Business Car Insurance – All You Need to Know

We’ve all rubbernecked a collision, where one car has shunted into the back of another. Every year, there are millions of car accidents and a quarter involve a business driver.

That doesn’t necessarily mean the obvious ones like a delivery vehicle or a taxi. It could be someone driving across town to a meeting or nipping around the corner to a different work site.

If you’re involved in a crash while driving for business purposes and you haven’t got the right insurance policy, the likelihood is you won’t get a single penny in compensation. That could mean your car being off the road indefinitely.

If you’re not sure if you should have business car insurance, here’s a quick guide to all you need to know.

You DON’T need it if you:

•      Only use your car to get to and from work. A standard Social Domestic and Personal policy should cover you if you drive to the same office every day or leave your car in the same car park or train station. It’s still worth double-checking with your insurance company to be on the safe side though.
•      Have a company car or van. The vehicle insurance should be covered by your employers – but again, it’s worth asking the question.

You DO need it if you:

•      Travel to business meetings
•      Run work errands
•      Make deliveries or collections
•      Travel between different offices or sites
•      Ferry colleagues or clients around
•      Allow your work mates to use your car
•      Clock up a lot of work-related mileage

Business car insurance – the facts:

•      It’s not the same as commercial car insurance, which is what you need if you drive a delivery van or taxi.
•      It is more expensive than standard insurance as you’re considered more of a risk due to being on the road more, often in heavy traffic and in unfamiliar places.
•      If you fail to disclose the fact that you use your car for work to keep costs down, and you’re involved in an accident, your insurance will be invalid, and you’ll have wasted all that money for zilch.

Ways to drive down the cost:

•      Consider the car you drive. Insurers place cars in one of 50 groups, with cars in group one the cheapest to cover.
•      Fit an approved car alarm and immobiliser as good security will reduce the cost of your premium.
•      If possible, keep your car stored in a garage or on a drive overnight, rather than on the road. Again, insurers like to know the risk of theft or damage is reduced.
•      Never claim for minor issues but instead build up a healthy no-claims discount as you could reduce the cost of your policy by half.
•      Increase the voluntary excess you’d pay in the event of an accident – but make sure it’s affordable.

Finally, there are three different types of business car insurance – Class 1, 2 and 3. Class 1 is the cheapest. Do your homework carefully and make sure you’re not paying for stuff you don’t need. Check the terms and conditions and have a chat with your insurance provider to make sure you’re going for the right policy before you buy.