Insuring Your Company Car for Personal Use

Insuring Company CarWhile it's less and less common, certain types of employees - sales representatives and executives, mainly - are often given the use of a "company" car. Ostensibly, such vehicles are provided by your employer for business use, but many people choose not to maintain their own cars when they have a company car, so they end up using it for personal use as well.

There's nothing illegal about using your company car for personal transportation, but there may be insurance issues. Specifically, your employer's car insurance may only cover you when you are driving for business reasons. If you're not sure, you should check with your company's human resources or fleet management department immediately. If the company insurance is in force no matter why you're using the car, you're fine. If not, you'll need to buy car insurance for when you're driving for non-business reasons. Before you do that, however, you'll also need to know if your spouse or children are also covered if they're driving your company car.

If you own another car, or your spouse owns a car and you're named on the insurance policy, the least expensive way to make sure you have adequate coverage when using your company car for non-work driving is to speak with your current insurance company. You may need to boost your liability coverage a little bit or you might have to get a rider for "driving other cars." (Yes, it's actually called that.) Not everyone sells such policies, however, so you may need to do some research, or ask co-workers about their insurance. The company that provides your homeowners or renters insurance should be able to refer you, if all else fails.

If you do not own another car, you'll want to look for a "non-owner" auto insurance policy. These will cover you no matter what you're driving, and are attached to you, the driver, rather than a specific vehicle. These are sometimes expensive, but most likely you'll only need liability coverage, so you'll save some money there.

The best plan, of course, is to reserve your company car for business driving, and use a personal vehicle for everything else. Unfortunately, that plan can be made impossible if you have a trip that combines business and pleasure.

Whichever type of insurance you ultimately choose, remember to compare the rates and coverage from several companies before committing to one. Even when it comes to insuring a company vehicle, shopping around saves money.