BUSINESS USE - Does my Personal Auto Policy exclude 'business' use?
Yes, but only very specific types of business use are excluded in the Personal Auto Policy (or PAP).
Even though your Personal Auto Policy appears to exclude all business use (except farming and ranching), the exclusion does not apply to “private passenger autos, pickups, motorhomes and vans, or trailers used with one of these vehicles”. So, using one of these types of vehicles in your own business or in the business of your employer is not excluded, except in three very specific cases.
Your PAP excludes all coverage - liability, uninsured / underinsured motorist, medical payments and physical damage - if your vehicle is:
Used as a public or livery conveyance (the public pickup and delivery of people - like a taxi cab, limo or shuttle; or goods - like a public delivery or freight company).
Used in the business of selling, repairing, servicing, storing, or parking vehicles (like auto dealers, auto repair and lube shops, parking garages and valet services). This is meant to exclude coverage on customer’s vehicles you may drive in the course of business. It does not exclude your own vehicles that are “your covered autos”.
NOTE – this following new exclusion appears in some, but not all, PAP policies:
Used for the pickup or delivery of newspapers or magazines, food (like pizza or other food) or any products for the purpose of compensation. This exclusion does not apply to delivery that is incidental to the insured’s business (defined as your trade, profession or occupation).
So, except for these specific exclusions, using your own vehicle in the course of your employment is not excluded. Here are some examples of use that would NOT be excluded…
Salesperson who drives to various customer and prospect locations to show, demonstrate, or deliver their products (a product not excluded in the policy).
Building contractor who picks up supplies and delivers them to his job sites.
Home health or social worker who drives to clients homes.
Employee who uses their own vehicle to pick up the mail or take the deposit to the bank.
ACCEPTABLE RISKS – VS – EXCLUSION: Even if not specifically excluded, how you use your vehicle may not be an acceptable risk to the insurance company under a PAP. The insurance company may charge additional premium for certain “business use” or refuse to insure or cancel policies when the use presents too much risk. In these cases a commercial auto policy may be the best solution to your coverage needs.
The content of FAQ articles are general in nature and are not intended as a substitute for professional legal, financial, or insurance counsel for individuals. Insurance coverage forms vary by issuing company and by state. For specific advice contact us.
American Insurance is an independent insurance agency with offices in Lewiston and Moscow, Idaho.