Did you know that if you use your car for business purposes, you’re required to add business use to your car insurance? In this guide, we’ll cover the different classes of business car insurance, explain how much does it cost to add business use to your car insurance and give you some tips on how to reduce the costs of your premiums.
Let’s dive in.
Your standard car insurance covers you for what is known as Social, Domestic and Pleasure use which includes your normal day-to-day driving and commutes to and from your place of work.
But if your job requires you to use your car extensively for business purposes such as visiting different offices or sites, driving clients around or taking on long-distance work-related trips, and you’ll need a specialised business car insurance policy on top of your standard one so you can get the right cover.
If you fail to inform your insurer that you’re using your car for business and you get involved in an accident, they may invalidate your policy and reject your claim.
Car insurance policies for business use are divided into three classes, each offering a different level of cover. As a general rule of thumb, the more you use your car for business, the higher the class of policy you’ll need.
It’s worth noting that if you use your vehicle primarily for business, such as taxi driving, uber or delivery, you’re required to take out a specialist insurance policy known as commercial car insurance.
Generally, car insurance policies for business use tend to cost more than standard policies.
Apart from the fact that business users most certainly will rack up a lot more miles than the average driver, they’ll also be doing a lot of their driving during busy hours and be visiting places that they’re unfamiliar with.
All of this increases the risk of an accident and therefore raises the likelihood of claiming, which is why business car insurance premiums are higher than on a standard policy. Still, if you are using two cars there is the option to insure both of them in the same name.
However, the exact cost of business car insurance will mainly depend on the type of policy you have, as well as several other factors, including:
So, if you’re driving only a few miles each day on quiet roads, your premiums are likely to be much lower than on someone who needs to spend lot more hours on busy roads.
Adding business use to your car insurance will most certainly cost you some extra, but there are always ways to keep the costs down.
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So, how much does it cost to add business use to car insurance? Adding business insurance to your car can be costly, but it is something that needs to be done if you use your vehicle for business purposes on a regular basis. Hopefully, by following our tips on reducing your business car insurance premiums, you’ll find yourself a good deal at an affordable price.
My name is Marija, and I'm a financial writer at DontDisappointMe. Although finance might not be everyone's cup of tea, my 10+ years of working in one of the biggest banks in my country, and my interest in extensive research on everything finance/investment-related, have made me somewhat of an expert in the field (if I do say so myself). No longer having the passion to work in a corporate setting, I decided that I couldn't let all of this knowledge go to waste so I started writing. And, here I am! Today I try to share my knowledge with my audience in the hopes of making this topic as simple and interesting as possible. In my leisure time, I like spending time with my family and travelling to new locations.