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Commercial Car Insurance

Your guide to commercial vehicle insurance. Who needs it and how much does it cost?

What is commercial car insurance?

Commercial car insurance, also called commercial vehicle insurance or business auto insurance, is insurance protection for commercial motor vehicles. In Canada, any vehicle used to transport clients, materials, goods, tools or equipment, generally requires commercial coverage.

What are the different types of commercial vehicle insurance?

A commercial car insurance policy is similar to a personal-use one. Mandatory components of both, include accident benefits coverage, third-party liability coverage, direct compensation property damage and uninsured automobile coverage.

With commercial insurance, additional coverages are available to cover specialist equipment (e.g. an aerial ladder on a fire truck), or industry-specific usage. Some popular commercial add-ons include coverage for trailers attached to your vehicle, and loading/unloading liability for delivery vehicles.

Do I need to insure my car for business use?

The rule of thumb is that if any aspect of your job requires you to drive on a regular basis, you need commercial auto insurance. This does not include your daily commute, which is covered by your personal policy.

Sometimes the distinction between a personal vehicle and commercial vehicle is clear:

1. If you drive a vehicle with a gross weight of at least 10,000 pounds or a load capacity of at least 2,000 pounds, it needs commercial insurance. The same is true if your vehicle has specialized equipment such as hydraulic lifts or loading ramps.

2. If you have a normal car, but driving is a core part of your employment (e.g. driving instructor, taxi driver, or pizza delivery person), you require commercial car insurance. Without your vehicle, the commercial enterprise could not exist.

Other times, the distinction between personal and commercial use is less obvious:

1. Let’s suppose that you are a handyman driving between job sites with your tools in the trunk, or a self-employed real-estate agent, driving from house to house to see clients. For both of these examples, commercial car insurance is required.

2. If you occasionally use your vehicle for business reasons, but it is not a regular occurrence, you probably don’t require commercial insurance but check with your insurer. They may modify your existing, personal policy to cover occasional business use, but it won’t cost as much as a dedicated commercial policy.

Frequently asked questions about commercial car insurance

What happens if you get into a collision while using your personal vehicle for business?

It will depend on the specific circumstances, but if you get into an accident while driving for business, and this use isn’t specifically covered by your policy, the insurer could deny your claim.

This means you would have to pay out-of-pocket for repairs and other ensuing costs. On top of this, your policy could be cancelled for failing to notify the insurer of your vehicle’s intended use. When you get around to finding a new insurance policy, you’ll face higher premiums as a result of your prior indiscretion.

I’m a rideshare driver. Do I need a commercial car insurance policy?

If you drive for Uber, Lyft or any other rideshare company, check with your insurance company to see if you need additional coverage. Some rideshare companies have partnered with Canadian insurers to provide blanket coverage for all drivers on their platform.

For example, in Ontario, Quebec and Alberta, Uber has an agreement with Intact Insurance. From the moment you log into the app, to the moment the passenger leaves your vehicle, this commercial policy takes precedence over your personal coverage. The commercial premiums are paid for by Uber, and not charged to individual drivers.

Can I use a commercial vehicle for personal use?

In most cases, yes, you can use a commercial vehicle for personal use and the commercial insurance will cover you in the event of an accident. However, if your commercial vehicle larger than a pick-up truck, it would probably be easier, and cheaper, to use a normal car for personal errands.

How much does commercial auto insurance cost?

It is hard to say exactly how much it will cost you to insure your commercial vehicle, as there are a great number of variables at play, but you can expect to pay more than you do for your personal policy.

From an insurance perspective, a commercial vehicle is riskier than a personal one. Commercial vehicles can be large and highly specialized, meaning they will cause a lot of damage if involved in a collision, and the parts will cost a lot to fix or replace. Even if your commercial vehicle is a normal-sized car, the insurance policy will cost more, owing to the assumption that commercial cars spend more time on the road, often during rush hour traffic.

Who has the best commercial auto insurance?

It is impossible to say which company has the best commercial insurance, without first understanding the coverage your business requires. However, if you spend a few minutes completing our free online quoter, we’ll show you multiple rates in one place. With this information, you can make an informed decision about which company is best for your business. Just ensure you select the “commercial” option when entering your information.

Don’t waste hours calling different insurance companies. RATESDOTCA will show you the lowest available rate in minutes. We understand that your business is your livelihood, and you can trust us to find a great deal.

How can I save money on commercial auto insurance?

The cost of your commercial auto policy is determined by multiple factors. Some of them are out of your control, like the location of your business, but here are some steps that you can take to keep the cost down:

  • Reimburse employees for driving their own vehicles, rather than owning lots of company cars.
  • If your employees must drive company-owned vehicles, screen your new hires to ensure they have at least three years safe driving behind them. They will have to be named on your company policy, so better drivers will ensure lower insurance rates.
  • For company cars, opt for sensible, mid-size sedans rather than flashy sports cars. Generally speaking, the more valuable the car, the higher the insurance premium.
  • Reassure your insurer that your vehicles are safe from theft by parking them in a secure location, installing alarms and GPS tracking.
  • Whenever it comes to insurance, you should always try to take advantage of multi-line discounts, or insurance bundles. If you own the building in which your business is located, bundling commercial auto and commercial property insurance together will probably lower both premiums.
  • If you have several company vehicles, enquire about commercial fleet insurance. It is cheaper than buying individual commercial policies for each vehicle.
  • Compare quotes from Canada’s top insurance providers on RATESDOTCA. We can find you the best coverage for the lowest price.
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