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In Canada, A commercial vehicle is a motor vehicle used primarily to transport materials, goods, tools or equipment that relates to your occupation. It also includes trailers that are intended for use with said commercial vehicles.
Commercial auto insurance, also called commercial car insurance, commercial vehicle insurance or business auto insurance, is insurance protection for commercial motor vehicles. Vehicles used for business purposes are not covered under a personal auto insurance policy and must be covered under commercial insurance. You will need to apply for IRCA (Individually rated commercial auto insurance).
IRCA eligible vehicles are non-fleet automobiles used for commercial purposes rather than personal use. They are rated based on the driver’s driving record, claims history, coverage, limits and deductible.
Do I need commercial auto insurance?
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:
Other times, the distinction between personal and commercial use is less obvious:
If you’re ever not sure if your vehicle use counts as commercial use, ask your insurance rep.
A commercial auto insurance policy is similar to a personal insurance policy. In Ontario, they both require that coverage include accident benefits coverage, third-party liability coverage, direct compensation property damage and uninsured automobile coverage. Most importantly, commercial use of a vehicle is specifically excluded from a personal policy.
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.
Since commercial vehicle use comes with additional risk, it requires a policy that offers more robust coverage than a personal car insurance policy.
Mandatory coverages and the availability of optional coverages will vary by province, but the most common commercial auto insurance coverages provided in your policy include:
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.
In most cases, yes, as long as you have permission from the owner, 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 is larger than a pick-up truck, it would probably be easier, and cheaper, to use a normal car for personal errands.
It is hard to say exactly how much it will cost you to insure your commercial vehicle, as there are a 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.
It is impossible to say which company has the best commercial insurance, without first understanding the coverage your business requires. To get a better idea of how much it might cost to insure your commercial vehicle, complete our free online quoter to see multiple rates in one place. With this information, you can make an informed decision about which company is best for your business. We understand that your business is your livelihood, and you can trust RATESDOTCA to help you find a great deal.
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.
In Ontario, Quebec and Alberta, Uber has an agreement with Economical 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.
It’s possible that your personal car insurance policy will increase if you are a rideshare driver. The additional usage will lead to more wear and tear on your car, and more time on the road increases your chances of getting into a collision.
When you run a business, every dollar counts. The cost of your commercial auto policy is determined by multiple factors. Some of them are more or less out of your control, like the location of your business, but there are steps that you can take to keep your costs down:
If you work for a ride share company like Uber and Lyft, they have insurance policies to cover ride share drivers, but the same may not apply for drivers who deliver fast food or take out for apps like UberEats and DoorDash. Learn more about commercial car insurance for food delivery drivers.