Recently, I came across an article, “15 Things You Need To Know About Buying Auto Insurance – Consumerist“, that talked about auto insurance and how people don’t realize that their auto insurance won’t cover them in certain situations, such as when they have a new teen aged driver in the family, or if they lend someone their car for the long-term, where the car is kept at that other person’s residence. There were other situations listed also, and I knew about them all and knew not to put myself in any of them…except one.
It was situation # 12 listed in the article, about business use of your car. Sure, I did know that if I had started my own delivery or taxi business using my own car, that I’d need special additional insurance for my car, but I didn’t know that taking a simple delivery job, such as delivering meals part-time, or free publications to businesses part-time, fell into this situation also.
But, this article, and another one on Yahoo that I can no longer find, led me to thinking. I decided to go to my insurance agent’s office the very next business day, to really find out if this applied to me or not. Here’s what I found:
1. Your car is not considered to be used for business if you report to a work place and the car is parked for your entire work day. And you’re still covered if you run the occasional errand for your employer.
2. If you use a company vehicle for work, your company covers you. (But always double-check first!)
3. If you don’t report to an actual building and you drive to where you work, such as going to client’s homes or businesses, even if you don’t drive from client to client, then your car is considered by the insurance company to be used for business.
And it doesn’t matter if you are an employee, independent contractor, or any other work status! So, even if you get a job as a simple pizza delivery person, or a free publication delivery person, or even to distribute fliers door to door as I do, you need to check your policy first!
As an example, I distribute fliers door to door. I go straight from my home to the neighborhood where I will distribute the fliers by walking door to door. Yet, even though I do not drive from house to house but merely drive from home to the neighborhood, the insurance company still considers my car as being used for business.
4. If you plan on transporting people or hazardous materials, you absolutely need to check with your insurer and will most likely need a special commercial policy in addition to the one you now have. And yes, if you plan on driving for Uber or Lyft, or anything similar ride service where you use your own car, you would most likely need that special commercial policy.
So, the bad news was that my policy would not cover me if I was at fault in an accident during my working hours!
The good news was, I didn’t need a special commercial policy since I wasn’t transporting people or hazardous materials. And adding the business coverage I needed only added $9 to my 6 month premium! A very good price to pay to avoid a huge shock and disaster should I have an accident while working!
Unfortunately, many people don’t know where pleasure use ends and business use begins for their cars, and many insurers don’t make this very clear, if at all.
So, if you haven’t used your car for business and are planning to, or if you’re not sure whether or not you’re currently using your car for business, check with your insurer! It could prevent a lot of shock and heartache!
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