Business Use of Your Personal Auto

Many people use their personal autos in business, from running a work-related errand to making sales calls on a daily basis. Employers often reimburse employees for expenses, but they expect the employee to maintain personal auto insurance. However, the personal auto policy is not intended to cover business operations and so it is important to know how your personal auto policy addresses a business exposure. Every insurer’s policy is different, so be sure to consult your own policy for business exclusions and limitations.

Most personal auto policies exclude business use, but then make an exception for private passenger autos that are scheduled on the policy. Your insurer or broker will ask about the use of your auto—pleasure, commuting, or business use. You may surcharged for regular business use if you are a realtor or company rep who drives as a part of your work responsibilities. Occasional business use, such as picking up a supply on your lunch hour or driving to a work-related event—are not considered regular business use.

While most policies make an exception for private passenger autos, there are still some specific, important exclusions that apply. Typical exclusions include:

• Autos used for public hire or transportation. The exclusion applies to ride-sharing programs such as Uber and Lyft. Carpooling to share expenses is not excluded. (Be sure to advise your broker if you drive for a ride sharing company; you will need to obtain coverage for your personal use that coordinates with the ride-sharing company’s coverage.)
• Pickup trucks and mini-vans are considered personal autos, but pickups and vans used for business purposes are usually excluded. Specific types of trucks—such as flat beds, stake trucks, dump trucks, and snowplows—may also be specifically excluded. These exclusions are intended for contractors who use their personally owned trucks in their business. More appropriate coverage is available through a business auto policy.
• Autos that are used in an auto-related business, including selling, repairing, servicing, storing, and parking autos. More appropriate coverage is available through a business policy.
• Autos used for delivery or transportation. This includes food and package deliveries. Contact your broker if you have this exposure to see if your personal auto policy excludes coverage.

If your auto policy covers your business use, confirm that your excess liability (umbrella) policy also provides business use coverage. Excess liability policies usually have an exclusion for business operations, but make an exception for personal autos that are covered on your personal auto policy. Other excess liability exclusions—including public hire, ride sharing, commercial size/type trucks, and auto dealership/service business use—typically follow the personal auto policy exclusions.

Since policy language and exclusions vary by carrier, your best protection is to talk with your broker to confirm that you have adequate business use protection on both your auto and excess liability policies. Our Account Advisors are happy to answer any questions you may have.

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