Giving back to a local charitable organization is a great way to help your community and spend your time doing something fulfilling. You don’t have to have money to make a difference because you can always donate your time.
No matter what cause you choose, it’s important that you’re prepared for how volunteering will impact your car insurance.
Auto insurance might not be on your mind when you’re picking a charitable cause, but it’s important that you review your coverage before you accept an assignment.
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Your driving habits will change when you’re going to and from volunteer sites.
There’s also a chance you’ll be exposed to more accidents. Here’s what you volunteers need to know about their car insurance premiums and coverage:
What is a usage classification?
If you’re already paying for personal car insurance, you’re already being placed into a usage class. Insurance companies use a lot of risk factors to assess your exposure to claims and vehicle usage is one of them.
The term vehicle usage may be a bit foreign to you because it’s an industry term. When an agent asks you how you drive your car, they are technically asking you for what purpose.
There are three different usage classifications that you can fall into when you’re buying personal car insurance. Insurers will classify your car as one of the following:
- a commuter vehicle
- a pleasure vehicle
- a business vehicle
Pleasure drivers only use their car to go on errands or to run around town. Commuters and business drivers both drive for work, but business drivers go to multiple work sites.
If you’re being charged a pleasure rate, you’ll pay the lowest premiums because driving to stores ten miles from your home doesn’t expose you to as many losses as driving in gridlock traffic to your office that’s ten miles away.
Since auto insurance is all about placing people into risk groups, pleasure drivers carry the lowest risk.
How will you be rated if you’re volunteering?
If you’re currently insuring a pleasure vehicle, it’s possible that your rates could change once you start volunteering. Since you’re not earning money when you volunteer, you don’t automatically become a commuter.
In most cases, when you’re volunteering locally a few times a month, it won’t change your usage class at all.
There’s more of a blurred line when you’re volunteering as much as you would work on a full-time basis. If you’re lucky enough to have the time to give back 30 to 40 hours per week, the insurer might consider your volunteering as work.
If you’re going to spend much of your free time going to food banks and schools, there’s a chance you could be assigned a commuter rating.
When will volunteering be considered business use?
Your endeavors could be treated as a trip to a work site if you’re driving students or seniors around the city. Business usage is defined as a personal vehicle that’s driven to more than one location for business purposes.
While you’re not self-employed as a volunteer, you’re still the same type of risk when you’re transporting your clients to field trips, schools, or doctor appointments.
Updating Your Annual Mileage
Always update your insurance whenever your driving habits change. Not only does vehicle usage matter, your annual mileage estimates matter as well. You’re exposed to more losses when you’re on the road more often.
Drivers who don’t drive often may even get a low-mileage discount.
When you take on assignments that require you to put more miles on your car, you’ll have to increase your annual mileage estimate which can change your premiums. If you go over the threshold for receiving your low-mileage discount, you could get a larger increase.
Will your insurance cover you while you’re volunteering?
When you drive your personal car around to complete your duties during your volunteering assignment, make sure to verify that your insurance will protect you. Since it’s your personal car, your insurer will pay while you’re driving as long as you’re not delivering goods for the organization.
Since your personal insurance is what’s ultimately going to protect you, you must verify that you have sufficient limits.
If you’re liable for an accident while you’re on assignment and the injured party sues you, you need to have adequate liability limits that will hopefully pay for repairs, property replacement, medical bills, and settlements.
Does the organization have insurance that will protect you?
You might not be an employee of the volunteer association or a contractor, but you’re still representing it when you’re volunteering. Since the organization can be sued for the actions of its representatives, they will carry specialty business insurance designed for non-profits.
The specialty insurance that non-profits buy will provide non-owners liability coverage. It doesn’t automatically kick in when there’s a loss. If you’re driving your personal car insurance, your personal liability limits will pay first until they are exhausted.
After those limits are exhausted, the organization’s insurance will take effect.
Add Coverage to Your Policy If You Transport People
If you’re going to transport the clients in your vehicle, it’s always nice to have an added layer of protection. The buffer could make a difference if someone is injured in your car while you’re transporting them.
You can add both Medical Payments and Uninsured Motorist Protection to pay for medical bills that arise after an accident.
- Medical payments will pay for immediate treatment if you’re at fault or not.
- Uninsured Motorist will act as another driver’s liability coverage if they don’t have liability insurance.
Volunteering can expose you to gaps in your coverage. If you don’t have the right level of protection under your current policy, it’s time to shop around for a new policy.
Use your laptop or mobile device and use our comparison shopping tool so that you can get multiple quotes for insurance all at once.