Get the Best Commercial Auto Insurance for Your Business in 2024
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Your business depends on its vehicles. Whether you have a fleet of delivery trucks or a single company car, the loss of your car or truck can have a major impact on your bottom line. That's where commercial auto insurance steps in.
Did you know that commercial auto insurance is different from personal auto insurance?
This guide will help you understand the basics of commercial auto insurance, the types of coverage available, how much it costs and how to find the right policy for your business.
What is commercial auto insurance?
Commercial auto insurance is a type of business insurance designed to cover people and vehicles used in a business context. This can mean anything from driving a taxi or an Uber to providing delivery services or even giving driving lessons.
Commercial car insurance typically comprises a more comprehensive set of protections from damages and liabilities than personal car insurance. The policy limits may be higher and cover the commercial use of the vehicle. The range of situations in which the insurance policy comes into effect is also typically larger. If a healthy functioning business means that you are on the go all the time, insurance for your business vehicles may be a necessity. Commercial car insurance makes sure you are protected while using your vehicle in the course of your business.
Why do you need commercial auto insurance?
Certain types of vehicles and forms of usage are specifically excluded from a personal car insurance policy. For example, if you get into an accident while transporting paying customers in your personal car, your personal auto insurance policy will deny your claim. That could mean a massive bill, an unusable ride and legal problems.
Both forms of insurance are designed differently because they involve different forms of liability. There are three primary factors that weigh in on why you might need it:
- Vehicle Use: Generally speaking, vehicles used for businesses fulfill specific purposes such as transporting goods, tools or people and are exposed to a unique set of risks as a result. This is compounded by the risks posed by the environment in which the business operates – driving in downtown Toronto is different from driving in a remote area in Alberta.
- Vehicle Type: Certain vehicles such as heavy trucks or those involved in construction are very expensive to repair in the case of any damages or an accident. Commercial auto insurance makes sure your business does not have to bear the brunt of these costs when they occur.
- Vehicle Owner: If a vehicle belongs to your business or employer and moreover, sees use from a number of different drivers, commercial insurance makes sure they are all protected in the case of an accident.
How much is commercial car insurance?
Commercial car insurance prices will vary pending on the vehicle type, the number of drivers as well the conditions in which the vehicle is used. To get an idea of pricing, we searched for a quote with a leading auto insurance broker.
A 2015 Honda Accord used for delivering parcels came to $186.33 dollars per month.
Like any policy though, there are numerous add-ons customers would have been able to purchase for the specific needs of their business. As a result, there is no uniform cost to commercial auto insurance because there is no uniform type of coverage. Everyone’s needs are different. Especially business customers.
Get a personalized quote for your business's vehicles now.
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What does commercial car insurance cover?
Commercial auto insurance policies in Canada offer a similar set of protections as a personal car insurance policy, they are just geared towards a commercial context and the specific characteristics and needs of the business. Of course, a range of additional add-ons are available, but the four basic forms of protection are as follows:
| Coverage type | About |
|---|---|
| Third-party liability | Provides coverage in the event you are at fault for damage to another party’s property, or responsible for their injury or death. |
| Direct compensation-property damage (DCPD) | DCPD provides protection for your vehicle or the loss of use of your vehicle if you find yourself in an accident and are not-at-fault or partially at fault. This form of coverage ensures you deal directly with your insurance company instead of initiating legal proceedings against another driver for damages. Note that DCPD insurance is not available or required in all provinces. |
| Accident benefits | In the event of personal injury during a crash or accident, accident benefits ensure your medical bills and costs associated with rehabilitation are paid whether you are at fault or not. This limit is usually adjustable pending on how much you want to pay per month. |
| Uninsured auto | If you find yourself in an accident where the other driver commits a hit-and-run or is uninsured, this form of coverage makes sure any damages to your vehicle are still paid. |
What commercial car insurance add-ons are available?
Most commercial car insurance insurers offer a series of add-ons to provide supplementary protections should you or your business need them. Here are the add-ons that may be available to you:
| Auto insurance add-ons | About |
|---|---|
| Collision/upset coverage | This form of coverage will help to pay for repairs or a replacement vehicle in the event it is damaged, or rendered undrivable due to an accident even if it is your fault. Without this form of insurance, you are liable to pay for damages to your vehicle following a collision. |
| Comprehensive coverage | This form of coverage protects you from damages that occur as a result of a natural disaster, severe weather, theft or vandalism. In spite of its name, it does not mean you are covered for every eventuality. |
| All-perils-coverage | This form of coverage combines both comprehensive and collision coverages, while also ensuring you are protected if a member of your household or an employee of your business takes your vehicle. |
| Specified-perils-coverage/Named-perils-coverage | This form of coverage protects your vehicle from a particular set of risks specified in your policy like theft or weather-related damage such as snowstorms or hail. |
| Emergency service expenses | This coverage takes care of service fees and towing costs in the event of an emergency. |
| Passengers insurance | A particular form of insurance that allows you to carry passengers for money and protects you from the associated set of risks therein. If you drive for a rideshare company or transportation service, you may need this coverage. |
What commercial car insurance discounts are available?
Fortunately, there are ways to save on your commercial auto insurance policy. Here are some tips to help you lower your premiums and qualify for a discount:
- Bundle your policies: Many insurers offer discounts for holding multiple policies with them. For example, try combining your commercial auto insurance with your general liability insurance.
- Consider a fleet policy: Save with a group rate when you insure five or more vehicles under a fleet policy.
- Maintain a good driving record: A clean driving record and years of going claims-free may qualify you for lower rates and discounts.
- Raise your deductible: While a higher deductible means you'll pay more out of pocket in the event of a claim, it also means lower premiums.
- Finally, get quotes from multiple companies: Shopping around is a great way to save.
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What is a commercial fleet policy?
A commercial fleet policy is geared towards businesses that use at least five vehicles for commercial purposes. This form of policy is also often referred to as fleet auto insurance, motor fleet insurance and business fleet insurance. It will usually cover these vehicles for a wider range of protections – sometimes, at a lower price per vehicle. It also streamlines the amount of paperwork for both customers and insurers.
What is the cheapest kind of commercial car insurance?
The cheapest kind of commercial car insurance is usually the most limited kind of coverage with the lowest policy limits. For this reason, it isn’t recommended to go with the least expensive coverage without careful consideration. Underinsuring your vehicles can leave both you and your business exposed to more risk.
Price is determined by the specific set of risks you face operating your business, as well as the kind of vehicles you are using.
To purchase inexpensive, comprehensive coverage it pays to compare.
Protect your business vehicles for less
