A Guide To Business Car Insurance

Business Car InsuranceMost people will use regular car insurance to go to work and drive back home. This is enough insurance cover for going to a certain business location on a regular basis where you will park your car until it’s time to drive home again.

However, if you’re using your car to travel to many places as part of your business, then you’re not likely to be using regular car insurance. Instead, you’ll be using a special insurance for business called “business car insurance.”

This insurance is for someone who shuttles between one regular business office to other business locations. For example, a person may have to attend meetings or conduct seminars in venues away from the home office.

If you only have regular car insurance while travelling from one place of business to another, the insurer may not cover you for an accident. The premium you pay does not cover the risk associated with business-related travel. Since you are using the car more than if you simply worked in one location, the level of accident risk has increased.

Regular car insurance is known in the insurance industry as SDP cover. This means, the car is used for “social, domestic, and pleasure” purposes. The cover includes driving to work and back home, shopping excursions, and visits to family, friends, and social events. In other words, normal daily automobile uses.

Business car insurance is a separate and specific cover. It applies when the car is used occasionally for business, regularly for business, or only for business. The difference between the three categories is one of degree.

Here are some definitions of these three categories.

  • Occasional business use means that it is used for both private and business use.
  • Regular business use means that is has some private use but it is mainly for business. The car, for the most part, is used for earning a living.
  • Only for business use means that it has no private use but only business use. The car is only used for earning a living. An example of such usage is a salesman who uses a car to visit customers.

Tips on How to Shop For Cheap Business Car Insurance

The best way to get low premiums and discounts is becoming very clear on how the car will be used and communicating this information to the insurer. Decide on how the car will be used. Will it be for occasional business use, regular business use, or only for commercial use? By getting clear on the category you fit in, you will avoid under insuring your car. The quotes and the cover you receive will depend on how you intend using the car. The quote is designed to cover the risk of your car trips and the lower the perceived risk the cheaper it will be. Usually, unless you are travelling long distances or drive in an urban area well known for a high accident rate, the quote will be reasonable.

Here are some ways you can reduce your premiums:

  • By establishing a realistic mileage limit. You can calculate this by estimating the business territory that you will cover over a specific period of time.
  • By parking in a safe location. For example, you might use a designated business parking area in a secure compound for storage at nights.
  • By improving vehicle security. You can do this by adding a security alarm or device.
  • By consenting to a higher voluntary excess.
  • By driving a car with a small engine.

Plan Ahead With The Right Cover

The whole idea of getting insurance for your car is to avoid paying for costly accidents out of your own pocket. In many cases, an accident can cost far more than you are earning. So it only makes sense to get cover if you do more than drive your car to work and park it. Business car insurance is not only for people who just use their car for commercial purposes. It includes those who do more than drive their car to work and park it until it is time to go home.

Often a job may require that you do business errands in your car or that you travel to other offices. In this case, it is a wise decision to make sure these trips, even if they are brief and short, have adequate cover.