When would I need business insurance for my car?

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Things to Remember...

  • If you’re a professional who drives their personal car for business use, you may be able to purchase personal insurance for all of your usage needs
  • Personal car insurance excludes some business use and doesn’t afford cover if vehicle is owned by the business
  • A Business Auto Coverage Form is used to provide business auto liability insurance to business owners who have fleets or who allow employees to drive company cars
  • Business car insurance provides broader coverage options to a wider range of vehicles
  • Business car insurance doesn’t cover personal usage unless you have a special Drive Other Car Endorsement to broaden the coverage

Personal car insurance will cover you to drive to and from work but is limited in how much protection is afforded when you’re driving for business. While many standard policies will cover business users, there are specific limitations written into the policy that you’ll need to know about before you assume your coverage is adequate or appropriate.

Start comparing car insurance rates now by using our FREE quote tool above! While not all business professionals need business insurance, there are many scenarios where a business auto policy is the only type that’ll provide protection.

Read on, and find out more about the difference between personal and business policies before you start to build an insurance portfolio.

What does personal auto insurance cover?


Personal car insurance is designed to provide coverage for social and domestic use.

While the average person does use their vehicle to commute to and from work or even to travel between work locations, you can’t expect your standard car insurance to pay when the vehicle you’re driving is used solely for business.

This is because vehicles used in business face unique risks and these risks aren’t used to determine premiums under a standard policy.

What is the difference between commuter and business user?

While no personal auto insurance plan will afford coverage for a car used primarily for business, it’s possible that business use in your personal vehicle will be covered.

To determine whether or not this is true, you’ll need to review the terms, conditions, and exclusions that make up the policy.

As a policy is being underwritten, the agent will ask exactly how the vehicle is being used on a regular basis.

You can select from either pleasure, commute or business use. While commute and business use sound the same, they are actually very different.

Commuters drive to and from a main work location and business users will drive from one job to another or from one client to another throughout the course of a day or week.

How insurers classify business use is very similar to how business use is defined by the IRS.

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Selecting Business Use Under a Personal Policy

If you use your car for private and business use and it’s registered under your name, it’s possible that you could be fine carrying strictly a personal auto policy.

For your insurer to pay, you must notify the insurer that you’re driving for business so that you can be charged the right rates for the risk that you’re presenting.

This is because usage is a major factor used to determine auto insurance rates.

While business use is the highest risk class and comes with the highest sticker price, it’s a class that gives you the option to buy standard insurance without needing a business policy.

If you’re changing your policy from pleasure or commute usage to business usage, you will notice a jump in your rates. This rate difference varies from carrier to carrier, but it’s much less than what you would pay for a commercial policy.

Types of Business Usage Excluded From a Personal Policy


In some scenarios, you have no choice but to buy a business policy even when you own your vehicle and when you drive for both business and personal use. This is because there are types of use that are listed in the named exclusions portion of a policy.

Some of the various business exclusions written into a personal policy include:

  • Vehicles used for pickup and delivery of goods
  • Vehicles used for messenger services
  • Vehicles used in any type of taxi or livery service
  • Vehicles owned or leased by a corporation
  • Vehicles that are rented or leased to others
  • Vehicles registered and titled to a business
  • Vehicles driven by employees and non-listed drivers regularly
  • Vehicles with a Gross Vehicle Weight of more than 10,000 pounds
  • Vehicles equipped with special cooking, catering, plowing, racing or other equipment
  • Vehicles with permanently fixed toolboxes and ladders for business use

What is a Business Auto Coverage Form (BACF)?

Auto policies come in several forms. If one form doesn’t cover you, there’s another form that will fill in the gaps.

A Business Auto Coverage Form is a commercial policy that is designed to provide business liability coverage to autos owned by a business or used in conjunction with a business.

Autos don’t just include private passenger cars. The term also includes:

  • Trucks
  • Vans
  • Trailers
  • Other vehicles driven on public roadways

Who needs a BACF policy?

While not everyone needs business coverage, if you carry the wrong insurance, you could face claims denial. It’s also important that you know personal car insurance only protects claims made against you and your personal assets.

If an injured policy files a claim against your business, personal insurance won’t pay. Here are some examples of situations that create a need for a Business Auto Coverage Form:

  • Car is leased or financed to your business
  • Car is registered under the name of the corporation
  •  Vehicle has permanent fixed industrial equipment
  • Vehicle is only used for business
  • Vehicle is used interstate for business
  • Employees drive the vehicle on a regular basis
  • Car is used for deliveries or for livery services

How to Cover Business Vehicles Being Driven for Personal Use


Your personal car insurance might cover some business usage, but a business policy won’t cover any personal usage unless you have a specific endorsement.

If your business vehicle is your personal vehicle, be sure to add the Drive Other Car Coverage Endorsement so that you’re covered across the board.

If you’ve been carrying the wrong type of insurance for your vehicle, now’s the time to correct the error. Start to price the cost of either personal or commercial auto insurance and then select the best policy based on price and reputation.

If you want to price the cost quickly, use a price shopping tool online for instant quotes and you can conveniently shop the market for coverage.

Start comparing car insurance rates now by entering your zip code in our FREE quote tool below!

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