Will insurance cover your claim if a personal vehicle is used for a work errand?
It depends, but keeping the insurance company informed plays an important role
The company vehicle is in the shop, and your boss calls to ask if you can use your personal car to drop off some drawings for a client. Even if it’s just this one time, if you get in a collision, your insurance company might not cover the damage.
When it comes to using your personal vehicle for work errands, there are three tiers, or categories of situations, that insurance companies consider. In their eyes, it’s how often you use your car for work-related purposes that matters, and you should always keep them informed if something changes.
Let’s look at each tier and see how it impacts your insurance coverage.
The next tier refers to a personal car that is sometimes used for work errands. For example, let’s say you’re a real estate agent who picks up or drops off clients when you’re showing them a home, or you’re an architect who delivers drawings to a client every now and again. Your premium would be slightly higher than for a personal use vehicle, but if you’ve correctly informed the insurance company of your detailed car usage, you should be safely covered in the event of a collision.
The final tier is commercial use of a vehicle on a regular basis. For example, maybe you deliver pizza, or you’re a courier. The percentage of time you’re driving for work is certainly higher than with the first two cases; therefore, unsurprisingly, your premium would be higher.
But again, the big question: what if you have to run just a quick work errand using your own car?
Insurance providers are more forgiving in this sort of situation where you’re moving from a personal use to a business use just one time. They are less forgiving, however, if you use your personal vehicle to conduct business-related errands on the regular and don’t bother to inform them.
You might think it’s none of your insurance company’s business how you use your vehicle. But premiums are determined based on several factors, including vehicle use. Once you go from personal to business, “The whole use of the vehicle has changed,” says Anne Marie Thomas, the director of consumer and industry relations for the Insurance Bureau of Canada.
Take the case of delivering pizzas, for instance: “It is different from going from personal to business use because you’re not going to be driving at breakneck speeds to get to the client’s house like you would if you only had 30 minutes to deliver a pizza on time,” says Thomas. If you’re delivering pizzas, perhaps you’re making five stops, pulling up to curbs, going to the next one. There’s more risk involved. Not to mention the simple fact that you’re driving more.
When you sign up for a car insurance policy, you’ll be asked how many kilometres you drive to and from work. Based on that information, your insurance premium is adjusted and categorized as either personal, business, or commercial use.