Does Your Personal Car Insurance Cover Your Gig?

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Many gig economy jobs require you to use your own car. That means you usually need your own insurance as well. Find out if the car insurance policy you already have will cover you.

Does personal car insurance cover side gigs?

Most personal car insurance policies contain language that they are for personal use only. These policies exclude side gigs and other business activities.

For example, you get in an accident on the way to work. You’re probably covered. If you get into an accident while making a delivery, you’re probably not covered.

Does it matter what type of gig you have?

Most gigs will fall under excluded business activities. It doesn’t matter if you’re driving passengersdelivering groceries, or traveling between clients.

The main gray area is when you’re traveling between clients. Normally, your commute is covered. That’s why your insurance will cover you for an accident on the way to work even if you’re headed to do business. A trip between your first and second job could also be considered a commute. On the other hand, if you’re visiting a dozen clients in a day, that’s almost surely uncovered business driving.

Exactly where the line is depends on the language of your policy and laws in your state. Discuss your specific gig with a licensed insurance agent to see whether your personal car insurance coverage will apply.

Can’t you just tell your insurance company you were driving for personal reasons?

Telling your insurance company you were driving for personal reasons to get an excluded claim covered is insurance fraud. In today’s gig economy, the insurance company will likely find out the truth pretty easily.

The most popular gig apps that involved driving share their databases with the insurance company. The insurance company probably already knows you have a gig and can check whether you were working at the time of the accident.

What if the gig app offers insurance?

If your gig app offers insurance, there are three things you need to check.

  • Does your car insurance policy still allow you to use your car for gig work? Some insurance policies cancel policies if you’re involved in driving gigs to avoid disputes over whether you were engaged in your gig at the time of the claim. If this is the case, you’ll still need a new personal car insurance policy.
  • What are the coverage limits? Are the property damage, liability, and other coverages adequate for your needs? Many gig apps offer insurance policies that are more geared towards protecting their customers while protecting their drivers is a secondary concern. For example, you may be covered for bodily injury or fault accident claims, but you might not have medical payments or collision coverage for yourself.
  • Is the coverage always on? Does the coverage protect you 100% of the time or only while you have an order or customer? The time between your jobs could still be excluded by your personal car insurance, so you need to know if the gig insurance remains on.

What kind of car insurance can you get if you need coverage?

There are two alternatives if you do need to buy your own car insurance coverage to cover your gig.

  • A separate commercial auto insurance policy. This has similar coverages to a personal policy but covers business use of your car.
  • A gig endorsement to your personal auto insurance policy. Some insurance companies now have special add-on coverages that give you protection while working popular gigs. What coverage options you have available will vary by state.

The second option will usually be cheaper if you’re eligible, but you should request car insurance quotes for both options to make sure. In addition to letting you save money, having all of your coverage with a single company can avoid getting into a dispute with an insurance company about which auto insurance coverage applies to your accident.

To learn more about how to decide whether you need insurance and where to get it, contact a local insurance agent.

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