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Commercial Auto Insurance - Detailed Information

Whether you have one commercial vehicle or an entire fleet, you need the right coverage to keep you on the road and headed for success. Commercial policies can be purchased as a stand-alone commercial policy or if qualified to a business auto policy. If your business requires you to use a commercial vehicle it is a wise idea to get commercial auto insurance to keep your vehicle protected financially. With this type of insurance you do not have to worry about taking your business forward. The type of vehicle insurance you buy will totally depends on the type of business you use the vehicle for.

Business vehicle(s) - You need this if you use your vehicle for business/commercial purposes rather than for personal use (e.g. contractor or delivery vans, landscaping trucks etc). Premiums are based on the driver and vehicle's own driving record, claims history, coverage, limits, and deductibles.

Fleet of vehicles - You'll need this type of policy if you own or manage a fleet consisting of five or more vehicles, whether they are used for commercial, business, or public purposes.

Garage Operation - Garages, dealership, service station and more - If your business has other people's automobiles in your care and control, you'll need garage insurance - this is for owners of new and used car dealerships, repair garages, body shops, specialty shops, service stations, gas bars, car washes, and parking garages or lots.

Businesses run the risk of several types of losses and one of the main losses can be during transportation of products or any service. If your business requires you to use a vehicle for some purpose there is always a risk that the vehicle may get involved in an accident. While on the road, a sudden shift in traffic may cause your vehicle to topple over. It could also get damaged as a result of vandalism on the streets or an uninsured motorist could even hit your vehicle. In all these cases, you will require a lot of money out-of-pocket to mend your damaged car. However, with proper commercial vehicle insurance you may be able to ensure that your vehicle is taken care of in such situations without you having to spend too much money out-of-pocket.

A Broker should be able to help you with this decision. If you are looking for commercial vehicle insurance, a Broker is the best person to assist you in buying the right kind of policy to cover your vehicle or vehicles.

Mandatory Coverage:

To drive in Ontario, you must have direct compensation - property damage (DCPD) coverage, uninsured automobile coverage, liability - bodily injury coverage, and accident benefits coverage. These are all compulsory. This means that, by law, you must buy these types of coverage.

Liability - Bodily Injury

Protects you if someone else is killed or injured or their property is damaged. It will pay for legitimate claims against you up to the limit of your coverage and will pay for the costs of settling the claims. The minimum required amount of coverage is $200,000 in Ontario though higher limits are recommended.

Accident Benefits

Provides benefits if you are injured or killed in an automobile collision anywhere in Canada and the United States regardless of who caused the collision. These benefits may include:

  • Income replacement.
  • Payments to non-earners who suffer a complete inability to carry on a normal life.
  • Care expenses to persons who cannot continue as a primary caregiver to a member of their household.
  • Medical, rehabilitation and attendant care expenses.
  • Certain other expenses.
  • Funeral expenses.
  • Payments to survivors of a person who is killed.

The details of the accident benefits are set out in the statutory accident benefits schedule of the Insurance Act of Ontario, and are also available on Insurance Bureau of Canada's website at www.ibc.ca.

Please refer to your policy documents for the standard limits of coverage for each category provided.

Uninsured Automobile

Protects you if you are injured or killed by an uninsured motorist or hit-and-run driver to the extent that you were not at fault. Covers damage to your automobile caused by an identified uninsured motorist. The policy carries a $200,000 limit for injury or death and a limit of up to $25,000 for damage to your vehicle subject to a deductible of $300.

Direct Compensation - Property Damage (DCPD)

This coverage allows you to claim for damage to your vehicle and its contents caused by someone else. DCPD means that, to the extent that you are not at fault in a collision with another vehicle, your own insurer will pay for damage to your vehicle and its contents. Standard $500 deductible (can be increased or decreased).

Optional Coverage:

You are not required by law to purchase collision or comprehensive coverage. However, if you owe money on your vehicle, your lienholder (the person or group you are making payments to if your car loan is not paid in full) may require you to have these types of coverage to protect their interest in your vehicle.

Collision or Upset

This coverage pays for damage to your vehicle to the extent that you are at fault or for damage caused by an unidentified vehicle or object. The standard deductible is $500 for collision or upset and $300 for comprehensive; however, you may choose a higher deductible in order to decrease your rates.

Comprehensive

This coverage pays for all insured damage to your vehicle except for collision damage (e.g., pays for fire, theft and vandalism).

All Perils

This coverage combines collision and comprehensive. It is the broadest coverage available and it includes all types of coverage unless specifically excluded.

Specified Perils

This coverage pays only for losses caused by perils specifically listed in the policy (primarily fire and theft).

Increased Liability

You may buy coverage beyond the minimum required by law to $1 Million or $2 million. Typically brokers and insurers will require a minimum of $1 Million.

Increased Accident Benefits

You may buy coverage beyond the minimum required by law. The optional benefits your Insurance company offers are:

  • Increased income replacement.
  • Caregiver, housekeeping and home maintenance.
  • Increased medical, rehabilitation and attendant care.
  • Increased death and funeral.
  • Dependant care.
  • Indexation of benefits to inflation.

Please refer to your policy documents for optional increased limits or speak to your broker.

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