Can You Use Your Personal Vehicle For Business?

Having the appropriate vehicle insurance coverage is important. When you are looking for vehicle insurance, you will have to make your insurance broker aware of: how many kilometres you drive per year, the distance of your commute to work, and if your vehicle is for personal or business purposes. It is important to understand the difference between personal and commercial vehicle insurance coverage to ensure you are not leaving yourself vulnerable to a potential loss.

So, are you covered by your personal vehicle insurance policy, or are you in need of purchasing a commercial policy?

What is covered by a personal auto insurance policy?

Generally, driving to and from work will be covered under your personal vehicle insurance policy. If you are required to use your vehicle for your job, that is typically not covered under personal vehicle insurance policies. For example, if you recently started working for Uber, you should think about purchasing a commercial policy.

Personal use of a car can include:

  • Driving to a from work
  • Some business use. For example, a real estate agent driving to and from listings.
What is covered by a commercial vehicle insurance policy?

This is of course depends on the coverage you have chosen, but essentially commercial vehicle insurance covers the same as personal vehicle insurance:

  • Collision Coverage (optional). This will cover the cost of damage to your vehicle from an accident.
  • Comprehensive Coverage (optional). This will cover the cost of damages to your vehicle from vandalism, theft, glass breakage, etc.
  • Liability Coverage (mandatory). This will protect you in the case of injury to another person or damage to someone’s property due to an accident.
  • Accident Benefits (mandatory). This will cover the cost of immediate medical treatment for you or your passengers.

Optional additional coverage can include:

  • Loss of Use
  • Waiver of Depreciation
  • Accident Forgiveness  
What is not covered by a commercial vehicle insurance policy?

It is important to know what is not covered under a commercial vehicle insurance policy so you are not left at risk of potential loss.

  • Tools or equipment in or on your vehicle.
  • Materials or merchandise in or on your vehicle.
  • Personal items in or on your vehicle.
  • Lost business revenue.
What if I am covered by the company I work for?

This will never be the case! Your automobile insurance is the only insurance you have for your vehicle. Someone else can not extend or provide coverage to your vehicle or vehicle use. If you are using your vehicle for business use for an employer it is important to discuss this with your insurance broker.

Do I need commercial vehicle insurance?

Here are some questions you can ask yourself to help figure out if you need commercial auto insurance:

  • Do I carry tools or equipment for work?
  • Do I carry passengers and get paid for doing so?
  • Do I carry or deliver items for work?
  • Is the vehicle registered in a company name?
  • Do I visit job sites and clients locations regularly?
  • Is the vehicle capacity 1 ton or more?

If the answer to any of the above is YES, it is very likely you require commercial insurance for your vehicle.

It is important to let your insurance broker know how you are using your vehicle so they can make sure you are insured properly with the best insurance company that fits your needs. Each insurance company has it’s own guidelines as to how they classify vehicle use and subsequently if it should be insured as a personal vehicle or a commercial vehicle. Not disclosing how a vehicle is being used can certainly have consequences in the event of a claim, maintaining your insurance policy, or obtaining a new policy if yours has been cancelled by an insurance company.

In many cases the premium for a ‘general commercial’ use vehicle is very close to the premium for a personal use vehicle, sometimes cheaper! 

Insurance is here to protect you when you need it most. If you have any questions contact a broker to learn more, or fill out an online quote form.