Could you be driving uninsured without realising? Well, if you use your car for business, but haven’t declared it to your insurer you could be
Business car insurance explained
When you insure your car, you must tell your insurer what you’ll be using it for. For example, will it be for basic social and every day driving, or do you need business use car insurance?
The problem is, many people aren’t sure what counts as business use, as Linda Wells, head of Underwriting at Admiral explained: “You need to know the type of use you’ll need for your car, something a lot of people can get confused about as they may not think business use applies to them.
“However, if you drive to multiple locations during your working day or attend meetings in different offices, then you may need to include business use.”
What’s the definition of business use?
Here are the basic classes:
- Social, domestic and pleasure: This covers normal day-to-day driving – such as shopping, visiting friends and going on day trips, but it doesn’t include commuting
- Social and commuting: If you commute you’ll be regularly driving at peak times which carry a greater risk. Even something as simple as driving your car to the train station or dropping someone off at work counts
- Business Class 1: You use your car to drive to places for work – for example, such as switching between sites. It’s not the primary use of the car, but nevertheless, requires a slightly higher level of cover
- Business Class 2: Much the same as Class 1 – but covers you, the policy holder and a named driver
- Business Class 3: For someone who is really racking up the miles – such as a travelling salesman
- Commercial: This covers cars which are primarily used for business, such as if you’re a driving instructor using your own car to give lessons, or a taxi driver.
Adding business use could affect your premium as you’ll be driving more miles on busier and potentially unfamiliar roads. Get in touch with your insurer to see how it can impact you and what savings you might make. Either way, it pays to tell the truth. If you don’t it could affect your policy.
Getting the best deal
It pays, therefore, to make sure you have the right type of policy to match your needs – insurance can be costly so making sure everything on your is accurate is so important.
Your employer might reimburse you for your travel expenses. This might cover both the additional insurance and your fuel. Others provide insurance which covers their employees for any accidents which occur while driving their own car. If so, you might not need business use insurance at all, but it’s always best to check.
You can take measures to bring the costs down, such as using a car with a smaller engine size or installing security devices. You could also agree a mileage limit which could keep costs down, but if you exceed that limit you’ll be uninsured. Alternatively, you could take out a MultiCover Insurance policy and cover your cars and home on one policy and get a MultiCover discount for both.