Does personal auto insurance cover business use of my vehicle?

man driving a car for work

Do you use your personal vehicle for work, either for your own company or the company that you work for? You may not realize it, but personal auto insurance often does NOT cover business use of a vehicle, and you’ll need to get a commercial auto policy to make sure you’re covered in case of an accident.

If you or an employee drives a personal vehicle for any of the following reasons, you should consider adding an HNOA policy to your auto insurance:

  • Running errands for the business
  • Visiting clients at their offices
  • Transporting people or items
  • Making deliveries
  • Transporting equipment

Business use is considered a higher risk to insurance companies 

Auto insurance companies view commercial drivers as higher risk than personal drivers, even for the same vehicle. This comes down to the number of miles driven on a road. Whereas a person who does not use their vehicle for commercial purposes will likely drive to work and back every day, a person who uses their vehicle for business purposes is likely to drive to work and back, as well as to make supply runs, to make deliveries, to meet with clients, and more. Although this is certainly not the case for every person who uses their personal vehicle for business purposes, insurance companies tend to see it that way.

Three types of auto insurance 

While personal auto insurance and commercial auto insurance are similar in many ways, there are some differences.

Personal auto insurance covers the cost of repairs to other drivers’ cars or property and third-party injuries if you are found at fault in an accident. Comprehensive car insurance policies may also pay for damage to your own vehicle, medical bills for you and your passengers, and damage that occurs because of vandalism, theft or storm damage.

Commercial auto insurance covers all of the above for company-owned vehicles but it also protects the business in the case of an accident. For example, commercial auto insurance will cover the cost of damage to equipment that is being hauled, items that are being delivered, and lawsuits related to business use of the vehicle.

Hired and non-owned auto insurance covers your personal car, an employee’s car or a rental car in the case of an accident while driving for business-related purposes. This can include deliveries, errand runs, business trips, traveling to meetings and more. Hired and non-owned auto insurance protects your business, inventory and deliverables in the case of an accident as well as covers the cost of lawsuits that may arise from an accident while using your personal car for business purposes.

Using a personal vehicle for business? You need an HNOA policy. 

Any business that uses personal vehicles for business purposes should purchase a hired and non-owned auto insurance policy. A single accident without HNOA insurance can cost the business thousands of dollars — far more than the cost of adding a hired and non-owned insurance policy.

How much will HNOA cost for your business? 

Edwards Insurance Agency in Taylors. S.C., can find the best price for HNOA insurance for your business. Give us a call today!