Will you be using the vehicle for any business or commercial purpose?

This is very much a red flag for potential liability, because the business use of a vehicle also increases the liability exposure tremendously, and many companies will not write a policy with this kind of risk at all, or will surcharge* such an exorbitant amount that no reasonable person would buy the policy from them anyway. You may be asked a series of questions about the use of your vehicle if you disclose a business use. Some companies and agents will instantly “DNQ”* (does not qualify) you for disclosing a commercial use. This means that they cannot and will not sell you an insurance policy.

Business Use

Driving yourself to work is not a business use. Taking care of your business with your car is not a business use. Delivering pizzas or newspapers with your car is a business use, so keep in mind that the undeclared commercial use of a vehicle can and may result in the denial of any potential claim, or the after-the-fact assessment of additional premium. If you use your vehicle commercially, you should insure it as such.

But too often people will reply, when asked this question in one of its many variations, “sure, I take care of my business with my car.” What the question really means is simply “do you operate a business using the vehicle?” Even if you are reimbursed for your mileage by your company, simply driving yourself to and from work in your vehicle is not necessarily a business use, so avoid this surcharge when legitimately possible.

Keep in mind, though, that if you are a salesperson, real estate agent/ broker, or a property manager, for example, you may still be better off with a “personal lines” insurance policy, as opposed to a “commercial” liability policy, even if you do end up paying a surcharge. Ideally, you always want to avoid paying for coverages that you do not need or could not ever possibly use, and while commercial policies make sense under certain circumstances, there are many other cases where that extra premium could be better spent elsewhere. Make sure to discuss your business use with a trusted agent or financial advisor, and if a commercial policy is warranted, by all means get one.