What is Commercial Car Insurance? 2024 guide
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Commercial car insurance in Canada is a must if you use your vehicle for business beyond just getting around. It protects you from the unique risks and accidents that can happen when you're on the job, covering damages and keeping you financially safe.
It's the shield your business vehicle needs to keep you worry-free and focused on your job. But how does it work? What does it cover? How much is it? Find out all these answers and more in this comprehensive guide.
You can also use our free tool to compare the best car insurance plans in Canada and get personalized quotes based on your unique needs and budget right here.
Commercial Car Insurance Canada: 6 Key Takeaways
- Offers broader coverage tailored to business needs.
- Includes liability, vehicle damage, and protection against uninsured motorists.
- Premiums are influenced by factors like industry type and annual mileage.
- Top options include Aviva Canada, Intact Insurance, and Cowan Insurance Group.
- Premiums are higher compared to personal car insurance.
- You can buy commercial car insurance online.
What is commercial car insurance?
Commercial car insurance, also known as business auto insurance, is specifically designed to protect vehicles used for business purposes in Canada.
Here are its key points:
- Coverage: It offers broader coverage tailored to business needs, including liability for injuries or property damage caused to others, damage to your vehicles, and protection against uninsured or underinsured motorists.
- Vehicles covered: It encompasses various business vehicles, from company cars and vans to delivery trucks and heavy machinery.
- Risk factors: Premiums consider business-specific factors like the type of industry, driving records of employees, and annual mileage.
- Regulations: It adheres to different regulations and legislative requirements compared to personal insurance.
Think of it as a safety net for your business on the road. It mitigates financial risks associated with accidents, protecting your vehicles, employees, and your company's assets.
Commercial car insurance Ontario
Ontario is known for having higher car insurance rates compared to many other provinces due to its densely populated urban areas, higher instances of fraud, and more expensive claims. Therefore, commercial car insurance in Ontario is generally more expensive than in provinces with lower overall insurance costs, such as Quebec or the Maritime provinces. Check out our guide on Car Insurance in Ontario to find the best plan.
Before you choose any policy, compare different plans from leading providers in Canada. This will help you get the best deal. You can get a commercial car insurance quote online right here, using our comparator.
Compare Canada's best car insurance plans
What are the pros and cons of commercial car insurance?
Consulting with a licensed commercial car insurance broker can help you navigate the options and choose the best coverage for your business. But you don’t necessarily need commercial car insurance brokers to make a call. You can simply use our free tool above.
Weigh its pros and cons and select a policy that aligns with your specific needs and risk tolerance.
Pros:
- Financial protection: It shields your business from significant financial losses if your vehicles are involved in accidents, covering medical bills, property damage, legal fees, and more.
- Compliance: Having commercial insurance is mandatory for business vehicles used for specific purposes in most provinces.
- Tailored coverage: You can customize your policy to fit your specific needs and industry, ensuring relevant protection.
- Potential tax benefits: Depending on your province, premiums might be tax-deductible as a business expense.
- Employee protection: Coverage can extend to authorized employees driving company vehicles, ensuring their well-being.
- Specialized features: Depending on your needs, add-ons like roadside assistance, cargo coverage or legal expense coverage are available.
Cons:
- Cost: Premiums can be higher than personal auto insurance due to the increased risks associated with business use.
- Complexity: Understanding different coverage options and navigating various regulations can be challenging for some businesses.
- Claims process: Filing and pursuing claims can be time-consuming and require documentation.
- Exclusions: Not all situations are covered, so carefully review policy exclusions to avoid gaps.
- Potential rate increases: Accidents or claims could lead to higher premiums in the future.
<strong>Is commercial car insurance more expensive? </strong>
Yes, commercial car insurance is generally more expensive than personal car insurance in Canada. This is due to several key factors, such as increased risks and broader coverage.
Commercial car insurance vs. personal car insurance
Choosing the right car insurance depends on how you use your vehicle. Here are the key differences between commercial and personal car insurance that might help you draw a clear picture of commercial car insurance vs regular car insurance:
Purpose
- Commercial: Designed for vehicles used for business purposes, like deliveries, transportation or company cars
- Personal: Covers private vehicles used for non-commercial purposes, like commuting, errands or leisure activities
Coverage
Commercial: Offers broader coverage, including:
- Liability for injuries and property damage to others caused by your vehicles
- Damage to your vehicles from accidents, theft, or vandalism
- Uninsured/underinsured motorist coverage if the other driver has no or insufficient insurance
- Potential coverage for cargo, tools, or equipment in the vehicle
Personal: Focuses on basic coverage:
- Third-party liability (minimum required by law)
- Optional collision and comprehensive coverage for damage to your own vehicle
- Excludes business use and typically doesn't cover cargo or equipment
Vehicles covered
- Commercial: Covers a wider range of vehicles, including:
- Cars, vans and trucks of various sizes
- Delivery vehicles, taxis and ride-sharing cars
- Construction equipment, heavy machinery and specialized vehicles
- Personal: Limited to standard passenger vehicles used for non-commercial purposes
Regulations
- Commercial: Subject to different regulations and legislative requirements depending on the vehicle type and industry
- Personal: Adheres to standard provincial regulations for private car insurance
Cost of commercial car insurance vs personal
- Commercial: Generally higher due to increased risks associated with business use, mileage and driver pool
- Personal: Typically lower due to less risk exposure and limited coverage scope
Claims process
- Commercial: May involve a more complex claims process due to specific coverage, regulations and potential involvement of multiple parties.
