Car insurance explained

Car insurance explained

SDP, commuting or business use?

When you buy your car insurance, one of the questions you’ll have to answer is how you use your car.  While muttering ‘driving, obviously’, you’ll need to pick from one of three main options (known as classes):

  • Social, domestic and pleasure (SDP)
  • SDP including commuting
  • Business use

This quick guide will take you through exactly what each of these means, how they differ and why it’s important you pick the right one. (Spoiler alert: if you don’t, your insurance could be invalid).

What are the different car insurance groups?

Insurers use lots of things to work out how much to charge you. Features like your car’s make and model, your postcode, and your occupation all count. Another of these factors is how you use car, and so which car insurance class you fall into.

This is because why you use your car affects how much you drive, when and where you’re going, and where your car spends most of its time. All of these things affect your risk, and therefore how much your car insurance will cost.

Let’s dive deeper into each group to help you figure out which one best reflects how you drive your car.

What does social, domestic and pleasure (SDP) mean

Social, domestic and pleasure is any driving that isn’t connected to your work in any way. For example, if you go shopping, do the school run, drive to meet a friend, or go to the gym.

If you select SDP, you can’t drive to the office or leave your car in the workplace car park while you’re working. You also can’t use your car to drive to the train station and leave your car parked there while you continue your journey to the office.

In theory, this means you’ll be driving fewer miles and your car will spend more time parked up, ideally on your driveway or inside a locked garage.  So, SDP usually makes your insurance less expensive than the other insurance groups.

What does SDP including commuting mean

Commuting is the next insurance class. It includes all the social, domestic and pleasure uses of your car, but also includes journeys that get you to and from work.

For example, you might work at a supermarket, so drive to work and park in the car park. Or you might drive to the station, leave your car there and get on the train to your office in the next town.  Even if you mainly work from home but drive to the office once a week then you’d need to pick this option.

It’s important to note that commuting only refers to ONE place of work. So if you travel to a number of sites or take meetings where your clients are, you’ll probably need to select business use (more about that below).

Commuting usually means more driving (often at busier times) and that you’ll be regularly leaving your car in a public place. This increases your risk, so it’s also likely to increase the price of your policy.

Having said that, it’s not the most expensive car insurance class.

What does business use mean for car insurance?

Business use is the one to pick if you need to travel to different places for your work or if you want to insure your colleague on your car too.

In most cases, business car insurance is more expensive than SDP or commuting as higher road use means greater risk of a claim. But you should always check with your insurer about prices and coverage.

If business insurance looks like the right fit, then you’ll have another decision to make. Let’s introduce the three subclasses of business insurance.

Class 1 business use

Class 1 is the least involved business group of insurance. It’s similar to the commuting class we described above, but covers trips to more than one place of work.

For example, an Ofsted inspector with responsibility for three schools in the local area may select class 1 business use.

Class 2 business insurance

The second car insurance group for business is same as the first, but with extra coverage for a named driver – usually your spouse or colleague. Most insurance companies specify that the second driver works for the same business as the main driver. As always, double check your exact policy or get in touch with your insurer.

This helps cover the business against interruptions if one driver (or one car) is out-of-action. The other driver or vehicle is already set up to get both colleagues to the workplace.

Class 3 business insurance

The third class of business car insurance covers unlimited mileage and unlimited destinations. Driving itself still isn’t your main job function (so you’re not a taxi driver, for example), but you still need to regularly travel to complete your work. If you make a number of stops throughout the day, this could be for you.

Class 3 would fit your car insurance if you were a healthcare worker who completes home visits, for example. Or a salesperson who’s dropping off samples.

This is typically more expensive than SDP, SDP and commuting, and other classes of business insurance.

Commercial car insurance

So far, we’ve been talking about personal car insurance which you use to get to and from work. If driving your car is a part of your job, like you’re a taxi driver or a chauffeur, then you’ll need to explore commercial car insurance options. You might also get a company commercial insurance policy if you drive a company car.

Your employer, if you have one, will usually pay for this. But if you’re self-employed, for example as an Uber driver, then you need to find it yourself (and not just drive on standard car insurance).

Commercial car insurance premiums tend to cost more than SDP, commuting and business use. This is because time on the road is greater, so there’s a higher chance of an insurance claim. You may also need specialist cover, for example you’ll need public liability insurance if you’re picking up passengers.

Why you should choose the right car insurance class

No one likes spending money on their insurance, so it’s easy to be tempted by the cheapest option on offer. This will usually be SDP, but before you select it make sure that this is an actual reflection of your driving.

If it isn’t, then your insurer could reject your claim and you’ll have to pay out-of-pocket for damages caused by accidents. Worse still, if your insurer can prove you deliberately selected the wrong class you could face fraud charges.

Just don’t risk it.

How does your usage affect the car insurance premium?

Typically speaking, the cost rises as you move through the car insurance groups. Usually, SDP is the cheapest, followed by commuting, then business and commercial.

But your premium will always be based on your circumstances, and there are plenty of other factors which affect it. It’s impossible to change the class of your car insurance if you want to be properly insured, but driving a car with a smaller engine or parking it off road (we love a garage, if you have one) can bring down cost. We have a whole blog that covers how you can get cheaper insurance.

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