Commercial vs Personal Auto Insurance
If you want to financially protect yourself and your vehicle, you need to invest in high-quality auto insurance from a reputable insurance company. However, there are several different types of auto insurance that drivers can choose from. So, it doesn’t hurt to learn the basics before committing to a policy.
This leads us to today’s topic — what’s the difference between commercial auto insurance vs personal car insurance in Canada?
Want to learn the answer?
START A QUOTEContinue reading to learn more!
Commercial auto insurance vs personal car insurance in Canada — what’s the difference?
Both commercial and personal car insurance are relatively similar, but there are a handful of important differences that policyholders should be aware of if they want to make the right choice.
Let’s take a quick look at the differences between commercial auto insurance vs personal car insurance in Canada:
What is personal auto insurance?
A personal auto insurance policy is a contract between a policyholder and an auto insurance company. Policyholders make regular payments (generally on a monthly or annual basis), and in return, car insurance covers all (or a portion) of repair costs, legal and/or medical expenses if they are involved in an automotive accident.
Generally, personal auto insurance policies only cover one vehicle that is driven by the policyholder, secondary drivers and people with the policyholder’s permission to operate the vehicle.
Contact an online insurance brokerage at your earliest convenience if you’re looking for personal auto insurance quotes for your vehicle.
What is commercial auto insurance?
A commercial auto insurance policy is a contract between a business owner and an auto insurance company. Much like personal auto insurance, commercial auto insurance financially protects vehicles that are involved in an accident.
However, this is where the two types of coverage start to differ; the main difference between commercial vs personal auto insurance is the scope of the coverage.
Unlike personal auto insurance, commercial auto insurance financially protects an entire business, which allows business owners to cover multiple vehicles and drivers simultaneously.
So, if you’ve been wondering, “what’s the difference between commercial auto insurance vs personal auto insurance?”, you now know that the primary difference is the scope of the coverage (i.e. personal auto insurance covers one vehicle, whereas commercial auto insurance can cover multiple vehicles).
Commercial car insurance vs regular car insurance in Canada — what’s the price difference?
We can’t give you an exact answer due to the fact that every policyholder has a different car insurance rate. That being said, we can say that commercial auto insurance is generally more expensive than personal auto insurance.
There are a handful of reasons why commercial auto insurance tends to be more expensive than personal auto insurance:
For starters, commercial auto insurance provides policyholders with a broader scope of coverage; the more vehicles or drivers you need to cover, the more you need to pay!
Additionally, commercial vehicles are often used to transport people, expensive goods, etc., for profit, which increases the risk of personal property damage and other liability-related claims.
Furthermore, commercial vehicles generally are used significantly more than personal use vehicles. The more they are on the road, the more exposure they have to accidents.
Having multiple drivers with varying driver experience and history also affects the price of coverage. The cost of personal insurance is greatly derived from the driver's experience and history, but, when it comes to commercial auto insurance, the drivers' experience is much smaller factor.
Lastly, carrying goods belonging to other people (postal mail, amazon deliveries, art, etc) will cost less than carrying hazardous goods.
This is something that you should keep in mind while comparing personal and commercial auto insurance quotes with your insurance broker.
Commercial auto insurance vs fleet insurance — what’s the difference?
As mentioned earlier, standard commercial auto insurance allows business owners to cover multiple vehicles at once; however, if you have to protect several commercial vehicles, it may make more sense to invest in fleet coverage.
Fleet coverage is a unique type of commercial auto insurance that allows business owners to financially protect several vehicles from unforeseeable risks and perils.
You may want to invest in fleet insurance if you own a business in one of the following industries:
- Driving schools
- Delivery services
- Home services
- Contracting services - carpentry, drywall, flooring, electrical, plumbing, etc
In most cases, you need to have five (or more) commercial vehicles to qualify for fleet insurance. But, you may be able to obtain fleet insurance with fewer vehicles if you include a personal vehicle in the policy. Check with your insurance advisor, many commercial policies will not allow a personal use vehicle to be added to a commercial policy.
Bonus tip — Click the following link if you’d like to learn more about fleet insurance in Canada.
4 tips for savings on commercial auto insurance in Canada
As mentioned earlier, commercial auto insurance is generally more expensive than personal auto insurance. But, there are a handful of things that you can do to reduce your commercial car insurance rates.
Want the inside scoop? Check out these tips:
Tip #1 — Ask about discounts
Most car insurance companies offer a wide variety of discounts, even for commercial auto insurance. Speak with your insurance broker to learn more about the discounts you qualify for if you want to save on commercial auto insurance.
Tip #2 — Invest in the right vehicles
You’ve probably heard the saying, “you need the right tool for the right job” and the same goes for commercial vehicles. If you run a delivery service, you don’t want to invest in several heavy-duty trucks! Similarly, if you run a construction company, you won’t be able to obtain the same results if your team only had access to four-door sedans.
Tip #3 — Hire safe drivers
Hiring safe drivers is a great way to reduce the overall cost of your commercial auto insurance. If a potential employee will be doing a lot of driving, you should always ask for a driver’s abstract.
Tip #4 — Compare quotes with an online insurance brokerage
If you want to save time and energy while comparing insurance quotes, you should team up with an online insurance brokerage like Surex.
Insurance brokerages are the “one-stop-shop” of insurance quotes. Instead of calling each insurer individually, you can compare multiple quotes at once by teaming up with a brokerage.
Save up to 25% when you bundle multiple insurance policies with Surex
Whether you need personal auto insurance or commercial auto insurance, the first thing you should do is contact your personal Surex insurance advisor. Our advisors are always happy to answer your questions, help you compare quotes and clarify any concerns you may have with your policy.
Want to start comparing quotes from the top auto insurers in Canada? Contact your personal Surex insurance advisor today!
