Do You Need Special Insurance Coverage to Use your Car for Work?

Yes, you will need special insurance coverage to use your car for work purposes. Your employer may purchase employer non-owner car insurance policy to cover their employees, or you will be responsible for finding your own commercial car insurance policy. Uber and Lyft drivers will need a unique rideshare auto insurance policy. Read our guide for more information on the special insurance coverage you need to use your car for work. You can even start comparing commercial auto insurance quotes with our free comparison tool below.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Written by Rachel Bodine
Insurance Feature Writer Rachel Bodine

Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years Leslie Kasperowicz

UPDATED: Mar 11, 2022

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Many Americans occasionally use their cars for work. You might pick up items from one office and take them to another, for example. Or, maybe you moonlight as an Uber driver. Whatever the situation may be, you need to ensure you have the right car insurance.

Do you need special car insurance to use your vehicle for work? Will your personal car insurance policy cover you when delivering things or driving for work? Today, we’re answering all your questions about how car insurance works when using your car for work.

Yes, You Need Special Insurance When Using your Car for Work

If you use your car for work, then it will not be covered by your personal car insurance for the duration of your ‘work’ ride. An ordinary personal car insurance policy does not cover any types of commercial driving activities.

Let’s say your boss tells you to take a package to another office across town. You’re looking down at your phone and crash into the bumper of a car in front of you. The accident is 100% your fault. You have collision insurance and liability insurance, so you assume the incident is fully covered.

Unfortunately, your car insurance company could deny this claim because you were not driving the car for personal purposes: you were driving the car for commercial purposes. It was a work trip – not a personal trip.

Car insurance companies aren’t being greedy here. Instead, their personal car insurance policies are priced with the assumption that you use your car for a certain number of average miles per day. If you use your car for commercial purposes, then you may use it throughout the day more frequently, increasing your chances of getting into an accident and making a claim.

For all of these reasons, you will need special car insurance when using your car for work purposes.

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Types of Car Insurance Available for Work Vehicles

If you use your vehicle for work – even if it’s just once or twice a month – then you should make sure you have adequate car insurance coverage.

If you get into an accident while driving your vehicle for work purposes, and you only have personal car insurance, then you could be required to pay for all medical bills, vehicle damage, and other costs out of pocket.

Types of car insurance available for work vehicles include:

Employer Non-Owner Car Insurance

Some employers – particularly larger corporations or companies that employ delivery drivers – will purchase non-owner car insurance policies. This car insurance covers employees while driving their own personal vehicles for work. Many large pizza chains, for example, extend this type of insurance to their delivery drivers. Talk to your employer to determine if you have non-owner car insurance.

Commercial Car Insurance Policies

If you do not get car insurance through your employer, then you may wish to buy your own commercial car insurance policy. Most major car insurance companies offer commercial car insurance. If you already have car insurance, then you should be able to contact your insurer to add commercial coverage. Prices are typically reasonable. You’re paying a few extra dollars per month to ensure you’re fully covered while driving your vehicle for any work purposes.

Special Customized Insurance Policies for Rideshare Drivers and More

Today, many delivery drivers aren’t employees: they’re independent contractors working for corporations like Uber and Amazon. In this situation, you may not have any type of insurance coverage through your employer. However, a growing number of car insurance companies now offer specialized insurance specifically for Uber drivers, independent delivery drivers, and other professionals. These insurance policies are often grouped under categories like ‘rideshare insurance’. Talk to your insurer to see if they have special custom commercial coverage policies for drivers like you.

Do You Need Commercial Car Insurance?

Here are some things to consider when deciding between commercial and personal car insurance:

Who owns and drives the vehicle? If the vehicle is owned by a business, then you most likely need commercial car insurance. However, if you’re a sole proprietor, then you might only need a personal car insurance policy.

How is the vehicle used? You will need a commercial car insurance policy if using your vehicle for business purposes. However, if you are a sole proprietor who only visits one or two job sites per day, or if you exclusively use your vehicle for commuting, then you might be okay with a personal car insurance policy.

What type of vehicle is it? How heavy is the vehicle? If you use a vehicle that’s heavier than a normal-size pickup truck or SUV, then you might need a commercial car insurance policy. Vehicles like semi trucks, commercial trailers, tow trucks, and dump trucks all fall into this category. Vehicles of this size can cause significantly more damage in a collision and may require special car insurance.

What type of business liability limits do you require? Typically, commercial car insurance policies have higher liability limits than personal policies. You may wish to buy a commercial insurance plan to get extra liability coverage.

As you can see, things can get complicated. Not all businesses, employees, and contractors fit precisely into the above definitions. We recommend talking to an insurance agent or contacting your insurance company to determine if you need commercial car insurance.

Final Word

If you use your car for work, then you most likely need special commercial car insurance coverage. Contact your insurance company today to determine if you need commercial car insurance coverage. It may only add a few dollars per month to your policy, and it ensures you stay protected in all driving situations.

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