- Personal: Generally follows a simpler claims process for standard accidents involving personal vehicles.
Watch out!
Using a personal car for business purposes is illegal and invalidates your insurance.
How much does commercial car insurance cost?
The cost varies greatly depending on several factors, and it's important to understand these factors before getting a quote:
Key factors affecting commercial car insurance cost:
- Type of vehicle: The vehicle's size, value, safety rating and annual mileage significantly impact the premium. Trucks, vans and specialized vehicles generally cost more than standard cars.
- Business type and industry: High-risk industries like construction or transportation typically face higher premiums.
- Driving history: Accident records, claims history and driver demographics (age, experience, violations) influence the cost.
- Coverage level: Choosing higher liability limits, comprehensive coverage or additional endorsements increases the premium.
- Location: Premiums vary based on provincial regulations, city/region risk factors and potential theft rates.
- Number of vehicles and drivers: The more vehicles and drivers insured, the higher the overall cost.
How much is commercial car insurance in Ontario?
Again, the cost will depend on the factors we just discussed above. Here are average estimations for commercial car insurance cost for your reference:
- Light commercial vehicles (cars, vans): $1,000–$1,500 per year.
- Trucks and heavy machinery: $2,000–$5,000+ per year.
These are just rough estimates, and the actual cost could be higher or lower depending on your unique circumstances. If you want to get personalized commercial car insurance quotes, you can use our comparator.
Compare Canada's best car insurance plans
How to get lower car insurance premiums?
Choosing a higher deductible will usually lower your insurance premium, as you're taking on more financial responsibility. However, make sure you can afford the deductible if you need to file a claim. If you're not sure how deductibles work, check out our guide on car insurance deductibles.
How does commercial car insurance differ in various provinces?
Let’s take three provinces — Ontario, Alberta, and Newfoundland — for example. Here's how commercial car insurance differs in these provinces:
Regulations and Requirements
- Minimum Liability: Each province sets its own minimum liability limits for commercial vehicles. Generally, they're similar across Canada, ranging from $200,000 to $500,000 for bodily injury and property damage combined. However, specific regulations for certain industries or vehicle types might differ.
- Mandatory Coverages: Some provinces mandate additional coverages for commercial vehicles. For example, Ontario requires accident benefits coverage, while Newfoundland demands personal injury protection (PIP) coverage.
Average Premiums
Alberta is known for the highest average commercial car insurance premiums in Canada. Here are more details:
| Province | Average Annual Premium | Possible Reasons for Higher Costs |
|---|---|---|
| Commercial car insurance Alberta | $3,151 | High collision rates, larger vehicles, higher industry risks |
| Commercial car insurance Ontario | $2,299 | Urban density, traffic congestion, potential theft rates |
| Commercial car insurance Newfoundland and Labrador | $2,162 | Lower population density, fewer high-risk industries |
What are some of the best commercial car insurance plans?
Here are some of the best private insurance companies that offer commercial car insurance in Canada:
Aviva Canada
Aviva offers a wide range of commercial auto insurance products, including:
- Standard liability and collision coverage
- Optional coverages like comprehensive, accident benefits and replacement cost
- Industry-specific coverages for businesses like contractors, landscapers, and restaurants
- Fleet insurance for businesses with multiple vehicles
The company holds a strong financial rating and generally receives positive customer reviews for its claims service and online tools.
Intact Insurance
Intact offers comprehensive commercial auto insurance coverage, including:
- Standard liability and collision coverage
- Optional coverages like comprehensive, accident benefits and replacement cost
- Specialized endorsements for various industries and vehicle types
- MyDrive program offers discounts for safe driving practices
This provider is one of the largest P&C insurance companies in Canada with a good financial rating. Receives mixed reviews regarding customer service, but claims processing is generally efficient.
Cowan Insurance Group
Cowan primarily focuses on commercial insurance but also offers personal auto insurance. Its commercial auto coverage includes:
- Standard liability and collision coverage
- Optional coverages like comprehensive, accident benefits and replacement cost
- Industry-specific endorsements for various businesses
- Risk management and safety resources for clients
Cowan is a smaller regional player with a good reputation for personalized service and claims handling. Its geographical coverage might be limited compared to larger companies.
These are just a few examples, and many other companies offer commercial car insurance in Canada. Use our comparator to compare quotes and coverage options from multiple companies and find the best fit for your specific needs and budget.
Compare Canada's best car insurance plans
How to get cheap commercial car insurance?
Follow these easy steps to get the cheapest commercial car insurance.
- Shop Around: Get quotes from different insurers to find the best rate. Alternatively, you can simply use our free HelloSafe tool.
- Higher Deductibles: Choose a higher deductible to lower your premiums.
- Discounts: Look for discounts, such as for safety features or multiple vehicles.
