Commercial Car Insurance Trends
As a business owner, you need to do everything you can to protect the business you’ve built.
One of the most common ways business owners protect their businesses is by investing in high-quality commercial car insurance. For those that don’t know, commercial car insurance is a form of coverage that protects drivers and/or vehicles that are used for business purposes.
Unfortunately for business owners, commercial car insurance rates in Canada have been on the rise over the past handful of years. Many car insurance experts feel that the increase in commercial car auto insurance rates is (in part) related to the trends and events listed below.
START A QUOTEBut, before getting started, you probably want to learn more about the price of commercial auto insurance in Canada.
How much is commercial car insurance in Canada?
The average price of commercial auto insurance depends on a number of factors, like the location of your business. For instance, if your business is located in Ontario, you can expect to pay roughly $100 to $300 a month (or $1,200 to $3,600 a year).
However, it’s important to note that even though the average is $100 to $300 a month, you may end up paying more (or less) for coverage. The price of your commercial auto coverage will be influenced by a number of individualized factors, including the type/level of coverage, the number of vehicles/drivers you intend to cover and the drivers’ level of on-road experience.
Speak with your Surex insurance advisor for details regarding pricing, coverage, quotes, etc.
Trends that have influenced the price of commercial car insurance in Canada
The following trends and events have had an impact on the price of company car insurance rates in Canada:
#1 — The legalization of cannabis in Canada
On October 17, 2018, Canada’s Cannabis Act came into effect throughout all provinces and territories.
The Cannabis Act allows Canadians over the legal age (18 in Quebec and Alberta, 19 in the other provinces and territories) to use cannabis recreationally.
However, one of the caveats of the legalization of cannabis is that it’s still illegal to operate a motor vehicle while under the influence of the substance.
Studies have shown that driving under the influence of cannabis can increase the risk of an accident by approximately 500%. Drivers that are caught operating a motor vehicle while under the influence of cannabis (or other mind-altering substances, like drugs or alcohol) will receive a DUI infraction.
So, how does this affect commercial car insurance rates in Canada? Simply put, the legalization of cannabis has increased the potential for DUIs, thus negatively influencing the overall risk level of Canadian roadways. In turn, the increased risk level can translate to higher car insurance rates.
This is a particular risk for businesses located in rural areas, as studies have shown that the majority of impaired driving events take place outside of major cities and towns.
#2 — Increased level of distracted driving
As you may know, distracted driving has become a growing issue over the past several years. This is primarily due to the introduction of cellphones and other mobile technology.
For those that don’t know, distracted driving is the act of taking your focus off the road and onto a screen, device or other non-driving related items.
One of the most common examples of distracted driving is texting and driving. From 2010 to 2019, there was a 102% increase in the number of cases where distracted driving led to (or contributed to) a car accident.
How exactly does this influence commercial car insurance rates in Canada? Once again, it increases the overall risk of driving on Canadian roadways, which can lead to an overall increase in commercial insurance for car rates.
All business owners should take this information into consideration; however, studies show that drivers born between the years 1981 and 1996 (i.e. millennials) are most likely to text and drive. That being said, business owners with a number of employees within this age range should take extra steps to prevent distracted driving.
#3 — Skyrocketing vehicle repair costs
There are plenty of things that business owners can do to reduce the risk of DUIs and distracted driving within their business. That being said, there’s very little that business owners can do about the recent rise in vehicle repair costs.
Over the past few years, the average vehicle repair cost has risen by an astronomical amount. This price jump is influenced by a number of factors, primarily the inclusion of high-end technology in vehicles.
Most modern vehicles come equipped with a variety of cameras, sensors and other useful pieces of technology. Although having certain gadgets can be beneficial, they can also be costly to repair.
Unlike basic automobile parts (like bumpers, tires, etc.), modern vehicle technology requires specialized technicians, tools and parts to repair. In turn, modern vehicle technology requires a significant amount of time, labour and funds to repair. For instance, a Park Assist parking camera can cost upwards of $500 to replace.
Commercial car insurance companies use the repair/replacement value of a vehicle to determine the price of a driver’s rates. Vehicles that have a higher repair/replacement value are more costly to insure because the insurance carrier will have to provide a larger payout in the event of an accident (in comparison to a vehicle that has a lower repair/replacement value).
The most practical way for business owners to combat this growing expense is to purchase vehicles that don’t feature high-end technology or gadgets.
How can business owners save on commercial car insurance in Canada?
The easiest way for business owners to save on coverage is by getting commercial car insurance quotes from a reputable brokerage, like our team at Surex.
Although we can’t change car insurance trends, we can provide you with quality commercial car insurance quotes from Canada’s top providers.
Not a fan of getting quotes over the phone? No problem!
At Surex, we know there’s more than one solution to every problem — that’s why we’ve made it easy to get the perfect commercial car insurance quote online or over the phone!
Call or click today to learn how our advisors can help you save a significant amount on your coverage today!
