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What is business use car insurance?

The term ‘business car insurance’ is a bit of a misnomer. It might seem like there’s a special car insurance product designed to cover you for business use, but in reality, you can get business use coverage with a range of personal car insurance policies.

Australian insurers don’t always offer cover for business use cover in their car insurance options. This means it’s even more essential to check the relevant Product Disclosure Statement (PDS) before buying a policy for details on what’s covered. You could also ask your insurer whether they include business-related incidents in their car insurance.

What type of car insurance for businesses can you compare with us?

Our partners offer business car insurance for passenger vehicles to cover both personal use and business use. Whether you’re a tradie using your ute for work, a sole trader who visits clients outside the office or just a private commuter, we can help you compare car insurance.

Essentially, business car insurance is a regular car insurance policy that includes provisions for business use as well as personal use. The most important distinction is the purpose for which you’re using your vehicle and whether an insurer will cover it.

Remember: Not every policy or insurer on our comparison service will cover incidents while you’re using the car for business use. Double-check the PDS (which we provide before purchasing).

Which levels of car insurance cover include business use?

Generally, the following levels of cover can insure your vehicle being used for business purposes:

Whether your level of car insurance covers business use will depend on your policy and insurer. It’s important to check if car insurance for business use is included in your cover before you start using your vehicle for business purposes.

* Unless an uninsured third party was at-fault and you can identify them.

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Frequently asked questions

What’s considered business use?

It’s important to understand what constitutes business use, particularly since car insurance providers may have different definitions. If, for example, you sometimes use your own car to go get the office milk, lunch or supplies, you’re unlikely to require business car insurance.

However, if your job requires you to use your personal car regularly to complete daily work or business tasks, you’ll need to take out business vehicle insurance. You may consider this type of cover if:

  • You routinely drive between locations as part of your job (e.g. tradies).
  • Your car plays a fundamental role in getting your job done (e.g. an office manager who regularly uses their vehicle to run errands).
  • You use your car to transport other employees or goods from one location to another (e.g. a sales representative).

Keep in mind that you don’t need to generate income by using your car for it to be considered a business vehicle. When taking out business car insurance, you can register the car in either your or the business’ name.

What does business car insurance cover?

The level of personal car insurance you have determines what your business cover will be. Below is a summary of what’s included in each available policy.

Level of coverComprehensiveThird Party PropertyThird Party Fire and Theft
Damage to your vehicleYesNoNo
Damage to other vehicles and propertyYesYesYes
Theft and malicious damageYesNoYes
Fire damageYesNoYes
Storm damageYesNoNo
Towing after an accidentYes/Optional extraNoNo
Loss or damage to personal effects kept in carYesNoNo
Emergency transportYesNoNo
Some of the listed items are not unlimited and will contain critical restrictions and limits. You should always consider the PDS to determine whether a product is right for you prior to purchasing.

What isn’t covered by insurance for business cars?

Business car insurance is subject to the same exclusions as the level of personal cover you take out. You can find these exclusions in your PDS. It’s vital to be aware of them so you know exactly how you’re covered in the event of an accident. Typical exclusions are:

  • Drivers who aren’t listed on your policy
  • Driving under the influence of drugs or alcohol
  • Driving with an invalid licence
  • Intentional damage or harm to your vehicle
  • Car racing
  • Natural wear and tear, such as rust or mechanical failure.

Can my car insurance cover my business equipment?

Some comprehensive car insurance policies include coverage for personal effects, like tools, computers and business equipment. There’ll usually be a limit to how much the insurer will pay you out for these items, and you may have to pay extra to add this coverage to your policy.

If you have a lot of tools that you regularly transport for your business needs (such as a suite of power tools and hand tools), a business insurance policy that includes portable equipment is likely to provide better coverage.

Can I get car insurance for ridesharing?

