Car insurance companies do offer a different premium rate if you drive your car for pleasure vs. commuting daily to work. One of the factors that go into their calculation of your premium is the amount of miles that the car is driven daily. Commuting 30 miles each way to work on a daily basis will put a lot of wear and tear on your car, and do it much faster than the occasional grocery shopping trip, beach day, or scenic route.
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More time spent on the road also translates into more possibility of accidents and other damage occurring to your vehicle. Be truthful when your auto insurance company asks how often and for what purpose you drive your car. If you tell them you don’t drive it to work in order to pay less for insurance, don’t drive it to work. If you get into an accident commuting to work and you’re paying the “pleasure rate,” your insurance company may decide to refuse your claim.
Pleasure vehicle insurance has its place, and can offer significant discounts.
What do the car insurance companies consider a pleasure vehicle?
Although most of us would look at a Ferrari and think of the pleasure of driving it to the beach, insurance companies judge the vehicle on how quickly the odometer turns over, and not its head-turning capabilities. The type of car absolutely factors into the price of your insurance premium, because insurance providers consider how difficult and expensive it will be to replace any damaged part.
However, a pleasure vehicle is determined by the amount of miles you drive it on an annual basis. Driving less that the limit for pleasure mileage means you most likely qualify for discounts!
It does vary by insurance company, but several use the 7500-mile benchmark: if you drive the car less than that, it’s considered “pleasure”; if you drive the car more that, you’re billed a higher premium. A “pleasure” vehicle might be used sporadically, or you may drive it daily. The difference is that you don’t drive it very far even on the daily basis–maybe to the commuter parking lot or the train station to catch mass transit to work.
Do I need commercial car insurance for my work vehicle?
If you’re actually using your vehicle for work, and not just driving it to work, you will need to get commercial or business car insurance coverage. This goes for people who drive their car for jobs such as delivering food, taking customers to and from the airport, and making sales calls. Your personal auto insurance policy won’t cover any accidents, damage, or theft that occurs on a work vehicle.
It’s best to work with your insurance agent to determine whether you need a commercial insurance policy for your work vehicle and, if so, how much coverage is necessary. Whether you need personal or commercial insurance depends on who owns and drives the vehicle, how often you use the vehicle, and also the type, size and weight of the vehicle. If your business requires a higher liability limit than is typically available through personal auto insurance policies, then you’ll also need commercial insurance coverage.
Know this: If your work vehicle is owned by the business you work for, then you are not responsible for the insurance on that vehicle–your employer is. They can’t legally have you purchase the insurance on a work-owned vehicle.
Do auto insurance companies offer discounts on commercial auto insurance?
Yes, similarly to personal auto insurance, providers offer some discounts on commercial auto insurance policies. These discounts vary from business to business, but some examples are:
- Multiple line- if you also have a business owner or liability policy with the same company
- Experienced driver discounts
- Length of business
- Multiple policy- if you combine business and personal
- Good student- if you have younger drivers with high GPAs
Keeping your business vehicle fleet parked in a safe location could help you save money, as well as installing safety features, such as alarms, on the vehicles.
Many auto insurance companies now offer commercial auto insurance, so the market is pretty competitive. Ask about discounts before you sign with an insurance provider.
Pleasure car insurance could be right for you. Not sure where to start looking? Type your zip code into the free box and you’ll be able to find the companies offering auto insurance rates for your location right now!