Commercial Auto Insurance for Businesses

Premium charges for commercial auto insurance can range significantly from as low as $900.00 per year to over $6,000.00 for one vehicle.  There are many factors that underwriters consider when assigning a rating which influence the price for a commercial auto coverage including:

• Value and age of vehicle
• Radius of operations
• Total kilometers driven per year
• Usage of a vehicle
• Driver of a vehicle
• Coverages and limits selected

To obtain commercial auto insurance it is vital to fully disclose all vehicles being used for commercial purposes. This will ensure you have the right ratings applied and no potential for exposure in the event of an accident.

Your FCA broker should be contacted as soon as the operator of a commercial vehicle is involved in an accident to share the incident. Experiencing an auto accident is always an unsettling time for any driver, but it is important to remember their broker is always there to guide them through the situation.

Once the claim has been reported to an insurance company, an adjuster is assigned to discuss the situation with the insured, investigate the accident and ultimately proceed towards a settlement.

When filing a commercial auto claim, the vehicle owner is required to pay GST for vehicle repairs upfront which differs from personal auto claim procedures. The payment of GST can then be claimed as GST credits at a later date as a commercial automobile is technically deemed as one of the business’s expenses.

A Waiver of Depreciation is added to newly purchased or leased commercial vehicles which prevents your insurance company from deducting depreciation from the value of your automobile after it has been involved in a total loss. As soon as a new vehicle is driven off the lot of a dealership its value begins to decline sharply, therefore this coverage will ensure a policyholder receives an adequate settlement in the event that their vehicle is involved in a total loss. Not carrying this coverage will result in a substantially lower payout. Insurance companies will offer this coverage for vehicles that qualify for a period of 12, 24 or 36 months. Although a vehicle may be purchased new, some commercial vehicles are not eligible for this coverage with certain insurance companies due to the vehicle’s classification. Connect with your FCA broker when purchasing a new vehicle for guidance on what company to insure your vehicle with, in order to secure this vital coverage for the longest duration possible.

When applying for commercial auto coverage, not-at-fault claims that were previously incurred by a driver listed on the policy will not impact the driver’s rates, but at-fault claims continue to impact a driver’s rating for six years. After six years that driver is able to receive Accident Forgiveness coverage, which should be obtained by all commercial drivers who are eligible. The eligibility requirements for obtaining Accident Forgiveness Coverage on a commercial auto policy are more favourable than personal auto policies as drivers on a personal auto policy typically need to wait 7-10 years following an accident in order to able to obtain this coverage. Similar to Personal Auto Insurance, convictions will impact a driver’s rates on a commercial policy for a period of three years following the date of conviction.