Driving Your Own Car for Work: What Your Employer Owes You

On this page:

• What Labor Code 2802 says
• Work driving versus commuting
• How reimbursement is usually handled
• Whose insurance applies on a work errand
• If you crash on the job
• Records worth keeping
• At a glance

Plenty of Californians drive their own cars for work without thinking twice about it: the sales rep visiting clients, the home health aide driving between patients, the office worker sent to the bank or the post office. Two questions follow. Who pays for the miles? And whose insurance pays if something goes wrong?

What Labor Code 2802 says

Section 2802 is broad. An employer must indemnify an employee for all necessary expenditures or losses the employee incurs in direct consequence of carrying out their duties, or of following the employer's directions. Reimbursement awards carry interest from the date the expense was incurred, and "necessary expenditures or losses" includes reasonable costs, including attorney's fees, of enforcing the right. The Labor Commissioner can also issue citations against employers who do not reimburse what is owed.

The statute does not mention cars by name. But using a personal vehicle to do the job is one of the most common expenses it reaches, which is why so many California employers have a mileage reimbursement policy.

Work driving versus commuting

Ordinary commuting between home and your usual workplace is generally treated as personal driving rather than driving in the discharge of your duties. The picture changes when the employer sends you somewhere: client visits, deliveries, travel between job sites, errands during the workday. Those miles are the ones a reimbursement claim is usually about. If your situation is unusual, such as a job with no fixed workplace, it is worth asking the employer how it classifies your driving, in writing.

How reimbursement is usually handled

Employers commonly pay a set amount per mile, which is simple to track and meant to cover fuel, wear, maintenance and a share of insurance. Some pay a flat car allowance or reimburse actual costs instead. Whether a particular method covers your real expenses is a question of fact, and the law's standard is reimbursement of what was necessary, not of whatever figure the employer picked. If you think the amount falls short, keep records and raise it.

Whose insurance applies on a work errand

For liability, the starting point is your own policy. Under Insurance Code section 11580.9, when more than one liability policy applies to a vehicle, the policy on which that vehicle is described or rated as an owned car pays first. Your car, your policy.

That makes disclosure important. California allows insurers to rate on the type of use, such as pleasure, commute, business or farm use, so a car used for regular work driving should be described that way. A personal policy that was bought for commuting may treat frequent business use differently; how it does varies by insurance company, so ask before you rely on it.

Some employers also carry coverage for employees' own cars used on company business, often written to apply after the employee's policy. Whether yours does is a fair question for HR or the company's risk manager.

If you crash on the job

• Injuries to others are claimed first against your liability coverage, and the employer may be drawn in as well because you were working.
• Damage to your car is a collision claim on your own policy, subject to your deductible, if you carry collision.
• Your own injuries on a work errand can raise workers' compensation questions, which belong with your employer and its carrier.
• Your deductible and other losses: employees sometimes ask an employer to cover a deductible as a loss incurred on the job. Whether it qualifies under section 2802 depends on the facts, so raise it promptly and in writing.

Records worth keeping

Keep a simple trip log with the date, start and end points, purpose and miles, or use a mileage app. Save the reimbursement policy and any emails assigning driving to you. If you ever need to show what you were owed, or that a crash happened on a work errand, those records do most of the work.

At a glance

If you have started driving for work and are not sure your policy describes the car correctly, you can have a licensed broker review it in a couple of minutes.