How Does Auto Insurance Apply to Using a Personal Vehicle for Commercial Use, such as Uber?
Picture this: While you’re on the clock with Uber and are waiting on the next ride request, you swerve to miss a vehicle coming into your lane and end up hitting another car. After you file a claim with Uber and your insurance company, you find out that Uber will only cover the costs of the other driver’s medical bills and auto repairs. To make matters worse, your auto insurance company denies your claim because you were on the clock with Uber and, therefore, your individual auto insurance policy does not cover you – which means you’re going to have to pay out of pocket for your medical bills and auto repairs. Ouch!
Unfortunately, this situation occurs frequently. Many people assume that their individual auto policy covers them 100% of the time that they are driving – regardless what they’re using the vehicle for.
We’ve debunked two major misconceptions about how using personal vehicles for commercial use affects auto insurance, included the important take-aways, and given suggestions to help assess your coverage and ensure that you’re protected.
For jobs that require the use of a personal vehicle to transport people or goods for a fee (such as Uber, Lyft, or pizza delivery), it’s a common misconception that the company’s commercial auto insurance covers the driver 100% of the time that they are on the clock. In certain situations, companies like Uber do have commercial auto policies that cover the driver and/or third-parties, but these policies do not cover the driver 100% of the time.
Important note: For some jobs, this is not an issue. For instance, realtors and salespeople regularly use their vehicle for work use, but they do not fall into this category because they do not transport people or goods for a fee. However, if you use your personal vehicle for work use (any kind of work use), you should still notify the insurance company that handles your individual auto policy.
It’s also a common misconception that all individual auto insurance policies cover a driver who transports people or goods for a fee. For example, individual auto policies with Geico do not contain coverage for rideshare in Texas. In fact, many individual auto insurance policies will not cover accidents that occur while driving for these types of companies because the driver is considered working, which falls under commercial auto insurance coverage.
Important note: If you did not disclose that you use your personal vehicle for work use, most insurance companies will cancel your policy as a means to protect you in case you were to get into an accident that isn’t covered on your policy. The insurance companies do this so you can find a policy that does offer the necessary coverage.
So, what should you do?
If you use your personal vehicle for commercial use, we recommend that you notify your insurance company and check if your individual auto policy does or does not cover commercial driving.
Additionally, if the company you work for (Uber, Lyft, etc.) offers optional coverage, we highly recommend that you take the coverage. Not only will it increase your coverage and protection, but it also increases your options with other insurance carriers. For instance, three of the carriers that we work with offer additional coverage IF the policy is paired with Uber’s optional coverage.
If your current individual auto policy does not cover commercial use, you might want to consider purchasing a commercial auto insurance policy, or call us to learn which carriers do offer additional coverage. If you would like to learn more about a commercial policy or want to know if your current auto policy includes coverage for these types of services, please call us at (972) 673-0045. We’re here to help!