Motor Insurance: What Class of Use Do I Need?Thu, 12/06/2014
Drivers can use their vehicle for a multitude of different purposes, from travelling to the local shops, driving to and from a work place, dropping off the children at school etc . Insurance companies condense these uses into specific “Classes of Use” to enable them to charge the appropriate premium for the usage of the vehicle. The annual motor insurance premium will therefore depend, in part, upon which of the Classes is needed. It is hugely important to choose the correct Class of Use to ensure you have the cover you need and, more importantly, are compliant with the law. Failure to obtain the correct cover could result in claims not being met and/or policies being voided as well as possible prosecution by the police for failing to comply with the Road Traffic Act. Listed below is an explanation of the various options available but if you are unsure of which Class of Use you need you should always seek the advice of your insurance company or broker as to specific policy wordings.
(Note: The permitted use under the policy is normally shown on your Certificate of Insurance).
Social, Domestic and Pleasure
This is the most common class of use applicable to virtually all policies. The scope of cover includes any social use of the vehicle, i.e. shopping, the school run or visiting relatives.
Social, Domestic and Pleasure including Commuting
In addition to social, domestic and pleasure use, cover is provided for the policyholder for commuting to one fixed place of work (or educational establishment in the case of persons in full time education). If you are not in employment (perhaps you are retired), or if you are someone who chooses alternative methods to complete the daily commute (that do not require the use of your car), then Insurance companies may give you the option to reduce your annual premium by specifically excluding commuting cover from the policy. In such cases the use of the vehicle for commuting will be excluded from the use permitted on your certificate of insurance. Be sure to contact your insurance provider should the situation change and you need the use of your car for commuting, as you will need to obtain a certificate of insurance that includes commuting in order to remain within the law.
If using your private vehicle for business use, there are 3 different classes to choose from; each class providing a difference in the level of cover. These Business Use categories are referred to by different descriptions, depending upon the insurance company. The most common descriptions are shown below:-
Business Class 1/ Class A
This class is the most common and will normally permit the policyholder (and/or spouse) to use the car for travel between multiple fixed places of work in addition to use for social domestic and pleasure use. Common occupations that might require such class of use would include a supply teacher, a care worker who drives to see various patients, or any person who might have to work at more than one location. Any named drivers other than the spouse will not normally be permitted to use the vehicle for business related mileage, and any commercial use relating to delivering goods or selling products will not be covered under this class of use. The cover provided is essentially for travel between multiple places of work but excluding use of the vehicle as a tool of trade.
Business Class 2/ Class B1
This class normally extends the cover under Class 1 (above) to any named drivers on the policy. Most insurance companies will require both the policyholder and the named driver to use the car for the same business (i.e. the insured and the named driver cannot use the vehicle in connection with different businesses) The same restrictions found in Class 1 still apply in relation to the usage; so again, any commercial use relating to delivering goods or selling products will not be covered under this class of use.
Business Class 3/Class B2
The final business class is the broadest in its cover. In addition to the level of cover provided under a Class 2 policy, the policyholder will be allowed to use the car for ‘commercial travelling’ purposes as well. This class ensures that any employment related car travel, to an unlimited number of destinations that are not fixed, will be covered. This would therefore be the relevant class of use for those who use their vehicle as a tool of trade, such as sales representatives visiting customers. Persons requiring this business class of use are likely to be high-mileage drivers and this is, as you would expect, normally the most expensive annual premium cost.
Note that this Class 3 use, although the widest of the Classes of Use, will still exclude certain uses regarded as non-standard; such as use as a taxi (public and private hire use) or use in connection with the motor trade. For these uses it will be necessary to purchase a commercial policy.