Guide to car insurance classes of use
The 'Use of a car' is one of the more confusing areas of motor insurance and, if you get it wrong, you're effectively 'uninsured'.
When you fill in a form to get a car insurance quote you'll be asked about your car's use – whether you're using it for domestic purposes, for commuting to work, or for business. The 'type of use' has an impact on your premium, because insurers regard different classes of use to carry different risks. A travelling salesperson using the vehicle for business may be regarded as a greater risk than a driver who only uses their car for social purposes, for example – because inevitably the salesperson is likely to spend longer hours behind the wheel, often on busy and unfamiliar roads.
Before you state the use of your car, make sure you understand what each class of use includes – and excludes.
Common types of car use
The most common 'Classes of Use' include:
- Social, domestic and pleasure: The vehicle can be used by the named drivers for social, domestic and pleasure use only – excluding commuting. This offers cover for everyday trips such as visiting the shops, friends or family.
- Commuting: This offers cover for social, domestic and pleasure use as well as for driving to and from a permanent place of work. Dropping someone else off at work could also be classed as commuting.
If the vehicle is used for business purposes other than just commuting, then you will need to look at business cover. Again, there are different classes of business use, including:
- Business use Class 1: This covers the vehicle for use relating to your job, such as driving to meetings or different sites, and may also cover your spouse for your business. Business cover does not extend to cover any other named drivers on the policy, although these named drivers can still use the car for social, domestic and pleasure purposes. It excludes 'commercial travelling' such as delivering goods or selling (e.g. door-to-door sales).
- Business use Class 2 : This class tends to be the main one of the company car market,, and as a general rule usually covers the policyholder plus a named driver for business use such as going to see clients, going on a training course, or going to the bank. Again it usually excludes commercial travelling. Again this class excludes commercial travelling.
- Business use Class 3: This class includes all of the above as well as commercial travelling such as visiting clients, transporting light goods (e.g. delivering flowers), and for some selling purposes (e.g. door-to-door sales).
Less common classes of use include cover for taxi drivers or courier services. Make sure your insurance company has the correct details for your car use – otherwise you may find your insurance company will not pay out if you make a claim.