Several factors can affect your car insurance premium. The insurer may consider the type of vehicle, your driving record, how much you drive annually, where you drive, and your age. But what if you use your vehicle for work? Does that affect your car insurance premium? Here’s what affects the price of car insurance.
It all depends on the risk
Insurers rely primarily on risk factors to determine your car insurance premium. You must provide all relevant information to help them determine the best coverage for your situation.
This includes your use of the vehicle for work. So the answer is yes—using your vehicle for work will affect your car insurance premium.
But the premium can vary significantly depending on your occupation. For example, frequent travel for work could increase your insurance premium because of the higher risk of accidents.
On the other hand, someone who works in an office and doesn’t drive a lot for business purposes might have a lower car insurance premium.
Examples of targeted travel
Insurers tailor their pricing and products for jobs that require more frequent travel than average. Higher annual mileage means a higher car insurance premium.
Let’s take the example of a travelling sales rep who uses their vehicle mainly for work. That person would be classified as a business driver and therefore pay a higher premium. Small amounts of work-related use must also be reported. This still qualifies as business use, but the premium will be lower since the number of kilometres reported is lower.
Your premium may also go up if you use your vehicle to deliver goods or transport people. The insurer may consider such use to be a commercial activity because of the risks involved.
It’s important to let your insurer know if you use your vehicle to make deliveries or transport people for pay through a mobile app, for example.
In short, it’s important to understand that using your vehicle for work can affect your car insurance premium. Insurers look at how the vehicle will be used, not your occupation. That’s why it’s important to notify your insurer of any changes in your employment status so that your car insurance premium can be adjusted accordingly.