Many car insurance policies don’t cover ridesharing, but there are some that do. You should check whether your insurer will cover incidents that occur while ridesharing and inform them that you’re delivering people or goods as a service in your personal car.

You can learn more about car insurance for rideshare driving here.

Will car insurance for business vehicles cover damaged sign repainting?

If your car has business signage that is damaged in an insured event, comprehensive level car insurance can help pay for paint repairs and fixing signage. Keep in mind that limits apply, so your insurance may not cover the full cost.

Is business use car insurance more expensive than a personal use policy?

Generally, car insurance that covers both personal and business use will be more expensive than a personal use policy of the same level of cover. However, there are many factors that can influence the price of car insurance, and the cost will also vary between insurance providers and policies.

How do I get business car insurance?

You’ll need to find an insurer that offers business car insurance coverage in their car insurance policies. Luckily, our comparison service can help you. By completing a quote using our comparison service, we’ll be able to help tailor the level of cover you’re looking for.

Being honest ensures you receive the right cover for your circumstances and helps the insurer determine if business car insurance is an option for you. If you tell us you use your car for business and/or personal commuting, we might ask you a couple of extra questions about the car’s use, including:

  • Whether you’ll be using the vehicle to receive payment for carrying passengers
  • If the car will be used to transport goods or make deliveries for a fee.

This is on top of other details, such as:

  • The type of car
  • Who’ll be driving it
  • How old and what colour the car is
  • The number of kilometres per year it’s driven
  • If the car has been modified
  • The type of coverage you want.

If you already have car insurance and want to add business insurance cover down the track, it’s best to contact your insurer directly to assess your options. If business vehicle insurance is something they offer, you’ll usually be able to rectify your policy and adjust your premium accordingly. If they don’t offer this cover, you can compare car insurance with us to look for other policies and providers.

Is business use car insurance the same as commercial vehicle insurance?

While the two are similar, car insurance with business coverage isn’t the same as commercial vehicle insurance. While both provide cover when a vehicle is used for work purposes, commercial insurance policies protect business vehicles that are used mainly in the workplace or for work purposes only, not for personal use (with some rare exceptions).

Commercial car insurance is sometimes offered as a stand-alone product and can insure numerous vehicles under one policy. In addition to regular cars, this type of cover is generally used for other vehicles, including forklifts, trucks, vans, utes and trailers.

You’d typically consider commercial motor insurance when:

  • A business needs to insure numerous vehicles under one policy
  • A vehicle is transporting or carrying goods you want to protect
  • You want protection in the event a vehicle breaks down
  • The vehicle is used for rigorous work
  • The vehicle is not a passenger car (e.g. a forklift, heavy truck or tractor).

Stephen Zeller, General Manager

Business car insurance tips from our expert, Stephen Zeller

  1. If you are or considering being a rideshare driver, it’s important that you let your insurer know. The policy you’re currently on may not cover the vehicle for rideshare usage, even if it’s just a part-time gig.
  2. Insurers approach the use of a vehicle differently and, depending on its use, may not be able to offer any cover at all. Be sure to let your insurer know how you intend to use the vehicle so that you get the right cover in place.
  3. You can switch car insurance at any time; just check for cancellation fees before you do! If you’ve paid your premium for the year upfront, you will usually receive a pro-rata refund for the unused period of insurance.
  4. Many insurers offer a 12-month premium discount if you purchased your policy online. This means your premium for the following period is likely to will automatically increase, so it pays to compare insurance at least once a year.
  5. Consider raising the standard excess payment of your policy to reduce the premium. If you’re going to make any big changes, ask yourself: If you raise it, would you be able to afford paying the higher excess in a claim?

Discover why it pays to compare car insurance

If you’re looking for a policy that offers great value business car insurance coverage, let us help you out. Our comparison service is easy to use, free and allows you to compare available policies in one convenient location.

Just enter your vehicle’s details, answer a few questions and you’ll be ready to compare your options in minutes. Simples!

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