Understanding Business Car Insurance
Motor insurance can be a complicated product, and nothing proves this more than the distinction between standard car insurance and business car insurance. Many people may not know that they are not protected by their insurance if they are using their car for work, absent their daily commute to their workplace. This guide will explain business car insurance, including when it is needed, as well as the benefits and drawbacks of obtaining it.
Who Needs Business Car Insurance
The short answer to this question is anyone who is using their car in the course of business other than driving to and from a main place of work, such as a daily commute. This means that anyone who drives to multiple different sites for work, uses their car to transport goods for work, to pick up clients or executives, or uses their car to do anything on behalf of the company, must have business car insurance.
The reason why business car insurance is required is that the price of insurance is based on statistics and the risk faced by an insurance agency. Using a car for business increases the risk that the insurance agency faces. You will be carrying other persons or valuable goods more frequently, and that adds to the value that an insurance company would have to pay out in the event of a claim. As a result, if you are using your car for business purposes and make a claim, that claim could be invalidated, leaving you with a hefty bill.
Types of Business Car Insurance
There are a few different types of business car insurance, and each is designed to be appropriate for different uses. The different types include:
- Commercial travelling – this type of policy is designed for individuals that travel as a regular aspect of their job. They spend much of their time on the road, and thus face higher insurance premiums because of the increased exposure to risk
- Business use by you – this type of cover is best for individuals who sometimes use their car to conduct business, and are the only people who do so. Local salespersons who have to meet with clients or supervisors who have to travel to different sites are good examples of individuals who would benefit from business use by you insurance.
- Business use for all drivers – These policies are similar to business use by you policies, but they can cover multiple drivers. These policies are ideal for a vehicle that is available for use to many people in your business for various business processes.
Different companies offer different terms and conditions on these types of policies, and they are too complex to cover in this guide, so you should be sure to talk to different insurance companies to ensure that you understand exactly what your policy covers.
Getting the Best Price on Business Car Insurance
There are a few ways that you can ensure you get the best deal on business car insurance. One important thing to keep in mind is that, like any business to business transaction, there is room for negotiation. Insurance shoppers can use this to their advantage because of the number of different providers on the market. Many people have reported getting a better deal after telling a company that they are getting a lower rate offer from a competitor.
Another excellent way to reduce the cost of business car insurance is to have security devices installed to decrease the risk of theft. This fits within a broader strategy of minimizing the risk the insurance company faces for covering your car.
Additionally, as prices are based on risk, they can be lowered by choosing a safe, reliable car. High performance vehicles aren’t just a misallocation of business resources, they increase the risk of an expensive accident and so cost more to insure.
As you can see, it is important and advantageous to obtain business car insurance if you are going to use your car for business. Failure to do so can result in an invalidated claim, which can be devastating for you personally as well as your business. However, following the advice in this guide will help ensure that you get the best price for business car insurance and keep costs manageable.