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Driving to work? Don't leave yourself underinsured

A green car coming towards youGiving your insurer the correct information when buying your motor insurance policy is vital if you want to avoid leaving yourself underinsured.

Misunderstanding an insurer's question could leave you without valid insurance when you need it most.

Before Christmas we touched on this in our article life changes you should tell your insurer about.

But with New Year the busiest period for buying car insurance, we thought we’d give you a little more information to make sure you’re adequately covered.

Classes of use

When you get a car insurance quote you’ll be asked to tell the insurer how you intend to use the vehicle.

There are three main classes of use to look out for: social & commuting, social & domestic and business class, which has a couple of separate categories. See below for more detail:

  • Social and domestic (sometimes known as domestic and leisure) – This type of usage means that you use your vehicle for everything except for going to and from work or in connection with your work in any way. For example, a stay at home parent taking the kids to school and going to the shops would fit under this category.
  • Social and commuting – This category of usage allows you to use your vehicle as above but also to travel to and from work. You may not however, use your car in connection with your work. A trip to a client or another office, for example, wouldn’t be covered.
  • Business class one – There are three categories of business class usage. The first will cover the policy holder only (and sometimes the spouse so check with your insurer) to use their vehicle in the ways outlined above, but also in connection with their work. It excludes using the vehicle for commercial purposes, for example making deliveries or selling.
  • Business class two – Once again this class of insurance builds on business class one, this time allowing for named drivers to also use the vehicle in connection with work, but still not for commercial purposes. Some insurers may stipulate that you work in the same profession for this, so check before you buy.
  • Business class three – This class allows the policy holder and any named driver to use the car for commercial purposes (i.e. the transportation of light good and some selling purposes). Always check with the insurer for details about what the policy covers specifically.

Common mistakes

Drivers often find themselves underinsured by mistaking the difference between social and commuting use, and business class one.

If, for example, you were insured for social and commuting and during a work day you were required to visit a client’s house, or perhaps another site, you would be breaching the terms of the policy contract.

If you were to crash on that journey, the insurer would be well within its right to deny your claim and void your insurance policy.

Even if you made a claim on a journey which was covered under your usage, and during the investigation it emerged that you, on occasion, use your car in connection with work, your claim would most likely be denied.

Even if you have business class insurance and find yourself dropping a few things to customers' or clients' houses, unless you are specifically covered for that activity (it’s classed as carrying light goods and is usually only covered by business class three insurance) you would be driving without a valid policy.

Golden rules

We got in touch with Malcolm Tarling, spokesman for the Association of British Insurers (ABI), who says: “The golden rule is, make sure that the scope of cover you have reflects what you will use your vehicle for. 

"If your usage needs change mid-way through the policy, contact your insurer as they may be able to change the scope of cover (this may attract an additional premium).”

So, before you buy your policy this year, think carefully about exactly what you will be using your car for and make sure you’re covered for it, or you could find yourself without cover if you come to claim.