Commercial Auto Insurance Guide: Introduction
This page provides you with all the necessary information you need to make an informed choice about commercial truck insurance. Additionally, we will connect you with an experienced insurance broker who will advise you and find your best rate across numerous insurers.
What does a commercial auto insurance policy cover?
A commercial auto insurance policy covers several insurance risks. One of the most important things to know is that you should not use your personal auto insurance policy if you use your vehicle for your business, as this can void your policy if you make a claim. If you drive your vehicle for work, make sure you get a commercial auto insurance policy.
Commercial auto insurance policy components include:
| Insurance | Brief description | Do I need it? | Example |
|---|---|---|---|
|
Collision protection
|
Coverage that pays for damages on a vehicle in case of an accident. It is often a must-have for leased vehicles. | Often | Your car was damaged in an accident while delivering food to your customers. |
|
Bodily injury liability
|
Coverage that pays for the medical injuries and treatment that you caused as a result of an accident. This can be connected to litigation cases (somebody can sue you) and become very expensive. | Yes | As a result of a car accident, a person in the other car was seriously inured and required extensive medical treatment for two years. |
|
3rd party property liability
|
Coverage that pays for any damages you inflict on other people’s property. This can also be connected with legal costs and settlements if the other party decides to sue you. | Yes | As a result of an accident, you drove into somebody’s house and destroyed it causing costs to rebuild the house, costs for the residents to stay somewhere else, etc. |
|
Comprehensive coverage
|
Coverage that pays for other types of risks (also called perils) such as theft, fire, hail, flooding, tornado, etc. | Sometimes | Your delivery truck was stolen while you were picking up your lunch in a nearby restaurant. |
|
Accident benefits
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Coverage that pays for medical treatment and, if necessary, final expenses for the people in your car. This can include both a driver and passengers. | Yes | If, after an accident, both you and your passenger have to go through medical rehab, this coverage will take care of the costs (to the limits determined in the policy). |
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Uninsured motorist / hit-and-run motorist
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Coverages that pay for two similar issues — a counterpart that cannot pay for the consequences of the accident (e.g. no insurance or not enough insurance) or does not want to pay and flees the accident scene (which is a crime). | Yes | You parked your vehicle in front of your customer’s house, but when you returned to the vehicle you realized that the whole left side was damaged by another car that was not careful in leaving its parking spot. |
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Other protection (depends on insurance provider)
|
Other types of coverage can vary from insurer to insurer and can include a rental car during the time your car is not drivable, or first accident forgiveness (meaning your rates will not increase after your first accident). | Sometimes | Depends on your coverage and situation. |
What types of vehicles can a commercial auto insurance policy cover?
A commercial auto insurance policy covers standard passenger vehicles, different types of vans, pickups, trucks and special vehicles. Interested in truck insurance? We put together a Commercial Truck Insurance overview.
There are several types of vehicles that can be covered by a commercial insurance policy: owned by your business, leased, rented, hired or even personal vehicles that are used by your employees for business purposes.
One important hint: If you are planning to insure a leased vehicle, it’s very likely that you will need to purchase extensive, comprehensive insurance protection as per your contract with your leasing provider.
If you are interested in insuring several vehicles, learn about Commercial Fleet Insurance options – it is often cheaper to insure several vehicles as a fleet rather than several independent commercial vehicles.
What factors determine commercial auto insurance rates?
Standard criteria that is widely known from personal car insurance is considered when calculating commercial car insurance rates: province, location, driving history, car make and year, level of deductibles, coverage limits, etc. However, additional considerations that are included in insurance for commercial vehicles are usage and type of use.
- Vehicle usage can vary a lot, from driving twice a week to visit a client located 10km away to driving 10 hours a day and covering hundreds of kilometers daily.
- Type of use relates to the purpose of driving/type of business you are in. Again, if you a contractor making a few visits a week, your chances of getting into an accident are different from a delivery truck or a taxi that drives many hours a day.