Personal car insurance for 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.

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.

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.

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.

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.

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.

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.

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.

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).