Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager Chris Harrigan

UPDATED: Nov 3, 2020

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Key takeaways...

  • Your personal auto insurance policy may not cover you if you are driving for business
  • If your business has more than one vehicle, or you use a vehicle to make deliveries, you may need a commercial policy
  • There are special considerations for renting a car when traveling on business

If you drive a lot for your job, you may need business car insurance.

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Consider these difference scenarios for those who drive for business.

Driving Your Own Car for Business


If you are driving a car that is owned by you for business, you may think that your personal auto insurance policy will cover you if you are in an accident.

The fact is, it may not. And even if it does, you may have to pay a deductible, and you may see an increase in your premium that can last for several years.

If employees are routinely asked to drive their personal cars for business, check to see if your employer has a commercial policy that covers employees when they are driving for business.

If it does, you will want to make a claim on your employer’s policy. That way, your personal auto premium may not go up.

The first time you are asked to use your personal vehicle for company business, ask for the details of the corporate insurance policy if one exists.

Keep the following information in your vehicles whenever you drive it for business:

  • The insurance company’s name
  • The insurance company’s phone number
  • The policy number

If your employer does not have a policy, you will need to claim the accident on your own policy. When you make a claim, be sure to tell the adjuster that you were using the car in a business capacity.

Your insurance company may pay the claim, but they may then try to recoup some of the payment from your employer’s insurer.

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Driving Your Company Car for Business

If you drive a lot for business, you may be given a car to drive which is owned by your company. In this case, the company will pay to insure the car and will pay any deductible if you are in an accident.

An accident in a company car may not raise your personal insurance rates unless you receive a citation for the accident.

If you are ever asked if you have had an accident or claim, you must disclose that you had an accident in a company-owned vehicle.

If you do not disclose this, you could run into trouble if you later have an accident in your personal vehicle and the insurance company discovers that you weren’t truthful about your driving record.

Renting a Car When Traveling on Business


If you are traveling on business, you may need to rent a car to drive when you arrive at your destination. There are some unique considerations around renting a car while traveling on business.

Different states have different requirements for minimum insurance coverage. The coverage on your personal policy or your company’s commercial policy may be different than what is required in the state where you are driving.

When you are driving a rental car out of state, regardless of whether it is for business or pleasure, the limits of your insurance policy will automatically adjust to the minimum required limits in the state where you are driving.

For example, let’s say your personal policy or your company’s policy has liability limits of $15,000 per person and $30,000 per occurrence for bodily injury and $5,000 for property damage because those are the minimum requirements in your state.

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If you are driving a rental car in a state where the minimum requirements are $25,000 per person and $50,000 per occurrence for bodily injury and $10,000 for property damage, your limits will be raised to the state minimum while you are driving in that state.

This increase in limits ensures that you are in compliance with the minimum requirements in the state in which you are driving.

Some credit card companies provide insurance when you rent a car using their credit card. To find out if yours does, and how much insurance they provide, call the credit card company before you leave on your trip.

The car rental company offers optional insurance, often at a high price. Understanding your existing policy and any additional protection offered by your credit card company will help you to decide if it is necessary for you to purchase this optional insurance coverage.

If you don’t own a car of your own but frequently rent for business, consider purchasing a non-owner policy.

These policies may cover you for non-business use of a rental car when traveling on business, such as driving back to your hotel after a non-business dinner or night out, or a similar circumstance.

Your company’s commercial policy may not cover you in these circumstances, so you’ll have to rely on personal coverage. If you don’t have coverage for your own vehicle, but still drive often, a non-owner policy can provide the protection you need.

If You Are a Business Owner


If you own a business and have a car that is owned by the business, the business should insure it. The primary insured on the policy should be the business.

You need the same types of coverage that you need for a personal policy including:

Depending on how much and what kind of driving you do, you may need a business insurance policy, sometimes called a commercial policy.

A commercial policy can have much higher limits than a personal auto policy. It’s not unusual to see a commercial auto policy with bodily injury or property damage liability limits of $1,000,000, as opposed to $50,000 or so for a personal auto policy.

When you consider that you may be more likely to be involved in an accident if you have to drive for your business, and the fact that someone may be more likely to sue a business than an individual, it makes sense to have a commercial policy.

If you use your vehicle to make deliveries, if you have more than one vehicle, or if you have employees who use the vehicle with any regularity, you should look into a commercial policy.

A personal auto policy will often suffice if you are the only one driving the vehicle and if you use it primarily to get to and from client sites. A good example of this is a van or truck used by a plumber, electrician, or other artisan contractor.

These vehicles can often be insured under a personal policy.

If you are a business owner, you may have an umbrella policy as well to protect you from being sued or from a large claim resulting from an auto accident. Be aware that a personal umbrella policy usually excludes business-related liability.

To make sure you are fully protected, you should look into a business umbrella policy as well.

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Ridesharing Services


If you use your car to drive for a ride-sharing service like Lyft or Uber, you may not be able to rely on your personal insurance policy.

Some policies exclude coverage when operating your vehicle for hire, so be sure to check with your insurance company before you set out to pick up that first passenger.

Some ride-sharing companies provide additional liability insurance for their drivers, but only when the app is on or when there is a passenger in the car. Check the agreement you have with the company you drive for, and watch for updates.

It’s common for people to have to drive in the course of their work, but it’s important to make sure that you and your business are protected.

An uninsured accident could be financially devastating for you and your business, so make sure that you have the proper insurance coverage in place.

Find the coverage you need for the best rate by comparing car insurance quotes side-by-side right here.