Using your personal car for business, ridesharing or food delivery
Sometimes, car insurance can get a little tricky. With the recent popularity of ridesharing and food delivery apps like Uber and UberEats, the rules for using your car for business have become pretty complex. The good news is, we’re here to help explain what is and isn’t covered when it comes to using your car for business. We also want to make sure you have the right coverage to suit your needs.

What type of business use is allowed on a personal auto policy?

Your personal auto policy can include some business driving – but generally, it’s very limited. If you’re commuting to work, you’ll likely be covered. Same if you’re travelling between different work locations or driving to the occasional client meeting. Look at it this way – using your car to get to work is usually okay. But if you’re using your car to do your work, most personal insurers won’t cover you without a special endorsement (and if they provide this coverage at all, it will cost you more). You might even need a commercial policy. Read through your policy to make sure you have the proper coverage in place. And, contact your insurer if you have any questions.

Does a personal auto policy cover ridesharing services like Uber or Lyft? And does it cover driving for food delivery services like UberEats or Skip the Dishes?

In short, no. Carrying passengers for hire and making deliveries for services like Uber and UberEats are rarely covered under a standard auto policy. The reason why ridesharing and doing deliveries often isn’t covered under a personal policy is simple: you’re driving a lot more, so there’s a much higher chance of getting into an accident and filing a claim. But, most drivers aren’t aware when their personal auto policy doesn’t cover them for this type of business. They also might not know that they have to notify their insurer to inform them that there’s been a change in the way they use their vehicle.

The fact is, no matter what, you always need to inform your insurer if you plan to work for (or even start your own) ridesharing or food delivery service. They’ll let you know if you need a commercial auto policy. Some companies do provide limited insurance for their drivers. Or, you might need to buy a special endorsement (if your insurer offers this).

What other business use isn’t covered by a personal auto policy?

If you use your car for any of the below activities, it’s probably not covered by your personal auto policy. Like ridesharing or food delivery, you may need to purchase a commercial auto policy or add an endorsement.

  • Transporting materials for a business. If part of your job is carrying stock or machinery used for work in your car, your policy probably won’t cover you. This includes carrying materials to be installed (like drywall, or a bathroom sink).

  • Delivering food or products for a business. Using your personal car to deliver for a pizzeria or flower shop, for example, is considered commercial use. You’ll likely need a commercial policy to ensure you’re fully covered.

  • Emergency transportation. Any type of emergency driving with your personal vehicle (like using your truck to tow others) usually isn’t allowed.

  • Renting your car to others. Most personal insurers won’t allow you to rent out your personal car for pay. This includes renting through companies like Turo. Talk to your provider if this is something you think you might like to do. If you lend (but don’t rent) your car often, find out more about what happens when someone borrows your car.

    What happens if I get in an accident when using my car for business?

    As long as the way you use your car – like for a daily commute – is approved by your insurer, you should be covered if you’re in an accident.

    If you get into a collision while driving for business reasons that you haven’t disclosed to your insurer – and aren’t covered for by your policy – there could be some serious consequences. First, they may reserve the right to deny the claim. This means you’d be paying out of pocket to repair or replace your car. You could also be found liable if any passengers are injured and you’d have to pay for that too, if you’re sued. Second, your policy could also be cancelled for failure to disclose a material change. Not only will it be much harder to get a policy elsewhere if this happens, you’ll also end up paying more once you do find a new insurer.

    Did you know? When it comes to car insurance, a material change is a change in your driving situation that would impact if you’re eligible for coverage, the coverage you need or the premium charged. Examples of material changes can include if you start to to drive for Uber, or if you move from one house to another. You must tell your insurer when a material change happens. If you don’t, your policy could be cancelled.

    The bottom line? Always tell your insurer when there’s been a change in the way you use your car. That way, if you ever have to make a claim, you can be sure that you’re covered. When in doubt, it’s best to review your policy with your insurer directly to find out exactly what coverage you need.


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