When filling in your form in order to get a quote for car insurance, you will be asked as to the type of use – that is, what exactly the insured will be using the car for. The type of use tends to have a bearing on the risk perceived by the insurers, and could affect the premium accordingly. So, for example, a business user may be seen as presenting a greater risk than a purely social and domestic user. This is because the business user is likely to spend more time on the road, including in heavy traffic and unfamiliar routes, which will increase the chance of third party claims.
When arranging car insurance online or over the phone, it is important you stipulate the right use for your car. If you have the wrong use, you may find your insurance company will not pay out on a claim.
The most common types of use covered are as follows:
Social, domestic and pleasure
The vehicle may be used by the named drivers for social, domestic and pleasure use only, excluding commuting. This covers drivers for normal day-to-day driving, such as driving to visit family and friends or shopping.
Provides cover as above for social, domestic and pleasure, and also cover to drive back and forth to a permanent place of work. Travelling to a railway station en route, where the car is parked, is classed as commuting. In addition, dropping someone else off at their place of work may also be classed as commuting – so it is worth checking the policy beforehand to double-check.
…And if the vehicle is being used in connection with work beyond simply commuting, then the insured will require a level of business cover:
Business use: Class 1
This will cover the vehicle in connection with your job, such as driving to different sites away from your place of work. It may also cover a spouse for the business use, but not another named driver – so be sure to check the insurer’s wording. It will exclude commercial use (such as delivery of light goods) and selling (such as door-to-door). All other drivers on the policy get social, domestic, pleasure and commuting use as shown above.
Business use: Class 2
There are a number of variations of Class 2 depending on the insurance provider. The policy will usually cover both the policyholder and a named driver for the business use, although some insurers may stipulate that the two must work in the same occupation. Class 2 will still exclude commercial use and selling.
Business use: Class 3
This will provide business cover for the transportation of light goods (e.g. meal or flower delivery), and some selling purposes (such as door-to-door sales).
There are other classes of use for purposes not mentioned above – for example, cover for taxi drivers or use on a garage forecourt. To get covered for these types of risks you will need a commercial policy.