Personal vs. Commercial Auto: The Exclusion That Voids Claims
Jeff Friedlander, Managing Member·5 min read
The most expensive insurance mistake NJ business owners make is hiding in the fine print of a personal policy.
The exclusion nobody reads
Personal auto policies are priced for personal, household driving. To keep that price, they exclude business use — a clause buried in the policy that lets the carrier deny claims arising from work activity. You won’t notice it until you file a claim, which is exactly the wrong time.
How it plays out
The carrier investigates the accident, finds the vehicle was being used for business — a logo, a delivery, tools in the back, a statement you made — and denies coverage. Premium paid in full doesn’t matter; the policy excluded the loss.
The fix
If the vehicle does any business work, put it on a commercial policy. If employees ever drive their own cars for you, add hired and non-owned auto. The premium difference is real but modest; the protection difference is the survival of your business. Not sure where you stand? Our FAQ walks through the tests.