Commercial auto insurance vs personal auto insurance

With the advent of companies like Uber and Lyft, the lines between a personal car and a company car have blurred. If you use your personal car for work, or use a company car ‘off the clock’ the insurance coverage you have might not be enough to protect you from financial liability.

If you’re using a car for both personal and commercial use, it’s always best to check with your insurance agent to ensure you have the right coverage, but it’s also good to have a basic understanding of how the two different auto insurance policies work.

What is commercial auto insurance?

Commercial car insurance works differently than personal car insurance. Where your personal policy will list you as the primary, and typically cover other drivers in your household, a commercial policy does not. It typically lists the business as the primary insurance holder with any drivers attached as permissive users. Coverage typically only includes using the car for business purposes. This includes serving as a rideshare or food deliverer.

Using a personal car commercially

Your personal car is one you’ve bought, you’ve insured and you use as needed for your daily life. Your name is on the car’s title.

There are specific insurance requirements for personal cars based on state minimums for coverage, but many people opt for additional coverage to fully protect themselves. Even with these requirements, it is legal to use your personal vehicle for business purposes, although it’s not guaranteed your personal auto insurance will cover you in an accident if your car is in use commercially.

Some policies may specifically state that you’re not covered if using your vehicle for business purposes; others can set limitations on coverage making it challenging if you are in an accident. This is why it’s essential you reach out to your insurance company before using your personal car commercially if you’ll be relying on your personal auto insurance to protect you.

The risk of not confirming coverage, then getting into an accident that isn’t covered, is financially very high. You’ll end up paying out-of-pocket for any legal, medical or repair costs.

Adding commercial coverage to your personal vehicle

The best way to protect yourself and your car in the case of an accident if the car is being used both personally and professionally is to have a secondary policy. This is how it works with companies like Uber and Lyft. They provide coverage while you’re driving for them, but when the meter isn’t running, your personal auto policy kicks in. This allows you to hold sufficient coverage regardless of how you’re using your car.

Not every company that allows you to use your personal vehicle for work may offer this option, so again, check with your personal auto insurance company for clarification before you use your own car to transport goods (or people) for business purposes.

Driving your company car after hours

It’s up to your employer to decide when it’s okay to use your company car. If they allow you to drive it when you’re not on the clock, you’ll need to check with your personal insurance provider and the company’s provider to understand your coverage. You may need to get a secondary policy on the company car to protect you from any liability in a car accident that occurs after hours.

What’s important to remember here is that you do not own your company car. You must adhere to the rules and limitations of use set by your employer not only to ensure you’ve got the right coverage when driving, but also so you’re not needlessly putting yourself into a precarious position if in a car accident. The last thing you want to do is end up having to pay for damages yourself while being reprimanded (or worse) by your employer.

How to handle a car accident no matter what

Ensuring you have the right coverage no matter what the situation you’re in is essential to protecting yourself should you end up in a car accident. Even if not at fault, you want to be properly covered to get the compensation you need from your own insurance company.

Should a car accident occur in this gray area of car use, another integral part of the process is reaching out to a knowledgeable car accident attorney. They’ll help you navigate the complex details of your accident in situations that are less common—if you were driving your company car on a Saturday to go to the grocery or you were using your personal car to deliver UberEats.

The team at Watson Injury Law is well-versed with these scenarios and others like this when it comes to personal injury and property damage from a car accident. They’ll focus on the specifics of your accident to help you get the compensation you deserve, guiding you along the way as to the best course of action. Should you need legal representation after a car accident, reach out to Watson Injury Law to set up a free consultation today.

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