We often hear this question: Is it okay to use my personal vehicle for my business? Most auto insurance policies exclude driving a personal auto for business purposes. Yes, you can still do it, but in the case of a loss or accident, many companies will deny the claim and cancel your policy if they discover how you are using your vehicle. The use of your vehicle is important to the insurance company because of the risk involved. Commercial auto coverage typically is more expensive because you are at risk for higher liability and property damage claims. If your business owns vehicles and they are titled in the company’s name, your commercial vehicles need business car insurance for complete coverage. If you are a business owner with no employees, and you use your vehicle driving to and from work, a personal auto policy will cover you in most cases.
Here are a couple of examples:
Many insurance companies will not allow pizza delivery on a personal auto policy. Instead, the driver needs a commercial auto policy for the proper coverage. Ride-share drivers and messengers should also make certain that they are covered correctly. Uber and Lyft have good coverage but only when there is a paying passenger in the vehicle. When that same car has no passenger and it is on its way to pick up another, the insured’s personal auto coverage should kick in. Some companies require a business use endorsement. The wise move is to talk to your insurance agent to make certain you are insured correctly because insurers vary from company to company.
This is another question we hear: May I let someone borrow my car?
The general rule is that auto insurance coverage follows the car, not the driver. If you are loaning your vehicle on a regular basis to your best friend, many companies require that your friend be listed as a driver on your personal auto policy. If you loan your car to a friend just once every six weeks, most companies do not have an issue with that. But you need to remember the insurance implications when allowing someone to borrow your car. That potential accident will follow the auto, not the friend borrowing your car.
One more question: If I am not driving for a few months should I cancel my insurance and then pick it up again later?
Any lapse in coverage brings higher rates. Period. It might be tempting to let your insurance go for a while. Maybe your car is in the shop and not drivable or money is tight. It might seem like a good idea to cancel your car insurance, but it rarely is. An insurance company considers “uncovered” drivers a higher risk than those who diligently keep their insurance in place without lapses in coverage. So, the best decision is to keep your insurance in place. Contact your agent to be an advocate on your behalf if you have questions or unusual circumstances, because every company is different.