How your vehicle's main purpose impacts your premium
Age, experience, type of car and claims history are all things that come into play when an insurer determines your policy. However, did you know the reason you’re driving your car also heavily influences the cost of your premium?
There are a couple of uses that could impact your premium, causing it to rise, or even requiring you to take out a new type of policy.
Commuting to work
It might surprise you to find out that your daily commute can contribute to a rising insurance rate, especially if you’ve recently started a new job or moved further away from your place of work. The theory is that the length of your commute equals more time spent on the road, which in turn means an increased chance of getting into an accident. Like all insurance policies, the riskier a insurer considers you, the more money you will have to shell out on that policy.
There are a few ways that you can try and get around excess fees, or at least lessen their impact.
You can cut the distance you drive to work by taking public transport all or part of the way. Alternatively, why not suggest setting up a carpooling system in your office? You can each take turns to drive to work in pairs or small groups. Added perks of carpooling include an estimated shorter journey time due to carpooling lanes in some traffic-dense areas, and you can feel good about saving the environment from excess car fumes.
Finally, there is always the option of giving up using your vehicle for work all together. If you commit to this decision, you can register your car as a “pleasure vehicle”, allowing you to benefit from some of the lowest car insurance rates going. What this means, however, is that you can only use your car for those fun, recreational activities you do in your spare time.
Ride-sharing services
With the popularity of ride-sharing on the rise, thanks to apps like Uber and newcomer Lyft taking over the market, more people are deciding to make some extra cash as a driver. If you do decide that you want to pursue a career with a ride-sharing service, your personal car insurance probably won’t cover you because personal policies have a uber of exclusions such as “driving-for-hire” and “commercial driving”.
Luckily there are a couple of different ways you can be insured.
When it comes to Uber, you will be expected to have your own policy in place. The company then provides supplemental insurance coverage for when the app is turned on. This policy is made up of two levels: a low level of liability insurance which becomes active when you switch your app on, and a higher level that kicks in and remains active from when you accept a trip to until it comes to an end.
For drivers living in Ontario and Alberta, you are automatically covered by a ride-sharing approved insurance policy through Intact Financial Corp, by-way of Uber who will pay your premium. A recent report from CBC suggests that this will soon be extended to Québec, with plans to expand to other provinces in the future.
Other ride-sharing services, including Lyft, carry a $1M per incident excess, however your must rely on your personal policy when it comes coverage for your car.
Using your car for business
If your job demands that you drive your car for business, perhaps as a travelling salesman or to various national meetings, then you may need to invest in business car insurance. This differs from a standard policy, which only provides cover for personal use and commuting.
Chances are you will end up paying a higher premium, however if you decide not to opt for business insurance and find yourself in a collision while driving for work, your standard policy won’t be able to help you.
When deciding on your policy your insurer will want to know more about the type of business you work for, how long you spend behind the wheel, how many miles you clock up and whether you want to any additional drivers.
Delivery driving
It might surprise to find out that in 2016 delivery drivers recorded the 5th most at work accidents in the US, making it a pretty dangerous occupation to have. From pizzas to parcels, drivers rushing to get deliveries to customers in record time is probably part of the reason behind this. What it does mean is that insurance rates can be a little higher, and your insurance package is usually tailored depending on what type of delivery driving you are doing.
An insurer will offer you basic insurance for your car, plus commercial driving or business add ons, depending on the capacity in which the car is used. For the most part there are two avenues; company-owned car coverages and employee-owned car coverages. If you do use a company owned car, it is down to the business owner to insure the car, and be sure to list all employees are using the vehicle.