Business or pleasure? Getting car cover right

Kiwis love their cars. Rarely is a set of wheels merely a means of transport. They’re our rides, our whips, our cruisers and our wagons. They express who we are and what we love in life.

From coupes to convertibles, hatchbacks to SUVs… whatever your drive, the type of insurance you need will depend on what you use your vehicle for. Our quick guide will help you understand the difference between private motor vehicle (PMV or private car insurance) and commercial motor vehicle (CMV) insurance and get the cover you need.

What does private car insurance cover?

Under a private car insurance policy, you’re covered purely for social, recreational or domestic purpose use. In non-insurance speak, that means using your car for everyday things like doing the weekly shop, cruising to the coast for the weekend or visiting friends and whanau.

Commuting to and from your job is also covered, including carpooling with colleagues who contribute to the running costs of your vehicle. Hobbies are covered too, so you can use your vehicle to go fishing, hit the surf, slopes or whatever else floats your boat.

What’s not covered?

Where the water starts to get muddy is when a vehicle is used for commercial venture, which in plain speak means activity that involves payment or income.

So you don’t get caught out, we’ve listed some examples of the kinds of jobs and activities that aren’t covered under a private car insurance policy. If you are:

  • a driving instructor
  • a real estate agent
  • an insurance assessor or inspector
  • a courier or taxi driver (this includes making deliveries of food, parcels etc); or
  • using your car to transport fare paying passengers – for example, driving for ride shares such as Uber or Zoomy…

… none of these are covered under a private car insurance policy. Private carpooling is the exception to this so long as your colleagues etc only contribute to the running costs of your car and nothing over and above that.

What else isn’t covered?

You’re not covered under a private car insurance policy if you use your car:

  • in connection with the motor trade (for example, if you are mechanic or provide breakdown recovery)
  • in any form of selling, debt collection or similar
  • to carry, haul or tow goods, plant machinery or samples in connection with any trade or business other than farming; and
  • in any race, competitive trial or speed test, – on any race track, e.g. in driver training or track days.

If you use your car for a sales role, it’s worth checking with your insurer whether you need to upgrade to a commercial policy. Likewise, if you plan to rent out your vehicle – check the policy you have provides cover for this.

Getting car cover right

The golden rule with insurance is if you’re unsure, check with your insurance company. We’re happy to explain and ensure you have the right cover in place to suit your needs.

Equally, being open and honest when we ask you questions about what you use your car for is a must. The risk of not giving us the information we need to get your cover right is that come claim time, you could be left out of pocket.