Here's a breakdown of whether you can use your personal vehicle for business, as shown by a man putting packages in his trunk

Whether you have a long commute to the office or drive around on the job, you should know what kind of business use is covered by your personal auto insurance policy — and at what point you need to update your coverage or purchase a commercial policy. Let us break it down for you.

What kind of business driving can you do with your personal vehicle?

The general rule of thumb is pretty straightforward: you can use your vehicle to get yourself to and from work or a meeting, but you can’t use your vehicle to do your work unless you have the right insurance coverage. If any aspect of your job requires you to drive (and couldn’t be done by someone who takes the bus to work, for example), then you’re probably using your vehicle to do your job — and that wouldn’t typically be covered by a basic personal car insurance policy.

The general rule of thumb is pretty straightforward: you can use your vehicle to get yourself to and from work, but you can’t use your vehicle to do your work unless you have the right insurance coverage.

What types of business use aren’t included in basic personal auto insurance policies?

If you use your vehicle for any of the following types of services, you may need to update the coverage on your personal car insurance policy and notify your insurance broker, or purchase a commercial car insurance policy:

  • Carrying passengers for hire (including ridesharing programs like Uber)
  • Making deliveries that are part of a business (e.g., delivering goods like pizza, flowers, or alcohol; delivering rental equipment or merchandise; or delivering any materials as part of services provided by a business)
  • Emergency transportation (e.g., using your personal vehicle as a tow truck)
  • Renting out your vehicle to others (including carsharing programs like Turo)

Your insurance company may also exclude other types of business use from personal car insurance policies. Reach out to your broker or carefully read through your own policy documents to learn more.

What does my insurance company need to know?

Even if you’re just using your vehicle to commute to and from work or meetings, you’ll need to disclose that to your insurance company when you buy your policy. When you apply for car insurance, you will have to disclose how many kilometres you drive per year, the distance of your commute to work, whether your vehicle is used for business or personal purposes, and how much you use your vehicle for business (if at all). Be sure to let your broker know if anything about your situation changes, whether you have a new commute or take on a job that requires you to use your vehicle.

What if I’m protected by the company I work for?

Even if a company provides insurance coverage for you while you’re driving for them, you still need to let your insurer know you’re using your personal vehicle for business purposes. If you participate in rideshare, delivery, or carshare services with Uber or Turo for example, you would be protected under the commercial insurance policy issued by Economical while you’re using the app depending on what province or territory you’re located in. It’s important to know that you’re still responsible for letting your broker or insurer know you’re using your personal vehicle for ridesharing, carsharing, or delivery services. If you don’t let your insurer know you’re using your personal vehicle for business purposes, you could risk a denied claim or a cancelled policy, even if the company you work for provides coverage while you’re driving for them.

Do you use your car for ridesharing, delivery, or carsharing services, like Uber or Turo? Let your broker know to make sure you have the personal car insurance you need before you get behind the wheel.

What happens if you get into a collision while using your personal vehicle for business?

If you get into a collision while you’re using your personal vehicle for business purposes that aren’t covered by your policy, you’ll be on the hook to cover the damage if the company you work for doesn’t have coverage that extends to you. Your insurer also may not cover you if you’re sued for damages or injuries you’re at-fault for. In addition to a denied claim, your insurer could also cancel your policy for failure to disclose a material change, and you’ll need to shop for another policy before you can get back on the road. If your business activities are covered by your personal car insurance policy or by the company’s commercial insurance policy, then you should be safe.

If you’re using your personal vehicle for business purposes that aren’t covered by your policy, you’ll be on the hook to cover the damage if you get into a collision.

Insurance is designed to protect you when you need it most, in exchange for your premium and the promise that you’ll stick to the agreements in your policy. When you’re thinking about starting your own business or taking a new job that requires you to drive, the best plan is to contact your car insurance broker before you get behind the wheel. Your insurance broker can make sure you’ll have the coverage you need when you need it most.

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