Driving to and from work isn’t the same as driving for work. While both require you to use your car, insurance companies don’t consider commuting to an office to be the same as driving to a customer’s home or office.
From a statistical perspective, the more often you drive the higher the chance of getting into an accident. It’s one reason why car insurance rates are higher for people who commute to work. Often driving in rush-hour bumper-to-bumper conditions when more cars are on the road commuters have a greater chance of getting involved in a collision which is why they pay greater premiums than drivers who reserve the car for weekend use.
If you use your vehicle for business purposes (which include driving to a customer’s home or place of work), you will also need to inform your insurance company. You may need to pay higher rates or purchase a commercial vehicle policy.
Business car insurance is different from the standard personal car insurance policy. Your personal insurance only covers the use of your car for social use or commuting. Commercial vehicle insurance covers driving your vehicle for business purposes.
Why is driving for work treated differently?
There are many reasons insurance companies treat business use of vehicles differently, including:
- You may be transporting other people (clients or coworkers or employees).
- You may have extra equipment installed in or on the vehicle.
- You may be carrying business equipment or materials.
- You may drive more and on unfamiliar roads or in bad weather which can increase the chance of an accident.
- A business is more likely to be sued if involved in an accident.
While this may not be true for everyone who drives their personal car for work they are considerations your insurance company will take into consideration when setting your insurance premiums.
What happens if I don’t bother with Business Use coverage?
You may decide that you don’t want to inform your insurance company about using your vehicle for commercial purposes. However, the consequences can be that a claim may be denied or your insurance could be voided if your insurer finds out.
This type of omission is misrepresentation.
If I drive for work only occasionally, do I need a commercial vehicle policy?
You should speak to your insurance broker about your individual circumstances. Some insurers are more lenient on what they define as commercial use. Your broker can advise you on what type of coverage you need for your situation.