Car Insurance and Car Use Types

I recently had a conversation with one of our Dallas client’s regarding her car insurance renewal. She’s in sales and I wanted to confirm if we had her driving type classified correctly. I asked if she commuted to an office and whether or not she met with clients and prospective clients in their office. It turns out she does, and she’s involved in outside meetings almost as much as she’s in the office.

Based on her answer, I recommended we change her driver type based on how she uses her car. Most car insurance companies broadly classify drivers in one of four different categories or use types including business, farm, pleasure, and work or commuter.

Business Use: A business driver utilizes their vehicle to conduct business. They may or may not commute to an office on a regular basis, but do go to meetings and attend to duties, as their profession requires, outside of the office. Examples of business drivers include:

  • Sales people, real estate and insurance agents, physicians or lawyers, etc. who regularly visit multiple locations on a daily basis
  • Service and repair representatives such as heating & cooling professionals, and plumbers
  • Contractors responsible for multiple job sites

The biggest determining factor as to whether someone is a business use driver is the number of outside meetings each week. Most insurance companies follow a specific number such as 3 meetings or more. The number of annual miles also influences the premium or rate the driver is charged for their car insurance.

Some insurance carriers will add a sub category or driver type for “artisan” drivers. These drivers use a vehicle to carry tools or supplies between home and a job site. The restriction for this type of driver is a limit on the number of sites visited, usually a maximum of 3 per day.

Farm Use: Vehicles in this category usually are trucks used on the farm or ranch and to pick up supplies needed for the farm or ranch operations. They must be principally garaged at the farm or ranch and not used in any other occupation. They may also be used for driving to and from school.

Pleasure Use: Vehicles in this category usually are driven by a stay at home parent, a retired person(s), or someone working predominately out of a home office and rarely seeing clients in outside appointments. In addition, if your daily commute is 3 miles or less, one way, from home you’ll fit into this category too.

Some companies will accept longer commutes if they are less than 15 miles long and the policy holder drives that distance no more than 2 days per week. These vehicles may not have any business use at all.

Commuter Use: Most people are members of the commuter category. They drive from the home to the office or school and then return home each day. They don’t have regular outside meetings as a part of their professional duties.

All companies look at the distance of the commute as one of the rating factors. The shorter the commute, the lower your rate, while the longer the commute, the higher your rate. Commuters also include drivers who drive to a bus or rail (DART) station and then utilize the mass transit system to get to school or work.

Knowing your driver type is one of the keys to being properly insured. In my client’s case, it cost her a little more, however, I’ve also seen it save a number of people money on their car insurance because they fit into a driver tier with a lower risk level. Do you have a question or comment? Share them with me on our Google +, Facebook, or LinkedIn pages. I’d love to hear from you!

Evie Wise
Evie Wise


Evie Wise
Evie Wise

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