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Do You Need Commercial Auto Insurance?

Do You Need Commercial Auto Insurance?

When it comes to protecting people and your car from potential hazards, Auto Insurance is a must. It is essential to understand the differences between commercial and personal vehicle insurance so you can make an informed decision.

Sometimes, it may seem unclear which auto insurance policy is more suitable for your needs. Continue reading to learn about the similarities and differences so you can determine which form of coverage is appropriate for you.

How Personal and Commercial Auto Insurance Differ

Both commercial and personal car insurance safeguard your vehicle from dangers by offering financial security and the ability to assist you in the event of a disaster. But commercial policies cover vehicles you drive for business purposes while personal car insurance does not.

Almost all personal vehicle insurance coverage prohibits commercial use. That means if you are in an accident while using your car for business purposes, you will not be protected, except for your commute.

If you merely use your car to get to and from work and drive around your city, you should consider purchasing personal coverage. You may require commercial car coverage if you plan to use your vehicle for business reasons like moving equipment, driving to meet customers, making deliveries, and other business-related activities.

Who Needs Personal Auto Insurance?

Accidents while using your car for personal purposes are only covered by personal auto insurance. Personal purposes include travel not linked to your employment activities, such as driving to and from work. Usually, policies cover the car owner and one or two immediate family members.

Auto Insurance is compulsory in Ontario for all vehicles, and you must show your proof of coverage when requested. In Ontario, all drivers must have accident benefit, liability, uninsured automobile, and direct compensation coverage.

Who Needs Commercial Auto Insurance?

You may require commercial auto insurance if you are a lone entrepreneur using your car for business. Liability limitations for commercial coverage are often more significant than personal vehicle insurance. It can include vehicles that are used to:

  • Drive employees and clients
  • Perform paid services
  • Transport passengers for a fee
  • Charge people to transport goods in your vehicle
  • Haul heavy loads for work
  • Tow a business trailer

Commercial auto insurance usually covers employees authorized to use your company car. Even if the car were used for personal reasons, this coverage would assist in covering the expenses of incidents that occur while an employee is driving.

What Commercial Auto Insurance Covers

Commercial auto insurance protects automobiles used for work, whether driven by you or an employee. Accident-related expenditures for injuries, fatalities, or property damage are covered up to the policy limits.

Commercial vehicle insurance is sometimes mistaken for Rideshare Insurance, which is usually necessary if you work as a rideshare or delivery driver. A commercial auto insurance policy often contains the following coverages:

  • Liability Protection – Includes bodily injury and property damage liability to compensate for injuries, fatalities, or property damage caused by a driver while on the job. This coverage may also cover legal expenses.
  • Uninsured Motorist – Covers the costs of injuries and, in some cases, property damage caused by an uninsured or hit-and-run motorist. If an at-fault driver does not have adequate automobile insurance coverage to pay all expenditures, this policy may also include underinsured motorist coverage.
  • Medical Payments – No-fault or personal injury protection pays for the driver’s and passengers’ medical expenses in an accident, regardless of responsibility.
  • Comprehensive and Collision – Covers vehicle damage from theft, vandalism, flood, or fire, and damage caused if an object or another car damages your work vehicle

Commercial auto insurance may provide additional coverage such as towing and labor, rental reimbursement, and lease gap coverage. Still, they often do not cover tools or other things carried in the vehicle.

A business owner’s policy is required to cover company-owned tools, whereas a homeowners’ or renters’ insurance coverage protects personal items in the car.

How Much Does Commercial Auto Insurance Cost?

Commercial vehicle insurance is often more expensive than personal auto insurance because business insurance often has more significant limits, which implies more coverage in an accident.

A personal vehicle coverage typically covers one individual driving their automobile, but a commercial auto policy covers the whole company. Commercial coverage might include several drivers, cars, trucks, and staff having a bad driving record.

But commercial vehicle insurance can still be surprisingly affordable. The price depends on the specific characteristics of your company and how you use your vehicle. If you only have a few employees using a corporate car, you will pay a far lesser premium than a large corporation with a fleet of vehicles and many drivers.

Some cost factors include:

  • Specific industry risks
  • Number of commercial vehicles under the policy
  • Type of vehicle
  • How frequently you drive for business purposes
  • Coverage type
  • Policy limits
  • Claims history
  • Employees’ driving records

All these factors impact your final commercial car insurance rates.

Get a Quote From Your Duliban Insurance Team

At Duliban Insurance, we match Ontario drivers with comprehensive and affordable auto insurance policies. Our experienced team of agents and brokers understands the intricacies of personal and commercial coverages.

If you use your vehicle for personal and commercial purposes or own multiple vehicles, we can help you find the best insurance to meet your needs. Contact us today to retrieve quotes on the type of auto insurance you are looking for.

Final Thoughts

Your personal policy may be adequate if you occasionally use your automobile for business. But suppose you use your car for work regularly. In that case, you will need a commercial car insurance policy, even if you are self-employed or operate a small business.

If you have any queries concerning your vehicle coverage, please contact your Duliban Insurance Broker to get the answers you need. We can help you find the appropriate auto insurance policy for your vehicle and determine if you need commercial or personal coverage.

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