Business Car Insurance

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What is business car insurance?

What are the different types of car insurance?

What is considered ‘business use’ vs. ‘private use’?

What are the types of insurance coverage available for business use?

What are exclusions to watch out for?

Is business car insurance more expensive than a standard car insurance?

Do I need business car insurance?

Long story short

Personal insurance isn’t enough for business

Using your car for work activities like deliveries or client meetings is something a standard personal car insurance likely won’t cover.

The wrong insurance could leave you high and dry

Personal car insurance excludes most work-related uses. If you’re driving for business, it’s wise to check whether your policy matches how you use your car to avoid footing the unexpected repair bill.

Premium costs less than a hefty out-of-pocket repair bill

Business car insurance can be an extra expense, but peace of mind costs less than a rejected claim.

There are various levels of cover available

Choose from comprehensive, third-party property damage, or third-party fire and theft coverage.

When work starts, private stops

Driving for gigs like Uber, carrying tools, or visiting clients? That’s business use. You can stick to private insurance if you’re just commuting to work.

What is business car insurance? 

Business car insurance is coverage for vehicles you use for work or – you guessed it – business. It typically covers traditional cars, electric vehicles, vans, utes, and light trucks. 

Note that many insurance companies might not label their policies explicitly as ‘business car insurance.’ Instead, they offer regular car insurance policies that can include coverage for some business activities – if you meet certain conditions.   

Some providers also label this type of coverage as ‘commercial motor insurance’ or ‘commercial vehicle insurance’. 

What are the different types of car insurance?

Personal car insurance

This type of insurance is designed for everyday private use: 

• social, domestic, and leisure use like trips to the shops, weekend getaways, and cruising around for fun
• commuting to and from your workplace
• occasionally using it for work here and there, as long as it’s not the main way you make money  

The cover’s typically for passenger vehicles like utes, sedans, and wagons – your average day-to-day rides.¹For more information, see Moneysmart – Car insurance

For example, if you’re hustling as a part-time florist and delivering bouquets on weekends, personal car insurance likely won’t cover you.  

Helpful tip:

Here’s a word of caution: Most personal car insurance policies deny claims for cars used for work-related activities beyond commuting. If you’re unsure, check your policy’s exclusions before you find yourself footing an unexpected bill.  

Adrian Bennett

General Manager for General Insurance

Business car insurance

This one’s for the hustlers – the freelancers, tradies, or side giggers.  

If your job means your vehicle is pretty much your office (and you’re a sole trader or part of a small business), then business car insurance can typically cover most of your operational activities on the road.

Business car insurance covers standard cars but also vans, utes, or trailers that ferry tools, make deliveries, give rides to clients, or take you to regular offsite meetings. It’s not as robust (or as exxy) as commercial or fleet insurance but fills the gaps where personal car insurance falls short.   

Commercial (or fleet) insurance

If you’re in the big leagues using trucks or specialised vehicles for your business, commercial or fleet insurance is where it’s at. This type of cover is typically used by fleet owners, transport companies, and any business using food trucks or specialised machinery like forklifts.  

Commercial or fleet insurance can tailor the policy to cover for downtime, towing costs, redelivery, theft, and more. 

What is considered ‘business use’ vs. ‘private use’?

So how do you know if your car use counts as ‘business’ and not just ‘private’?   

You’ll generally need business car insurance if you’re using your vehicle for things like: 

• dropping off products, materials, or equipment like delivering cupcakes to customers or an ecommerce business moving inventories around various warehouses. Heads up: delivery gigs like pizza runs or courier services might not be covered
• visiting clients or customers like dog-grooming or cleaning houses
• carrying pricey tools, gear, or products
• driving multiple vehicles for you and your team under one handy policy     

On the flip side, daily commuting to and from your workplace or ducking out for some personal errands typically falls under private use. 

If your car use blurs the lines, it makes sense to discuss your specific situation with your insurer.  

What are the types of insurance coverage available for business use?

What are exclusions to watch out for?

Many policies exclude coverage for: 

• Pre-existing damage: Fixing damage your car already had before you made the claim won’t make the cut.
• If you haven’t spilled the beans: If you left out claims or driving history when signing up, your claim could get knocked back, either partly or completely.
• Impaired drivers: Any damage, loss, or injury won’t be covered if the driver’s had a few too many or is under the influence.
• Claims you’re already covered for: Got legal liability sorted through another insurance or compo scheme? You can’t double-dip on that one. 

Insurers often slip in exclusions for things like unlicensed drivers or activities you didn’t tell them about (like starting a new Uber side hustle) so it’d be wise not to ignore the fine print in your PDS!   

Is business car insurance more expensive than a standard car insurance?

Let’s look at it this way: Some insurers allow you to use a personal car insurance product for business use – but only to a certain extent. But you’ll generally need a comprehensive level of coverage to access this.  

Whether a comprehensive cover for personal car insurance is less expensive than a lower level of business coverage – say a business car insurance that covers you for third party fire and theft only – depends on a lot of factors: 

• Your type of work: Deliveries or trades tend to be riskier, so premiums are steeper.
• Driving record: A clean history can help bring prices down.
• Your ride: Luxury cars or custom work vans mean higher insurance costs.
• Location: If you drive and park your vehicle around high-risk areas (say if they’re flood-prone or there’s a higher crime rate), you can expect a higher premium.  

You can also view it from this lens: Skipping the right cover could cost you big time. A rejected claim or a massive repair bill might end up hurting your wallet more than getting business car insurance from the get-go.   

When you think about it, getting the right business car insurance is a small price to pay compared to the nightmare of a rejected claim or a huge repair cost, especially if you rely on your vehicle to make a living. 

Take ridesharing, for example. Some insurers won’t cover it. If you’re driving for Uber and have a prang, your personal car insurance won’t cut it. Without the right policy, you could be left paying the hefty repair bill yourself.   

Do I need business car insurance?

If your work involves more than hopping in the car for a daily commute, business car insurance is worth considering. Sure, it’s an extra expense, but the alternative can be far more costly.  

Start a comparison online to find car insurance options suitable for your business.