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Why do I need to put my employer on my personal policy?

Question: Why would I need to name my employer on my personal car insurance policy?

Answer:  An employer usually asks to be added on your car insurance policy as an additional insured so that it can protect its own assets connected to you by your employment.

Normally, companies need to be listed only if you are using your vehicle for some type of business or artisan use. If you use your own car to travel to appointments for good or services, making deliveries or going on sales/service calls, then it’s not unusual for your employer to request to be named on your policy. 

Before using your own car for work purposes, I’d advise you to contact your car insurance company and make sure your current personal auto insurance policy will cover you properly for your job needs.  Many personal policies exclude coverage if you are using your vehicle for certain types of employment. 

Under a business-use exclusion, your car insurance policy can exclude deny coverage if your vehicle is used for livery, which is carrying goods or people for a fee – such as pizza and flower delivery drivers. Real estate agents, home health aides, maid service workers, as well, may not be covered due to the exclusion, it really depends upon the specifics terms of your car insurance policy. (See "Why the pizza guy doesn't have car insurance")

Incidental driving for work, such as going to the bank or to pick up supplies once a week, typically doesn’t fall into this exclusion.

Depending upon your job, you may find out from your insurance agent that you need to get a business-use endorsement or a commercial policy to have your car covered. 

Your insurer can tell you what type of policy you need and why.  If you need a business-use or commercial policy, be aware that your rates will go up.

There is an additional cost for these types of policies because your risks are different from someone who commutes to work and has their car parked all day.  When an auto insurer takes on more risk, your rates reflect it. 

Once it’s determined what type of policy you need, your insurance provider can help you properly list your employer on your policy and advise you if your employer should also list you on its business auto insurance policy. 

Employers may also make this request so that they can obtain a certificate of insurance from your car insurance company as proof that you are properly covered while working for them. This may be a company mandate or a requirement from your employer’s own auto insurance provider.

More articles from Penny Gusner


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