What’s the Hidden Costs of Using Your Personal Car for Business?

Okay, now sure, that sounds extremely obvious, doesn’t it? But yeah, it’s one of those things people don’t realize until it’s too late. You assume your personal car insurance has your back, right?  Like, yeah, it’s a car; it’s insured; what’s the big deal? Well, then an accident happens, and so then, you’re just learning that your insurer doesn’t see it that way.

There’s a Problem When Personal and Business Collide

It doesn’t sound like a big deal, but yeah, it’s a pretty big deal here. So, using your car for business sounds harmless enough. Maybe you’re dropping off an order or visiting a client. But in the insurance world,  the moment your car starts working for your business, it stops being a “personal” vehicle. And that’s where things get messy. So yeah, this is where people mess up, and they don’t know what they’re doing it technically “wrong’.

Well, most personal insurance policies are crystal clear: they don’t cover accidents that happen while using your car for work. It doesn’t matter if you were driving two miles or two hours; once it’s business-related, it’s a different ballgame. So, just imagine that someone hits you, or worse, it’s a hit-and-run. So, does liability insurance cover a hit-and-run? Chances are, this is going to be one of the first things that comes to your mind the second you see that car that hits yours, running off. 

There’s the Financial Domino Effect

When you run your own business, time is money, like literally speaking here. If your car’s off the road, well, that’s lost income. For you, that means do deliveries, no client visits, no work getting done. You know what that means? It means a whole domino effect.  And while you’re figuring that out, you’re also dealing with the cost of repairs, possible rate hikes, and maybe even medical bills if the accident was bad. 

While yeah, sure, it might feel like your insurer is being cruel, they’re not, they’re just following the fine print. But yeah, it still feels like they’re being cruel; it’s understandable.

You Need to Play it Smart

Okay, so what’s the fix here? Well, it isn’t complicated, it’s just overlooked (well, usually). So, most insurance companies offer commercial or business-use add-ons that cover situations where your car doubles as part of your job. While yes, not all of them do, a good chunk of them usually do. It might sound unnecessary if you’re not a delivery driver or tradesperson, but it’s a small price to pay for avoiding a nightmare later. It might help to just check your coverage and just see what sort of options are out there for you.