Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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The lowdown...

  • Determining which expenses qualify as business expenses is not always an easy task
  • You may be able to consider your vehicle insurance a business expense, which means that you can include it in your annual expenses
  • There may be stipulations that you need to pay attention to when it comes to your vehicle insurance and being able to classify it as a business expense
  • In many situations, if you can show that the cost of the car’s insurance policy is necessary and reasonable for business operations, then it can be considered an expense
  • If you are using the vehicle for more personal reasons instead of business reasons, then you may not be able to consider it an expense

Determining if an expense can be labeled a business expense is not always straightforward or simple, and vehicle insurance is no exception.

If you carry vehicle insurance and want to consider it a business expense you may be able to, but it can depend on which type of insurance you carry and what your business operations are.

It’s crucial that you remember to speak with your insurance provider about your business needs and your personal needs; they can help you evaluate if your insurance is right for you.

Enter your zip code in our free comparison tool to find the rate quote that’s right for you.

The Type of Business Can Be a Determining Factor


Your car insurance may end up being a business expense, but this can vary depending on what type of business you operate and how you use the vehicle.

The Internal Revenue Service considers car insurance a business expense when it can be defined as a necessary and ordinary expense.

In many cases, this means that the expense of car insurance needs to be an ordinarily expected expense within your industry.

A company that delivers goods to customers regularly could claim this is ordinary, while a company that operates only websites and works remotely may not be able to claim this.

You must also use your vehicle for business use more than you use it for personal reasons, meaning that documenting how you use your vehicle and when can be a requirement; which may be more difficult than anticipated.

Before making a decision on what insurance policy to purchase, speak to your insurance carrier about your business, your needs, and your goals. They can often help you evaluate if the coverage you are interested in meets all of these needs.

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Make Sure You Carry The Proper Insurance Type

When you decide to purchase insurance for your car, it’s important that you choose the best coverage options to meet your needs; this may include purchasing a policy that could be considered a business expense.

Depending on the manner that you run your business, you may have purchased a Businessowners Policy, but this policy does not cover vehicles used for business purposes.

Just like with personal policies, you often need to have a separate business vehicle policy to have coverage for your business-use vehicles. This policy type was created to protect against the risks and losses associated with using a car in business operations.

For example, if you are using a vehicle to transport goods to a customer and are involved in a collision, the goods could be damaged in addition to the vehicle.

A personal auto policy may not cover the replacement cost of the goods, whereas a business vehicle policy is designed to help you recover from these losses.

Additionally, the liability that a business is exposed to when operating a vehicle is usually just as high, if not higher, than the liability an individual driver is exposed to.

While you may rely on your personal auto policy to provide some small, basic levels of coverage for business use, the levels provided may not be adequate.

It’s important to speak to your insurance carrier about your policy limits and terms; these often list what is covered and any exclusions. If your current provider cannot meet your policy needs or requirements, you may need to consider looking for another provider that can.



Deciding that expenses you have are related to your business’s operations can be a difficult process, but there are several things to keep in mind when trying to make this determination.

This decision can be even more difficult when car insurance comes into play because personal use and business use can overlap. Weigh these two scenarios:

  • If you have been using your vehicle for personal use, or your business does not use a vehicle in traditional operations, it can be difficult to call your vehicle insurance a business-related expense.
  • If your business normally requires a vehicle to run day-to-day operations, then you may be able to call your vehicle insurance a business expense.

The kind of vehicle insurance that you are carrying can also be a factor. When you carry personal auto insurance policies, you may not be able to label it a business expense. Also, your provider may have a harder time covering you under a personal auto policy if you have an accident.

If you choose to purchase business vehicle insurance, however, it may be easier to label your coverage as a business expense.

In the event of an accident relating to the business use of a vehicle, a business vehicle insurance policy would be a better choice to provide coverage for your loss.

There are resources accessible to business owners and decision makers to help you choose the best policy coverage to meet your needs; some of these resources may also help you determine if this coverage is a business expense.

Insurance providers can help you evaluate if your policy options meet your business needs, usually based on your claimed operations.

Additionally, the Internal Revenue Service runs a small business website that has a lot of information about business operations and expenses.

Don’t overpay for the coverage you need. Use our comparison tool to find get started in your search for the insurer that’s right for you!