Will insurance cover your claim if a personal vehicle is used for a work errand?

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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.  

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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.  

One-time work errands 

The first category assumes you have a personal car that you use for a one-off work errand. This is something that doesn’t happen very often.  

Maybe your work vehicle (the one that your employer pays to insure) is in the shop getting repaired. If you have to rely on your personal vehicle to run a work errand, you should advise your insurance company before making the trip. Otherwise, you could risk not being covered if you have to make a claim resulting from something that happens during the trip.  

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More frequent work errands

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.  

Commercial use of a personal vehicle

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.  

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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.  

Why insurance companies want to know how you’ll be using your vehicle  

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.

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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.  

And if you ever change that status, Thomas says, make sure you inform your insurance broker. “There is no such thing as too much information — even the slightest change.”   

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