Delivering for DoorDash or Instacart? You Just Voided Your Personal Car Insurance.
My “Side Hustle” Almost Cost Me Everything.
I started delivering pizzas to make extra money. I got into a minor fender bender while on a delivery. I thought, “No big deal, I have insurance.” I was wrong. My claim was denied, and my policy was canceled. Buried in the fine print of my personal auto policy was a “business use exclusion.” The moment I started using my car to conduct a business—even a simple delivery—my personal insurance was void. I was driving naked, with no coverage at all. It was a terrifying and nearly catastrophic mistake.
The “Business Use” Exclusion in Your Personal Policy That Can Lead to a Denied Claim.
The Bright Red Line Between Personal Errands and Commercial Activity.
Every personal auto insurance policy has a clause that excludes coverage for “business use.” This means the policy is designed to cover your commute to work, trips to the grocery store, and family vacations. It is NOT designed to cover activities where you are being paid to transport goods or people. This includes being a rideshare driver, a food delivery person, a courier, or even using your truck for your landscaping business. The moment money changes hands for your driving, you cross that red line.
When Does Your Side Hustle Require a Full-Blown Commercial Policy?
It’s a Question of Risk.
The type of insurance you need depends on the risk you represent. A simple “business use” endorsement on your personal policy might be enough for a real estate agent who occasionally drives clients. But if you are putting heavy, daily mileage on your car for a delivery service, hauling equipment for a contracting business, or transporting people for a living, you represent a much higher risk. In these cases, you will need a full-blown commercial auto policy with higher liability limits to be properly protected.
A Real Estate Agent Shows a House and Crashes. Who Pays?
The Gray Area of “Business Use.”
My friend, a real estate agent, got into an accident while driving a client to see a property. Her personal auto insurer initially denied the claim, citing the business use exclusion. However, because this type of driving is central to her profession, and she had a good agent, they were able to argue it was a covered gray area. The smarter move would have been for her to get a simple “business use” endorsement on her personal policy, which would have eliminated any doubt and protected her completely.
The Drastic Difference in Liability Limits Between a Personal and Commercial Policy.
Protecting a Paycheck vs. Protecting a Business.
A personal auto policy might have liability limits of $100,000. A commercial auto policy for a business will typically have liability limits of $1,000,000 or more. Why the huge difference? Because the potential for a lawsuit is so much greater. An accident involving a commercial vehicle is often seen by lawyers as an opportunity to sue a business with “deep pockets.” The higher liability limits of a commercial policy are essential to protect the business’s assets from a major lawsuit.
Don’t Risk Your Livelihood to Save a Few Bucks on Insurance.
The Most Expensive Policy is the One That Doesn’t Pay.
Trying to run a business using your car while relying on a personal auto policy is a foolish and dangerous gamble. The small amount you might save in premiums is nothing compared to the catastrophic financial risk you are taking. A single accident can result in a denied claim, a personal lawsuit that could bankrupt your business, and a loss of your personal assets. Proper commercial insurance is not an expense; it is a fundamental cost of doing business.
How a Simple “Business Use” Endorsement on a Personal Policy Might Be Enough.
The Perfect Solution for the Occasional Business Driver.
For many people who only use their car for business occasionally—like a salesperson, a consultant, or a photographer—a full commercial policy might be overkill. The perfect solution is often a “business use” endorsement that can be added to your personal auto policy. For a small additional premium, this endorsement removes the business use exclusion and extends your personal policy’s coverage to your work-related driving. It is the simple, affordable solution for the “light” business user.
If Your Vehicle Has Racks, Lettering, or is a Heavy-Duty Truck, You Need Commercial.
The Telltale Signs of a Commercial Risk.
Insurance companies have a simple visual test. If your vehicle looks like it’s used for business, it probably needs a commercial policy. A ladder rack on a van, magnetic signs or permanent lettering with your company’s logo, or the simple fact that it’s a heavy-duty pickup truck used for hauling are all red flags. These are clear indicators to an underwriter that the vehicle is being used for commercial purposes and carries a higher risk than a personal family sedan.
A Landscaper’s Tale: The Accident That Almost Bankrupted His Business.
His Personal Policy Was Worthless.
A local landscaper was driving his personal pickup truck, which was pulling a trailer with his mowers, when he caused a multi-car accident. His personal auto insurance company denied the entire claim because he was clearly using the vehicle for his business. He was personally sued, and the lawsuits almost forced him to declare bankruptcy, all because he hadn’t purchased a proper commercial auto policy. His attempt to save a few hundred dollars a year in premiums nearly cost him his entire livelihood.
The Moment Money Changes Hands for Your Driving, Your Personal Policy is at Risk.
The Brightest Red Line of All.
This is the simplest, clearest rule of thumb. The moment you are being paid to be behind the wheel of your car—whether you are delivering a pizza, driving for Uber, or hauling equipment for a client—you have crossed the line from personal use to commercial use. At that precise moment, the coverage provided by your standard, personal auto insurance policy is in serious jeopardy. It is the bright red line that should signal to you that you need to have a conversation with your insurance agent immediately.