Does Commercial Auto Insurance Cover Personal Use?
Last Updated on August 31, 2020
If you drive your car for business purposes, then you might have commercial auto insurance. But does commercial auto insurance cover personal use? Or do you need to buy a separate personal use insurance policy?
Commercial auto insurance does not cover personal or leased vehicles by default. If your company has a commercial auto insurance policy, for example, then this policy will not extend to any personal vehicles you own.
However, if you have a commercial auto insurance policy on your own vehicle, then this policy will only cover your vehicle when driving for business purposes – but not personal reasons. You still need personal auto insurance on your vehicle. You 
would file a claim through your personal insurance policy – not your commercial policy.
Confused? That’s okay. Today, we’re explaining everything you need to know about how commercial auto insurance covers personal vehicle use.
Commercial Auto Insurance Policies Could Cover Personal Use
As a rule, a commercial auto insurance policy does not cover the personal use of a vehicle. Your commercial policy covers commercial use of that vehicle. If you want to drive a work vehicle for personal reasons, then you need to buy a personal policy for that vehicle or add language to your commercial auto insurance policy.
Let’s say your employer is a construction company that owns multiple company trucks. You drive the truck to the hardware store daily to pick up supplies, then drive it back to the job site. One day, you ask your boss to borrow the truck for a weekend road trip out of town. This is considered a personal trip – not a commercial trip. In this case, your trip is unlikely to be covered by basic commercial auto insurance. However, many commercial insurance policies have language that specifically covers personal trips outside of work – like personal trips on evenings or weekends. It’s possible your personal trip could be covered, although you need to check the declarations page for the appropriate coverage auto symbols first.
Or, some companies provide executives with company vehicles. The company has commercial insurance for these vehicles. This insurance covers the executives when driving for work, but it does not cover the executives when driving for personal reasons. Again, many companies adjust commercial auto insurance to cover personal trips, making this a non-issue.
In both these cases, there’s a ‘gap’ in coverage between commercial and personal use. The vehicle is only insured for commercial use – not personal use. To close this gap, you need to buy personal insurance coverage for the vehicle.
Any Car Used for Business Needs a Commercial Auto Insurance Policy
First, any car used for business purposes requires a commercial auto insurance policy. If you drive your car for business purposes and only have a personal auto insurance policy, then your insurer could deny your claim.
If you are a pizza delivery driver or an Uber Eats driver, for example, and you have an ordinary car insurance policy, then your policy will not cover you when delivering pizzas.
Similarly, if you are a pizza delivery driver and only have a commercial auto insurance policy, then this policy will not cover personal trips.
Many companies – including most pizza companies – have commercial lines auto insurance policies that extend to employees’ vehicles when employees are driving for work purposes. Pizza Hut has a commercial lines auto insurance policy that extends to delivery drivers, for example, as do Uber and Lyft.
Commercial auto insurance policies can cover:
- Your personal vehicle when driving it for work
- A vehicle owned by your employer and used by employees for work
- Vehicles owned by your employees when driven for work purposes
What happens when someone uses their business car for personal purposes? Does a commercial auto insurance policy continue to cover you when driving for personal reasons?
In this situation, commercial auto insurance can cover certain commercial cars when driven for personal reasons.
However, many commercial policies have conditions. These conditions may negate coverage when driving a commercial vehicle for work purposes. This can leave you with gaps in coverage.
When Do I Need Commercial Auto Insurance?
If driving your car for business purposes, you need to buy commercial auto insurance.
Commercial auto insurance may be required in all of the following situations:
- You use your vehicle to carry work equipment – like tools, documents, or deliveries
- You transport flammable or hazardous material
- You use your vehicle to carry, transport, or tow commercial equipment – like a plow or trailer
- You’re delivering any products or services, like pizzas or online packages
- You’re delivering newspapers using your vehicle
- You use your vehicle to transport people as a chauffeur, taxi driver, or rideshare driver
In some cases, basic commercial driving could be covered under a standard auto insurance policy – say, if you drop off mail for your company once a week and that’s it. In most cases, however, you need to buy a commercial auto insurance policy. If you’re unsure, contact your insurer and ask if you need a commercial auto insurance policy.
What Happens If Using Company Vehicles for Personal Trips?
If using company vehicles for personal trips, you should be covered. Most commercial auto insurance policies have language that allows coverage for basic personal trips – say, if using a company vehicle on evenings and weekends.
Check with your employer to verify coverage. In some cases, your employer may need to add language to the policy to ensure adequate coverage. Otherwise, any claims you make when driving the company vehicle for personal reasons could be denied.
What Happens If Using My Personal Vehicle for Commercial Trips?
Many companies ask individuals to periodically use their vehicles for commercial trips. You may be asked to deliver documents from one office to another, for example, or to pick up employees around town.
In this situation, your company’s commercial auto insurance policy should extend to your vehicle for commercial trips, while your personal auto insurance policy (your ordinary car insurance) will cover you during personal trips.
To be clear, you need both types of coverage on your personal vehicle: both a personal insurance policy and a commercial insurance policy. If your work does not extend commercial auto insurance towards employee vehicles, then you need to buy commercial auto insurance through your insurer.
When Does Commercial Auto Insurance Cover My Claim?
Your commercial auto insurance policy covers your claim when driving for business reasons. If you had a passenger in your vehicle while working for Uber, for example, then Uber’s commercial auto insurance policy should cover you. You make a claim through Uber’s commercial policy, and Uber covers the claim up to the limits of the policy.
If you were driving for personal reasons at the time of the incident, then it’s possible your commercial auto insurance policy still applies.
If you were driving a company vehicle, for example, then you would still file a claim through your company’s commercial auto insurance. After all, this may be the only auto insurance on the vehicle.
If you were driving your own vehicle for personal reasons at the time of the accident, then you would file a claim through your personal auto insurance policy – even if you have commercial auto insurance on that vehicle
Final Word on Personal Use and Commerical Auto Insurance
Commercial auto insurance coverage can get complicated, and claims can be messy.
What happens if you pick up supplies from work on the way to drop your kids off at school? This is where claims can become complicated.
Unfortunately, many drivers don’t clarify coverage until it’s too late. If you’re driving your personal vehicle for business purposes and don’t have appropriate coverage, then your insurer could deny your claim. You could run into similar issues when driving a commercial vehicle for personal purposes.
Generally, a commercial auto insurance plan will cover some personal trips – say, if you’re using a company vehicle on weekends and evenings for personal reasons. However, if you only have commercial auto insurance on your personal vehicle, then this is not considered sufficient coverage.
Confused about whether you’re covered? Talk to your insurance company. It’s better to clarify your commercial auto insurance coverage today than to wait until it’s too late.
