Why personal car insurance may not cover business use

Allegiance Insurance Group S.C 

1/20/2023

Personal auto insurance is required in almost every state, but your policy may not cover damages from accidents that happen while you or your employees use your personal vehicles for work. That’s why most states require small business owners with company-owned vehicles to insure them with a Business & Commercial policy.

Insurers view business drivers as greater risks because they are on the road more often than other motorists. A consultant who drives to several client offices every week is more likely to have an accident than one who drives to and from work once a day.

If you or your employees drive company-owned vehicles, your business likely needs commercial auto insurance coverage. If you use your personal vehicles for work purposes like business errands, deliveries, or client meetings, you may need hired and non owned vehicle insurance, (HNOA).

Insurance companies consider several factors when assessing driver risk:

These factors determine if the insurance company will cover you and how much your premiums will cost.

Commercial auto insurance vs. hired and non-owned auto insurance

If you drive your personal vehicle for work purposes occasionally, your personal insurance carrier might be able to tailor your policy to accommodate your needs. If you drive for work on a regular basis, consider adding commercial auto insurance or hired and non-owned auto insurance.

The type of insurance your business needs depends on who owns the vehicle and what it’s used for.

Personal liability auto insurance is required in nearly every state. It pays for the costs of repairs to other drivers’ cars or other property if you cause an accident in your personal vehicle. It also covers medical bills for third-party injuries.

Your Commercial Auto Insurance policy may also include collision or comprehensive coverage, which can pay for repairing your vehicle and medical bills after an accident. It may also cover things like theft, vandalism, or storm damage.

A personal auto policy would not cover you for accidents and lawsuits related to any business use of your vehicle, such as making deliveries or hauling equipment to a job site.

Just one accident while driving on business in a personal or hired vehicle can wind up costing your business thousands of dollars.

If you drive your personal vehicle for work purposes occasionally, your personal insurance carrier might be able to tailor your policy to accommodate your needs. If you drive for work on a regular basis, consider adding commercial auto insurance or hired and non-owned auto insurance.

The type of insurance your business needs depends on who owns the vehicle and what it’s used for.

Personal liability auto insurance is required in nearly every state. It pays for the costs of repairs to other drivers’ cars or other property if you cause an accident in your personal vehicle. It also covers medical bills for third-party injuries.

Your policy may also include collision or comprehensive coverage, which can pay for repairing your vehicle and medical bills after an accident. It may also cover things like theft, vandalism, or storm damage.

A personal auto policy would not cover you for accidents and lawsuits related to any business use of your vehicle, such as deliveries or hauling equipment to a job site.

Just one accident while driving on business in a personal or hired vehicle can wind up costing your business thousands of dollars.

Commercial auto insurance protects your business from the costs of accidents in your company-owned vehicles. Like personal auto insurance, it is typically required by law and can be purchased as auto liability coverage only, or with collision or comprehensive coverage. It covers any of your employees who have your permission to use the company vehicle.

Almost every state requires commercial auto insurance for businesses that have vehicles titled to the company and employees that drive to job sites. Businesses that transport work equipment or employees and clients via company-owned vehicles may also need to purchase commercial auto insurance coverage.

Hired and non-owned auto insurance covers the costs of a lawsuit over an accident you or your employee caused while driving a personal, rented, or leased vehicle on business. This includes employees who use their own cars to run work-related errands or rent cars for business trips.

Just one accident while driving on business in a personal or hired vehicle can wind up costing your business thousands of dollars – far more than the expense of putting additional coverage on your company car.

Cleaning services and food delivery are just a few of the businesses that may need HNOA coverage, but any business that regularly – or even occasionally – uses personal vehicles for work should consider HNOA coverage.

If you or your employees drive your personal vehicles for any of the following purposes, you should consider an HNOA policy:

HNOA covers the following costs if you or an employee cause an accident driving a personal, rented, or leased vehicle for business use:

Typically, HNOA will supplement any coverage from a personal auto policy. For example, if you’re visiting a client and are responsible for an accident, your personal auto insurance may cover the costs to repair your own vehicle.

HNOA won't cover damage to your own property – only third-party liability costs. If you’re sued for causing damage to vehicles, property, or injury to others, your HNOA policy would pay the costs of legal fees, judgments, or settlements.

 protects your business from the costs of accidents in your company-owned vehicles. Like personal auto insurance, it is typically required by state law and can be purchased as auto liability coverage only, or with collision or comprehensive coverage. It covers any of your employees who have your permission to use the company vehicle.

Almost every state requires commercial auto insurance for businesses that have vehicles titled to the company and employees that drive to job sites. Businesses that transport work equipment or employees and clients via company-owned vehicles may also need to purchase commercial auto insurance coverage.

Hired and non-owned auto insurance covers the costs of a lawsuit over an accident you or your employee caused while driving a personal, rented, or leased vehicle on business. This includes employees who use their own cars to run work-related errands or rent cars for business trips.

Just one accident while driving on business in a personal or hired vehicle can wind up costing your business thousands of dollars – far more than the expense of putting additional coverage on your company car.

Food service companies, cleaning services, and construction trade are just a few of the businesses that may need HNOA coverage, but any business that regularly – or even occasionally – uses personal vehicles for work should consider HNOA coverage.

If you or your employees drive your personal vehicles for any of the following purposes, you should consider an HNOA policy:

HNOA covers the following costs if you or an employee cause an accident driving a personal, rented, or leased vehicle for business use:

Typically, HNOA will supplement any coverage from a personal auto policy. For example, if you’re visiting a client and are responsible for an accident, your personal auto insurance may cover the costs to repair your own vehicle.

HNOA won't cover damage to your own property – only third-party liability costs. If you’re sued for causing damage to vehicles, property, or injury to others, your HNOA policy would pay the costs of legal fees, judgments, or settlements.

 www.AIGSC.com Commercial Auto Insurance