Here’s what you should know:
- Your personal car insurance can cover some business uses like errands and travel with the right endorsement.
- Such coverage usually requires a business use endorsement on your personal auto insurance policy.
- Business auto insurance may be required if your work use involves towing, transporting or deliveries.
- Business auto policies can provide higher coverage limits overall than personal policies with a business use endorsement.
Question I have a consulting business and use my car several times a week to meet with clients and vendors. Because these trips are related to my work, should I get business auto insurance?
Joel Brekken, a Farmers Insurance® agent in Duluth, Minnesota, explains the basic ways insurance works when personal vehicles are used for business.
Answer Many of my customers drive their own cars for business errands and appointments. Your personal auto insurance can cover you in these cases — provided you have an optional kind of coverage called a business use endorsement on your policy. Without it, you may not be covered if you have an accident while driving your car for business. Be sure to check your policy.
Some kinds of work-related driving aren’t covered by personal car insurance, even with the endorsement. If you are regularly transporting people or goods, making deliveries or towing trailers or other vehicles, you would need a business auto policy to have coverage. And you always need a business policy if you want to cover vehicles owned by the company, regardless of how you use them.
It’s important to know that business auto policies generally have higher coverage limits than personal policies. Even if your personal car insurance may cover your business use, you may still want a business policy for the higher limit. Your agent can help you so you can pick the right coverage for you and your business.
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