Business car insurance explained
By Mark Hooson
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.
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 what if you drive to several different offices or work sites? Perhaps a colleague regularly takes your car to visit clients. Or maybe you drive hundreds of miles a week for business purposes. If so, you will almost certainly need business car insurance. It is often more expensive than standard motor insurance, but it is important to get the right cover for your needs.
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 more risky. They will usually cover more miles, sometimes in heavy traffic and on unfamiliar roads. The chances of a claim therefore increase.
Don't be tempted to lie in an attempt to bring down the cost of insurance. When you apply for business car insurance quotes, the insurer will ask the usual questions about your age, postcode, and the make and model of the car. But you will also have to give details about your business and when and why you drive the vehicle for work. If you are dishonest, you are committing an offence and it could invalidate your policy. Your insurance would not then pay out in the event of a claim.
Different classes of business car insurance
There are different classes of business car insurance cover, though the details can differ between insurers so you should always check the terms and conditions carefully. For example, if you commute to work in your car, make sure it is covered under the definition of social domestic and pleasure, or you will need to arrange additional cover.
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 and 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 is not the same as commercial car insurance, which is aimed primarily at motorists who use their car for commercial purposes such as a taxi or to make deliveries. Again, it is important to remember that the definitions of the different classes differ between insurers.
A car used for business is also not the same as a company car. If you drive a company car, it should be insured by the company that owns or leases the vehicle.
Find cheap business car insurance quotes
Motorists usually pay more for business car insurance so it is especially important to try to keep costs down. One way to save money is to compare quotes from a number of different insurers - and it's easy with MoneySupermarket's online car insurance comparison service.
Motorists can also choose their vehicle with care. Insurers place cars in one of 50 groups - and cars in group one tend to be the cheapest to insure.
Security is another important factor as a secure car is less likely to be stolen. You can often 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 unless the damage is serious. 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 litle bit extra for more extensive cover.
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