Insuring A Business Car vs Your Regular Car

When searching for or renewing your car insurance, you may notice a choice of three types of cover on the online form:

  • Social only (otherwise known as Social, Domestic and Pleasure)

SDP covers you as a named driver for those journeys you make that are not work-related. This type of covers you on your day-to-day drive, including trips to the shops and commutes to see friends.

  • Social and commuting

With this level of cover, you are covered for all aspects of SDP cover, with additional cover for your daily commute, ending either with you parking the car at a place of work or other secure car parks from which to commute further by train or bus.

So whether you pick up and drop off a work colleague en-route to the office or commute to a train station from which you continue on to your place of work, social and commuting cover will help to cover your vehicle during the commute itself and while it is parked up during your working hours.

  • Business use

Business use is taken out to cover your vehicle if you use it as part of your work, either to commute from different work locations, travelling to liaise with or delivering goods to customers. Business use can also extend to another driver on the policy, including your spouse, handy if you both work together.

RELATED: 10 Easy Ways to Reduce the Costs of Your Car Insurance

Which Should I Choose?

Your choice of cover can affect the price of your premium, particularly if you use your vehicle as part of your profession – such as a travelling salesman or delivery driver – and you may need specialist business car insurance as a result.

What Is Business Car Insurance?

Business car insurance differs from a regular car insurance policy because it is designed to cover work-related journeys only, these can include tasks such as:

  • Driving to visit customers
  • Driving to another of your company premises
  • Driving to attend a training day or an away day
  • Driving to the bank or post office in order to make payments

In the case of a travelling salesman or delivery driver, the level of cover may have to be extended to include commercial travel in order to insure the vehicle and the contents of it during transit.

Does This Cover Company Cars?

If you drive a company car, your company should be covering it with an insurance policy. It can be worth asking what level of cover you have on the car, if not just for your own peace of mind.

If you are covered on the vehicle by your company’s insurance policy you may not need to take out additional insurance on the vehicle. If you use your own vehicle as part of your everyday business use, then business car insurance is essential to ensure you are covered correctly while on the job.

What About If I Drive A Taxi?

Taxis and other ride-sharing services won’t be covered under a business insurance policy because they have a completely different set of risks as a result, and as such need a completely different type of insurance policy.

If you drive a taxi for a living, either for a fleet or as an independent through ridesharing apps such as Uber then you’ll need specific taxi insurance on your vehicle.

What Can Affect My Premium Price?

When applying for a business car insurance policy, your broker will want to know several important details, which may affect the price of your policy:

  • What work do you do?

Depending on what type of work you do can affect the price of your insurance policy, especially if it means you’ll be clocking up the miles by visiting customers or commuting between multiple sites.

Speaking of which, you may also have to answer:

  • How many miles a year will you cover?

If you clock up many miles during the year as a result of your work, it could mean a difference in your premium price. Long journeys throughout the year can lead to a higher premium, so it can be worth working out your average mileage throughout the year and ensuring as close to that as you can.

Be careful not to overinsure yourself, as while you may think you’re being careful by giving yourself a bit of extra leeway, you may be increasing the cost of your premium as a result. Be as accurate as you can in predicting your yearly mileage, even if the journeys change throughout the year as a result of having to travel to different locations – including to meet customers.

If you work between sites, try and work out the mileage between the sites and estimate how often you will travel between them in order to work out a predicted yearly mileage, which you could then let your insurer know.

  • Do you carry any goods?

If you are a delivery driver or a travelling salesman for a company and carry goods as part of your work, whether using a small van or a car, you may need to add a commercial aspect to your business car insurance.

Check with your broker what is covered as you may need to add this additional cover to protect not only your vehicle but the goods you are carrying too.

What About No Claims Discount?

You are able to accumulate No Claims Discount (NCB) on a business car insurance policy but you may find yourself having to start from scratch. If you use your personal vehicle for work purposes and have accumulated some NCB, this may help to count towards a cheaper premium in future.

As always, it is best to ask your broker during the application process if this is possible.

When it comes to insuring a business car, research is key, so by making sure you are as honest as possible when it comes to setting up a policy, you can help yourself to secure a cheaper premium.


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