Commercial Car Insurance 101
If you’re trying to make sense of commercial car insurance coverage for your business, the following general terms and coverages can help.
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The 2 C’s of Commercial Car Insurance
Collision covers damage to your car when your car hits, or is hit by, another vehicle or other object. Collision pays to repair your vehicle, less the deductible you choose. For older cars, you may want to consider dropping this coverage, since it is typically limited to the cash value of your car. This coverage is not required, but if you have a loan or a lease, the lien holder may require it.
Comprehensive (also referred to as Other Than Collision or OTC) covers your vehicle, and sometimes other vehicles you may be driving, for losses resulting from incidents other than collision. This includes damage to your car if it is stolen or damaged by flood, fire, falling objects or animals. While no province requires that you purchase collision or comprehensive coverage, if your organization has a car loan or the vehicle is leased, your lender may insist that you carry certain types of insurance until your loan is paid off.
A Note on Deductibles
Opting for a higher deductible can help to lower your car insurance premium. Remember, the higher the deductible, the more you’ll pay out of pocket if you have a claim. When deciding on a deductible that’s right for your business, take into consideration your organization’s available cash, the value of the vehicle and your organization’s tolerance for risk.
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4 Types of Liability Coverage
Third-Party Bodily Injury Liability (BI) covers injuries that you, the designated driver or policyholder (i.e. your organization) is alleged to cause to someone else. Claims for bodily injury include medical bills, loss of income, or pain and suffering. It does NOT cover the cost of damage to your organization’s vehicle. While it is mandatory in all provinces, minimum insurance requirements differ. It also provides you with legal defence if another party files a lawsuit against you.
Third-Party Property Damage Liability (PD) covers you or someone driving the car with your permission if the car damages someone else’s property. Typically the property is another vehicle but it could be a fence, telephone pole, a house, etc. It also provides you with legal defence if another party files a lawsuit against you.
Accident Benefits coverage can provide medical expenses, income replacement and other possible benefits to you and your passengers injured in an accident. This coverage is mandatory in some provinces.
Uninsured and Underinsured Motorist (UM or UIM) coverage will reimburse you, a member of your family, or a designated driver if one of you is hit by an uninsured or hit-and-run driver. UM coverage comes into play when an at-fault driver has insufficient insurance to pay for your total loss. This coverage will also protect you if you are hit as a pedestrian.
Each province has mandatory commercial car insurance requirements. An ALIGNED Advocate can help you ensure that you have appropriate coverage for all of your business locations.
To get a Commercial Car Insurance Quote talk to one of our business insurance brokers today about how we can help you secure the best products, services and insurance solutions for your business.
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