It is interesting to know that a standard car insurance policy covers your car for so-called social, domestic and personal use, which includes everyday driving such as visiting friends, the shops or a day out.
However, if you use your car in connection with your work, standard policies may not offer the protection you think.
Well, just like the standard policies, many policies also automatically cover your car if you commute to and from a regular place of work. So, if you drive the car to the same office every day or park in the same station car park, you would be insured. But it’s always advisable to check this with your insurer to make sure you’re not under-insured.
Anyone whose job demands they drive their own car for the purposes of their work will need to pay for business car insurance. This is different from a standard policy, which only provides cover for social use and commuting as we earlier states in the preceding section of this post.
Business car insurance can cover a wide range of uses, such as travelling between different work locations, visiting customers or driving around other employees. Anything, in fact, that’s on behalf of the company. Although you’ll likely pay higher premiums for business car insurance, don’t be tempted to run the risk of sticking with a standard cover.
This could lead to your policy being invalidated. The question now is what is business car insurance? Is this form of insurance different from commercial car insurance?
What is business car insurance?
If you drive to several different offices or work sites, if a colleague regularly takes your car to visit clients, or if you drive hundreds of miles a week for business purposes you will need business vehicle insurance.
Car insurance for business use is different from commercial car insurance, which is what you would need if you drove a taxi or a delivery van. If you have a company vehicle, insurance may not be required as the car should be insured by the company who leases or owns the vehicle. You should check this with your employer.
Know what you want
Every insurer will want the answers to a number of key questions when you’re applying for business car insurance, so you need to have your answers ready. For example, they’ll want to know the nature of your work, the amount of time you’ll be behind the wheel, and how many work-related miles you’re likely to clock up during an average year.
This may be difficult to gauge, of course, but an estimate will give them an idea of how much time you’ll be spending on the road.
Understand the different levels of cover
Unfortunately, there isn’t one standard business car insurance policy. There is a range of options and it’s down to you to decide which type is most suited to your particular needs.
Most policies will fall into one of the following three categories:
– Business use by you: these policies can cover the main driver
– often with the option to add a spouse: to drive in connection with their business, including away from their normal place of work. This could be a salesperson, for example.
– Business use for all drivers: these offer a similar level of cover as the option above, but with the added benefit that more than one driver can be included in the policy.
– Commercial travelling policies: these can cover people who drive as a permanent aspect of their job. These individuals will be spending a lot of time on the road, and this is likely to be reflected in the policy price.
Because these policy types are complicated and consist of lots of different factors. So it’s best to check the terms and conditions and confirm directly with the insurer that the policy fully covers you before you buy.
Different classes of business car insurance
Business use car insurance comes in several different classes, depending on what level of cover you need. The different classes also vary from insurer to insurer, so always double check the terms and conditions of each policy carefully.
You will probably need class 1 business use if you drive your car to multiple sites or offices, as well as your usual place of work. Most insurers also include a spouse on this type of policy, but would not insure the car for business use for any other named driver.
The next level of business car insurance generally covers the policyholder, plus a named driver who uses the car to travel between different sites. Someone who travels extensively in the car for work will almost certainly need class 3 business use.
Commercial car insurance
Business car insurance policies are not the same as commercial insurance policies. Commercial car insurance is primarily aimed at motorists who use their car for their jobs, such as a taxi driver or a delivery driver. The price of a commercial car insurance quote will depend on exactly how and why you use your car professionally.
Again, it is important to remember that the definitions of the different classes differ between insurers. Business car insurance also differs from company car insurance. If you drive a company car, the company car policy should be taken out by the company that owns or leases the vehicle.
Get a good deal
To get a competitive price, you need to compare a selection of quotes to find the most cost-effective option for you. Also, speak to others who use their cars in their day job to find out which insurers you should be considering.
And don’t be afraid to bargain with an insurer to get the best deal – they all have some degree of flexibility in the premium. Remember, this is an increasingly competitive field and there is no shortage of providers.
Business car insurance is typically more expensive than standard cover because a motorist who drives a vehicle for business, as well as pleasure, is deemed riskier. They will usually cover more miles, sometimes in heavy traffic and on unfamiliar roads. The chances of a claim therefore increase.
It’s important not to lie in order to bring down the cost of insurance. I fail to disclose the fact that you drive your car to work, you are committing an offence and could invalidate your policy – meaning your insurance would not pay out in the event of a claim.
When getting a business car insurance quote, you will need to answer the usual questions about your age, postcode and the make and model of your car, as well as details about your business, and when and why your drive for work.
Cutting the cost
As well as the business itself, the cost of cover will depend on the car being driven, so it’s worth considering an economical car with a small engine. Not only will the running costs be lower but they also tend to benefit from lower premiums.
Other ways to reduce your premium include installing security devices like immobilisers, steering locks and tracking systems.
Commercial car insurance
Business car insurance policies are not the same as commercial insurance policies. Commercial car insurance is primarily aimed at motorists who use their car for their jobs, such as a taxi driver or a delivery driver.
The price of a commercial car insurance quote will depend on exactly how and why you use your car professionally. Again, it is important to remember that the definitions of the different classes differ between insurers. Business car insurance also differs from company car insurance.
If you drive a company car, the company car policy should be taken out by the company that owns or leases the vehicle.
Find cheap business car insurance quotes
As this type of insurance is usually more expensive, there’s even more incentive to find cheap business car insurance. The best way to save money is to compare car insurance quotes from a number of different insurers.
It’s easy to do this with MoneySuperMarket: you’ll be asked to declare how you use your car when you’re providing details about yourself and your vehicle. Once you’ve filled in all your details, you can compare quotes from a range of insurers.
Save money on your business car insurance
There are a number of factors that will affect your insurance premium. Your choice of vehicle has a big impact: insurers place cars in one of 50 car insurance groups, and cars in group one tend to be the cheapest to insure.
The security of your vehicle will also have an influence on price, as a secure car is less likely to be stolen. You might be able to reduce your premium if you fit an approved alarm and immobiliser, and keep your car in a locked garage overnight. Insurers reward careful drivers with lower premiums, so try not to claim for minor issues.
By not claiming, you can then build up a no claims discount and potentially cut the cost of cover by as much as 75%.
No one wants to pay over the odds for business car insurance but it is also important to remember that the cheapest policy is not always the best. You might, for example, want to pay a little bit extra for more extensive cover.
You can also increase the voluntary excess to reduce the premium price – but make sure the excess is affordable, in case you need to claim.
Finally, when you review your quotes, you should consider the quality score associated with each policy. Online insurance companies rate each policy on a number of factors that their customers find most important, to highlight how extensive the cover is.