you’re using your personal vehicle for business purposes. If you drive with Uber in Ontario, Quebec, Alberta, Nova Scotia, New Brunswick, or Newfoundland, for example, you would be covered under the commercial insurance policy issued by Economical & Intact while you’re using the application, but you’re still responsible for letting your broker or insurer know you’re using your personal vehicle for ridesharing or delivery activities. If you don’t let your insurer know you’re using your personal vehicle for business purposes, you could risk a denied claim or a cancelled policy, even if the company you work for provides coverage while you’re driving for them.
What happens if you get into a collision while using your personal vehicle for business?
Assuming you get into an accident while using your personal vehicle for business purposes that aren’t covered by your policy, you’ll be on the hook to cover the damage in the event that the company you work for doesn’t have coverage that extends to you. In addition to a denied claim, your insurer could also cancel your policy for failure to disclose a material change, and you’ll need to shop for another policy before you can get back on the road. If your business activities are covered by your personal car insurance policy or by the company’s commercial insurance policy, then you should be safe.
Insurance is intended to safeguard you when you really want it the most, in exchange for your premium and the guarantee that you’ll stick to the arrangements in your policy. When you’re thinking about starting your own business or taking a new job that requires you to drive, the best plan is to contact your car insurance broker before you get behind the wheel. Your insurance broker can make sure you’ll have the coverage you need when you need it most.
Reach out to us for more information on this and we will help you covered under a proper coverage.
Here at Aaxel, we have numerous companies that provide proper coverage and helps you drive worry-free while ensuring your safety.