Usage
Usage in car insurance simply refers to the main purpose (or primary function) for which you use your car. It is important that the purpose be correctly identified and stipulated in your car insurance policy. If this is not done you may find your insurance claims repudiated. You may think that the purpose you use your car for is of no relevance as it is the same car you are insuring. The reason is that your car’s usage can have a major impact on the severity of the risk involved; therefore it becomes very important.
If you use your car to drive to and from work, but you do not travel during the day on behalf of your company, the usage of your car will be classed as private use. If you visit clients on a regular basis, travel for business during the day, or are self-employed your car usage will the classified as business use.
Business usage is seen by car insurance companies as higher risk and therefore you will normally pay a higher premium. Car insurance companies usually have differently branded products for private or business use, make sure that you take out the right product and compare the different offerings available in the market.