Anyone whose job demands they drive their own vehicle for the purposes of their work will need to pay for business car insurance rather than a standard policy that only covers them for social, domestic and commuting use. Business protection will cover a whole range of uses, such as travelling between different work locations, visiting customers or using your own vehicle to give lifts to other employees. Anything, in fact, that is on behalf of the company.
Although you will be paying higher premiums for business insurance, don’t be tempted to run the risk of sticking with domestic-only cover. Your insurer is unlikely to pay out any claims if it discovers the accident happened while you were on a work trip. For more information see the "how to change your policy guide".
So what do you need to know?
Know what you want
Every insurer will want the answers to a number of key questions when you are applying for business car insurance so you need to have your answers ready. For example, they will want to know the nature of your work and the amount of time you will be behind the wheel. In addition, they will ask you to state how much work-related mileage you are likely to clock up during an average year. This may be difficult to gauge, of course, but an estimate will give them an idea of how much time you intend spending on the road.
Understanding the different levels of cover
Unfortunately there isn’t one standard business car insurance policy. There is a whole host of cover and it is down to you – and the insurance professional with whom you are dealing – to decide which type is most suited to your particular needs. For example, “private and occasional business use” policies cover the main driver or their spouse who only occasionally have to drive for work - but in a vehicle that is not registered in the name of the business. This could be a salesperson, for example.
Then there are “private and business use policies” which provide protection on the same basis as private and occasional business use, but with the additional benefit that the vehicle can be registered to the business itself and the cover will extend to any driver behind the wheel. Finally you have commercial travelling policies which will cover those for whom driving is a permanent aspect of their job. These individuals will be spending a lot of time on the road and this is likely to be reflected in the higher level of premium paid.
Get a good deal
It goes without saying that you need to obtain a selection of quotes in order to find the most cost-effective way of buying cover. Also, speak to others who use their vehicles in their day job to find out which insurers you should be considering. Don’t be afraid to bargain hard with an insurer to get the best deal. They all have some degree of flexibility in the premium so drive a hard bargain. Remember, this is an increasingly competitive field and there is no shortage of providers.
Cutting the cost
As well as the business itself, the cost of cover will also depend on the type of vehicle being driven so it’s worth considering an economical car with a smaller engine. Not only will the running costs be lower but they also tend to benefit from lower premiums. Other ways to reduce your premium include installing security devices like immobilisers, steering wheel locks and tracking systems. However, it’s worth checking which types – and manufacturers – are going to be approved by the insurer.
In addition, parking your vehicle in a secure location overnight, such as in a locked garage or compound, can also reflect in your favour. Similarly, if it is kept in a secure business premises each night then tell your insurer as this can further reduce the amount you’ll pay.
As part of your business insurance package we also suggest that you look into a car warranty extension if you plan on keeping your new car for longer than expected.
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