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Recently tried to get a quote on auto insurance. Maybe made the mistake of saying more than I should. When asked what I did for a living I said self employed and that is when the questions started about using it for business. They wanted to up my old beater of a car that has limited liability to a commercial vehicle and it basically doubled my rates. Anyone have problems with auto insurance wanting to make your vehicle a commercial vehicle because you use it to drive to garage sales, etc? When asked what you did for a living what did you tell them? Do y’all carry commercial insurance on your vehicles? Any tips or thoughts on this topic?
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Jay, believe it or not the insurance agent rescuedrelics talked to was probably correct. Since I started driving for Uber I’ve had to give this issue a lot more consideration. Apparently if you use your personal vehicle for business purposes on a regular basis you are supposed to get some form of commercial use rider/policy. In my case, if my personal insurance company found out I do Uber they would immediately cancel me and flag me as a high-risk customer which could make it difficult to get another policy at an affordable rate. I’ve looked into getting the proper coverage but the rates are sky high, easily double or triple what I pay now.
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i feel like uber is so much different than thrifting though. you are like a taxi, driving people around. we are just driving to a store to ‘work’. do people who commute to an office say that’s a business vehicle because they’re driving to work? no. but that’s just how i’ve thought of it up until now. i don’t know what my accountant would say about it…
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I agree with Ryanne.
Let’s look at it like this:
I’m using my car to drive to an auction house or thrift store, but most of my driving is just personal use as well. If this was the definition of a Business Vehicle, then anyone driving to work would fall under that definition.Driving for Uber is completely different. You’re assuming much more risk because you’re driving strangers around town. Or if you were a business that let employees use a vehicle to deliver items. The function of the vehicle is almost purely business and also has more risk involved.
We can agree to disagree. Maybe some scavenger insurance agent will pop up here.
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i’ll throw a wrench into this that confuses me. we have a personal car, but we use it for business SOMETIMES and we deduct those business miles from our taxes. so maybe it’s that this car is used only sometimes for business that it can be considered personal. i would love for a scavenger accountant to clear this up. but how does that make sense for an Uber driver? they use their own car personally, but when they work, they use it too.
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Insurance is all about risk. If you drive your car to work (like your fast food job, or a thrift store, or an auction), then your risk is low.
But if you drive for Uber, then your risk is much higher. The vehicle is actually making you money vs the vehicle is taking you somewhere where you then make money.
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Interesting points, Jay, Ryanne, and JasonK. Glad you brought up an accountant, Ryanne, definitely a question I will ask. This agent I spoke with wasn’t interested in letting me explain about how I’m not transporting $1,000 antiques around or that I don’t have passengers, employee drivers, or deliver mail/pizzas, etc. I knew she would never understand reselling junk, so I just left it at that. But fair warning to anyone who gets a quote or has to renew their policy and has to explain their career, especially if they are the only one on their policy, as I am, and can’t use another person in the households job title. They may pounce on you like this woman did and assume things that aren’t true. From now on I will just be saying “I work at home” any further questions will be followed up with “online” or “design work.” Lesson learned.
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I admit Uber is a lot different than thrifting but Uber actually has a commercial policy that covers the driver and passenger when I am on a trip. What the insurance companies have an issue with is actually just the time I spend when i’m NOT on a trip but still out waiting for fares with the Uber app on because Uber’s policy does not cover me during that time. I’d say I actually drive more miles going to yard sales and thrift stores than I do when I’m waiting for an Uber fare so since the insurance company has an issue with the Uber part I’ve been very curious what they think about my scavenging. Another example, my father is a financial planner and has to drive to many different clients for meetings. He actually has to have a special rider on his auto insurance because he is driving his car for business purposes not just a normal daily commute. I admit scavenging is kind of an odd-ball thing that most insurance companies really don’t consider so it’s easier to fly “under the radar” as opposed to something like Uber but I have a feeling we technically are not 100% in compliance just using a normal personal policy.
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If you are full time and you phrase your wording right to your insurance agent, you can actually lower your insurance.
For example, I currently have a 48 total mile round trip to my day job 5 days a week. That does not make my car a “business related car”, but it does affect my insurance rates. Now lets say I switch to full time ebay selling. I would tell my insurance agent I no longer have a commute and work exclusively from home. If they ask what you do, you say you do online retail sales. None of that is a lie, and in reality you DO drive less than someone who commutes to work.
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Thought this was interesting, https://www.esurance.com/info/car/myth-commercial-car-insurance-policies-are-not-just-for-big-business I’m getting in touch with a different agent in my area to see if there are any hard and fast rules, and to lay it all out as to what we resellers do and see their explanation.
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These are interesting questions. We would answer “no” to all of them. This is why I’d say it’s personal. We work from home and use our car like anyone who has a normal job does.
–Are any of your vehicles used for pickup or delivery of goods, including supplies, materials, newspaper, pizza, other food items, or for messenger services?
–Are any of your vehicles used for limousine, taxi service, or other livery service?
–Are any of your vehicles owned or leased by a partnership or corporation?
–Are any of your vehicles registered or titled to a business, corporation, partnership, or DBA (Doing Business As)?
–Do any employees or non-listed drivers drive any of your vehicles on a regular or occasional basis?
–Are any of your vehicles leased or rented to others?
–Are any of your vehicles a pickup, van, or utility vehicle with a gross weight exceeding 10,000 pounds, or do any of your vehicles have a rated load capacity over 2,000 pounds?
–Are any of your vehicles equipped with snowplowing equipment, cooking or catering equipment, bathrooms, altered suspensions, hydraulic lifts, or racing equipment?
–Do any of your vehicles have equipment installed such as ladder racks or permanent toolboxes that are used to support a business?
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I got in touch with an agent at Farmer’s Insurance. I asked if the policy would need to be written for commercial or personal:
-Self employed, by a single person or couple.
-No employees, if there are employees they don’t drive the vehicles, which are registered to the self employed individuals.
-The products purchased were from garage sales, thrift stores, auctions, etc. and usually a purchase price under $100.
-Never transport people or drive to meet clients.The response was:
“That kind of business doesn’t really qualify for commercial auto policy. If you were a real estate, insurance or other type of salesperson/contractor, then yes. You would also need to title the auto in the business name which you would want to discuss with an accountant first to see if it’s worth it. Commercial auto cost is not much more expensive and there are some coverages not available that there are on a personal policy.”
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Rescuedrelics, thanks for sharing the info from Farmers. I’ve been sick all week so have not been following this thread but at least now I don’t feel like I’m hiding from my insurance company by using a personal policy while scavenging. Uber is another whole story. I recently found out that some companies sell a “ride-share” friendly personal auto policy but nobody wants to sell it here in Florida.
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