Commercial auto insurance is a critical component for businesses relying on vehicles as part of their operations. This will provide answers to common FAQs regarding commercial auto insurance, coverage options, and policy requirements. Whether you're a business owner or an employee using company vehicles, this guide will provide the clarity you need to make informed decisions and safeguard your assets.
What is Commercial Auto Insurance?
Commercial auto insurance is a type of insurance coverage designed to protect businesses and their vehicles. It provides financial protection in the event of accidents, damage, or other incidents involving vehicles used for business purposes. This insurance is essential for businesses that rely on vehicles as part of their operations, such as delivery services, contractors, or any company that owns and uses vehicles for business-related tasks.
What Does Business Car Insurance Cover?
Similar to personal auto insurance, commercial car insurance offers basic liability, comprehensive, and collision coverage with insurance endorsements to round out your protection.
Commercial Auto Insurance Liability Coverage
Liability coverage for commercial automobiles covers damages to other vehicles, property, or persons. Liability coverage does not cover damage to the vehicle you own. Liability coverage offers the least protection but meets the legal minimum standards for auto coverage in Alberta. It is also the cheapest commercial car insurance option.
*Note, if you're in a not-at-fault collision you will still go through your own insurance company for a claim.
Commercial Auto Insurance Comprehensive Coverage
Comprehensive coverage for commercial vehicles covers most damage to your own vehicle with the exception of a collision to another vehicle or property. It includes coverage for: theft, fire, vandalism, natural disasters, riots, collisions with animals, etc. Comprehensive coverage is an additional option that can be added for additional premium.
Commercial Auto Insurance Collision Coverage
Collision coverage for commercial vehicles covers the cost to repair the vehicle in the event of an at-fault collision or collision with property. Depending on the carrier, if you're the victim of a hit and run, it may be your collision coverage that repairs your vehicle. For specifics about your coverage, talk to your agent or broker. Collision coverage adds yet another level of coverage options and comes with a larger price tag.
When Do I Need Commercial Car Insurance?
If you use your vehicle for any type of business purpose, you should be looking at a commercial auto insurance policy. If you or your employees use a vehicle as part of your business operations, standard personal auto insurance may not provide you coverage. A standard commute to work would not require a commercial auto insurance policy, but if you're using your vehicle for any other business purpose it would be a good idea to check in with your agent or insurance broker.
Do I Need Commercial Auto Insurance to Drive for a Delivery Service?
Depending on the service you plan on working for, you may require a commercial auto insurance policy. Personal auto insurance policies sometimes have add-ons to accommodate you using your car for services such as Uber, Uber Eats, and Turo. These policies are only available through certain insurance companies and must be added to your policy by your broker.
Other services, such as Skip the Dishes, Door Dash, Lyft, and the like may require a separate commercial insurance policies to ensure you remain protected. These policies tend to be considered in a higher risk category and may result in more expensive premiums.
How Much Liability Coverage Do I Need for Commercial Auto Insurance?
Your auto insurance policy should be at a minimum of $2 million in liability coverage. Alberta has seen an increased number of claims costing over $1 million to settle, especially when a commercial vehicle is involved. Driving a commercial vehicle with less than $2 million coverage could be a liability in itself.
Depending on your work specifications, you may be required to carry up to $5 million in liability coverage. If you do require $5 million in liability coverage, it typically requires approval, verification, and binding authority from the insuring company. Quotes of this nature usually require a minimum of 5 business days.
Is commercial car insurance more than personal insurance?
Just like personal auto insurance, the price can vary substantially depending on things like driver experience, record, vehicles used and commute. Generally a commercial auto insurance policy would be more expensive than a personal policy, but there are many factors involved that may push a insurance premium one way or the other.
How much is commercial car insurance?
Based on the commercial auto insurance policies that we've written in 2023 we saw an average cost of $3,500. We saw a range of around $2,500 - $6,500 per year for single vehicle commercial auto insurance, but your price will vary based on many factors.
It is important to note that policies can vary in price considerably based on risk profile. For the most accurate cost on insurance, talk to your insurance broker about your options.
Does DCPD affect commercial auto insurance?
DCPD (Direct Compensation for Property Damage) is in place for all vehicles in Alberta, this extends to both personal and commercial vehicles. This means that if your vehicle is damaged, stolen, or for any other reason you might need to make a claim, you will contact your insuring company to make a claim, regardless of who's at fault.
Conclusion
Commercial auto insurance can be complicated. Trying to navigate different vehicle coverages and options can be challenging. If you're looking for expert advice on your commercial auto insurance, get in touch with an Armour broker today. We're here to help.
