Looking for Company Car Insurance?
Are you a company searching for a great rate on company car insurance or an individual tasked with finding your own company car insurance?
This quick guide looks at different types of company car insurance, what you need, who pays and who’s responsible for making sure a company vehicle is covered.
Do you need company car insurance?
In the majority of cases, company cars are insured by the company who owns or leases them, usually under a motor fleet, multi-driver policy.
In the rare instance that you have a company car and need to arrange your own insurance, many insurers may refuse cover because you do not own the vehicle. However, it’s not impossible to get private insurance for a company car and some insurers will cover leased vehicles, providing the lease is for a minimum of 12 months.
When company car insurance becomes a grey area
Privately owned cars used for business use, and which receive a fixed mileage allowance, are known as grey fleet vehicles. It is the owner’s responsibility to insure the vehicle, but the company has a responsibility of care to make sure that the correct insurance is in place.
Under the Health and Safety at Work Act 1974, managers of grey fleet vehicles have a responsibility to check that all vehicles are properly serviced, maintained and insured for business use. They should keep accurate records of all grey fleet vehicles for at least 12 months.
Car insurance for business use
If you own your own car, but use your car for business use, then you don’t need company car insurance, but you will need to make sure your insurance covers you for business use. There are usually 3 different types of business use cover depending on your usage of the car.
Covers you to drive in relation to your work.
Covers you to drive in relation to your work and you can add additional drivers, for example colleagues.
Designed for people who drive frequently and long distances for their job for example sales people.
Does business use insurance apply to you?
If you don’t receive a fixed mileage allowance for using your car for work it’s still important to inform your insurer that your car is being used for business use. Failure to do this could result in your policy being invalidated and even prosecution for driving without the correct insurance. Many people fail to do this because they don’t realise what constitutes business use.
Business use insurance applies to you if you use your car to:
People who use their car for business purposes tend to spend more time behind the wheel, often at busy periods, which equates to greater risk. This is way insurers differentiate between standard car insurance policy and a business use policy. The difference in price is not usually high and depends on your circumstances and your insurer.
Saving money on company car insurance
Choosing a company car in one of the lower insurance groups and with low emissions are both good ways to reduce company car insurance and lower the cost/tax to you and your employer.
Company Car Insurance – Useful FAQs
This depends on your company. If the company has an additional driver policy, they may well extend cover to partners, providing they fit within certain criteria. Always clarify with your company that colleagues or partners are covered before you let them drive.
No, probably not.
DOC (driving other cars) is a feature of some fully comprehensive insurance policies, but not all, plus DOC does not apply to leased vehicles.
Legally the car belongs to or is leased by the company and so they should pay any excess. Some companies incentivise safe driving by specifying that drivers are responsible for their own excess. If in doubt check your contract and speak with your employers.
This depends on the insurer. Some companies will let you transfer a no claims discount from a company policy if you were only driving one vehicle and it was for your use only. Some company car policies do not apply no claims discounts.