What actually counts as "commuting" for car insurance?

bigpat

Useful responses so far, thanks everyone.

My employment contract has "home" as my permanent place of work, in which case the consensus seems to be that driving to Shrewsbury isn't commuting.

I'll dig out my policy over the weekend and see what definition I can find for "business", but I'm certainly not at work, or working, during the journey. I suppose I might have to call them to be certain.

Lorian

I have personal business use to cover me occasionally driving some miles to the railway station to go to head office. I've never seen a quote where that is covered under SDP & commuting. It doesn't add much to my policy as I get to declare quite a low mileage on the business use, most insurers ask for that on top of your social mileage.

DullGreyGuy

bigpat said:

I'll dig out my policy over the weekend and see what definition I can find for "business", but I'm certainly not at work, or working, during the journey. I suppose I might have to call them to be certain.

Business Class 1 - is driving to other offices, meetings, clients sites but the driving is just a function to get you there and not a material part of your job. 1 covers PH only

BC2 - is the same as 1 but includes PH and Named Drivers, most specify you must work for the same company

BC3 - is where driving is a material part of your job, eg travelling salesman, and you may be carrying samples etc

Hire & Reward - is where driving is the job or you are being paid to carry goods/people directly (doesn't include the token payment you get if you take a colleague to the meeting you were both travelling to anyway)

bigpat

Well, the insurance industry is truly baffling!!

I've contacted them and worked through all the details and the upshot is that I do need commuting to be added to my policy. So I've gone ahead and done that. That baffling part, to me, is that it's 58p CHEAPER than it was with only social, domestic and pleasure.

Nothing else has changed. Same vehicle, same address, same driver, same excess, but now I can (if I wanted to) drive at rush hour every day and somehow I'm less of a risk than I was before.

DullGreyGuy

bigpat said:

Nothing else has changed. Same vehicle, same address, same driver, same excess, but now I can (if I wanted to) drive at rush hour every day and somehow I'm less of a risk than I was before.

Or you are more desirable as a customer and so willing to give you a lower price

Insurance isn't priced on risk alone

bigpat

Well yes, I suppose in their eyes I must be, but I don't understand why. They'll refund me 58p and there's no guarantee I'll renew with them next year. Obviously they HOPE I will, but why would adding commuting make me more desirable?

Ozzig

bigpat said:

Well yes, I suppose in their eyes I must be, but I don't understand why. They'll refund me 58p and there's no guarantee I'll renew with them next year. Obviously they HOPE I will, but why would adding commuting make me more desirable?

They probably don't care about why, but if statistically drivers with commuting make fewer claims per mile they want them on the books ?

bigpat

Yes I suppose that could be the reason, but I thought the whole point was that commuting was MORE of a risk. If, statistically, commuters make fewer claims, then it would be less of a risk. But I'm no actuary, that's for sure.

But I might add this to my dating profile. I am now officially more attractive. 

DullGreyGuy

bigpat said:

Well yes, I suppose in their eyes I must be, but I don't understand why. They'll refund me 58p and there's no guarantee I'll renew with them next year. Obviously they HOPE I will, but why would adding commuting make me more desirable?

Insurers spend a lot of time modelling elasticity (price sensitivity) and propensity (rate of renewal) which can drive pricing. 

Could be commuters are lower risk, are more price sensitive or are more likely to renew and so are offered slightly lower prices. 

Insurers also want to ensure they have diversified risks and pricing can increase if they find they are starting to get too heavily slanted towards a single risk feature. With aggregators and AI, just emerging when it was my day, big worries that if a mistake was made on pricing you could get flooded with sales before you knew you had a problem so scripts were created to creep prices if you start seeing statistically relevant concentration in sales. So it may not be the fact your new premium is good, it could be your old premium was high because you were the 100th driver of your model of car to buy that hour. When rerated for the change that loading is removed hence the refund.

At the end of the day, unless you get the opportunity to discuss with their pricing team it's pretty much just speculation which of them it is. 

bigpat

Thanks, that actually makes sense.