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UPDATED: Jul 18, 2017
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If you want to give back, volunteering through a local charitable organization is a great way to help others and make a difference. You can choose a cause that’s dear to your heart and decide what type of work you’ll do to be charitable.
Unfortunately, many volunteers simply aren’t aware of how volunteering can expose them to gaps within their auto insurance coverage.
Even though auto insurance isn’t the first thing that’s going to come to mind when you begin working with an organization, it’s important that you discuss your coverage with your agent before you drive for an assignment.
If you don’t fully understand which driving habits are covered and which aren’t, you could be left with damage, lawsuits and denied claims all for doing good.
What is vehicle usage and why does it matter?
You might not feel like volunteering something you’ll need to mention if you’re never asked when you’re getting auto insurance quotes.
What you might not know is that you are actually asked about how your car is used, and you’re expected to disclose this information at that time.
Vehicle usage is extremely important to carriers that are providing drivers with thousands of dollars in physical damage coverage and even more in liability coverage.
The reason why usage is so important is because it is has a direct effect on your likelihood of filing a claim.
If you tend to drive just a few miles around town for groceries, you’re exposure to claims is much lower than your neighbor who drives 30 miles in gridlock traffic to the office.
Out of the usage classifications that are offered in personal auto insurance, some are riskier than others. The riskier you are as a household, the higher your premiums will be.
In knowing this, you can understand why usage is a risk factor and why you’re expected to provide the most accurate answers possible when you’re filling out your application.
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Classifications of Risk
If you’re curious as to the classifications that you can select from when you’re buying a personal policy, you’ll need to know what each classification means.
— Pleasure Use
If you’re classified as a pleasure user, you only drive to run errands or rarely for trips.
You can’t drive your vehicle to and from school, work or transport people for money and use this classification.
If you do fit the definition, pleasure usage is the cheapest class to assign to a vehicle.
— Commute Use
If you’re a commuter, it doesn’t mean that you have to drive in the commuter lane. It simply means that you’re driving your vehicle to and from one location to go to school or to work.
To be considered a commute, you must be completing training or getting paid for your services. Volunteering doesn’t count under the commute class.
Many insurance companies will use a tier structure to set rates within the commuter class. If you drive just 3 to 5 miles for commute, you’ll pay close to pleasure rates.
However, if you’re driving 20 or more miles, you’ll be on the higher end of the scale.
— Business Use
If you’re self-employed or you do business where you go to more than one location at a time, you may be able to classify your vehicles as business use under your personal auto insurance.
For this to happen, you must drive the vehicle for both personal and valid business purposes. If the vehicle is used only to conduct business, you’ll need a business or commercial policy instead of a personal one.
When Volunteering Can Be Considered Work
As with all types of insurance, there are usage restrictions. One that you might not naturally be interested in researching is when volunteering might be considered work.
To you, your time spent volunteering is more than just work, but to your insurers it’s quite possible that those endeavors could be treated as a trip to this office.
This is especially true if you’re driving others around during your assignment.
If you’re driving students to a special sponsored field trip in your own car or you’re driving seniors to their doctor’s appointments, it’s not uncommon for the insurer to assign you to a business rate class.
You’re not actually earning money, but you’re transporting clients of the organization to different locations much like you would do as a business user.
In other cases where you’re only driving to a location to hand out food or to help, you can keep your pleasure usage.
Does the volunteer organization provide coverage for volunteers?
If you’re driving your own car for a project, you should sit down and discuss the gaps in your insurance with the organization. While it’s best to talk to your agent, the organization has more than likely dealt with the insurance nightmare.
You could learn that the organization has their own non-owned auto insurance that’ll kick in after your personal insurance pays.
The non-owned insurance will act as secondary insurance and will pay if there’s a catastrophic loss.
The non-owned insurance only applies to liability claims that occur while you’re volunteering and not for your own personal reasons.
How are you covered if you drive the organization’s vehicle?
If you drive the nonprofit’s vehicle, the company will have a commercial auto policy that offers blanket protection. It provides liability, physical damage, and even medical payments to cover the driver.
This coverage only applies while you’re in the non profit car.
Risk management is extremely important at every stage in your life. If you’re at a stage where you’re going to dedicate free time to volunteer work, you’ll need to learn where insurance gaps might lie.
If you feel like your current insurer hasn’t answered your questions adequately, it might be time to consider switching. Use an auto insurance comparison tool to compare rates with the click of a button.
After you’ve done the comparisons, choose a reputable company that offers excellent service and great insurance rates.