How car insurance works and

Car Insurance Works


Common business journeys that may not be covered by a private policy include:Most of us can simply say personal use and that will cover you for domestic and social purposes.

Many policies will also include commuting under this definition - check your terms and conditions to be sure, and be careful if you're lift sharing (see below).

Note that this differs to van insurance where there's no 'social, domestic, pleasure and commuting' category; if you use a van to commute to even one place of work you'll need commercial van insurance.

But to concentrate on cars, you need to be aware that a 'social, domestic, pleasure and commuting' policy won't cover you if you're using the vehicle for business use, such as driving to meet clients or transporting other members of staff.

If you use your car for your job - for anything other than driving to a single place of work - then you almost certainly need business car insurance.

Otherwise, you risk finding yourself without cover when you need to make a claim.

  • Travelling to a training course
  • Going to the bank
  • Driving to the post office
  • Driving to another office
  • Attending company away days

If you search for cover through Gocompare.com you'll be asked what you use your vehicle for and the options will be:

  • Social only: Covers you for normal day-to-day driving (such as shopping and visiting friends and family) but not commuting
  • Social including commuting: Covers social use plus commuting to a single, permanent place of work
  • Business use: Includes social use and also covers the designated drivers in connection with their jobs (such as driving to different sites or offices, and prearranged meetings away from the normal place of work)
  • Commercial travelling: Covers social use and also using the vehicle for commercial travel, for example delivering goods or door-to-door sales. As there are different definitions of commercial travelling, you should check with the insurance company before you buy

The quotes you see on the results page will reflect the sort of use you've said the vehicle will be put to.

Note that if you're carrying passengers for hire or reward - something becoming more common with the rise of Uber and other ride-sharing apps - you'll almost certainly need taxi insurance.

Will I pay more for commercial car insurance?

There's no getting away from the fact that your car insurance premiums will be higher if you state that you use your vehicle for work.

One way to try to keep the cost down is to compare business car insurance premiums.

So long as you're honest about the car's use when you apply for cover, you'll get appropriate quotes and insurers will price up policies accordingly

Here at Gocompare.com, we check quotes from over 125 insurance brands to help you find the right policy at a competitive price.

VanIt's also important not to over-insure yourself.

Insurers may ask how many miles you're doing on behalf of your company.

If you over-estimate your mileage then you'll simply be paying for cover you don't need. Make a realistic estimate of the miles you put in on behalf of your boss, and don't pay any extra.

Even if you're using your car for business as well as personal driving, all the standard tips for cutting motoring insurance costs apply.

Build up a no-claims bonus, consider improving your vehicle security and keep it off the street at night if possible.

Can I ask my employer to pay the extra?

It's normal for companies to reimburse their staff for business miles in their personal cars.

How much your employer will give you for using your own car for company business depends on the employer and is a matter for negotiation as circumstances vary
The AA

You should also be able to claim for any toll roads or other expenses you incur while on the road for business.

Negotiate this with your employer before you agree to drive your own car.

Employers should also be aware that they have a legal responsibility to ensure that all vehicles used for work purposes conform to road traffic law, are safe, properly maintained and fit for purpose.

This applies whether the vehicle is owned by the business or owned privately.

Different types of business car insurance

If you're running an occasional workplace errand in your car or visiting clients, you won't need the same level of insurance as someone who uses their car commercially, such as a taxi driver.

However, there are still different levels of commercial car insurance and you need to make sure you have the right cover in place.

Employers need to have procedures in place to ensure that all vehicles (irrespective of who owns them) that are used for work purposes conform to road traffic law, are safe and properly maintained, and are fit for purpose
Royal Society for the Prevention of Accidents

If you just do a few miles on behalf of the company and you're not delivering things or driving extensively to sales trips then you probably only need class one business car insurance.

But if you and other named drivers are using the vehicle for business, you'll need class two.

Finally, if you're using your car for selling or commercial travel as well as other named drivers, you'll need class three business car insurance.

Don't worry if you're not sure what level of cover you need. So long as you're honest about the car's use when you apply for cover, you'll get appropriate quotes and insurers will price up policies accordingly.

Van insurance Taxi insurance: Black cab


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