Posted on November 23, 2018
Delivery Driver? Uber Driver? You might not have the right insurance coverage in place.

Having appropriate car insurance coverage is important. Some common questions we hear from our customers include: "What’s the difference between personal and commercial auto insurance coverage?" and "Do I need special coverage if I'm driving my own vehicle for work?" We’re here to help clarify so you know what each type of policy covers and ensure you’re not leaving yourself vulnerable to a potential loss.

What is personal auto insurance?

Personal auto insurance is protects individuals or families using a vehicle for personal use. Personal use of a vehicle includes driving to and from work, and some business use. For example, a real estate agent that drives to and from listings would be covered under their personal policy. Canadian drivers are legally required to carry insurance when operating a vehicle and the fines can be hefty for not having insurance coverage, ranging from $5,000 to $50,000. 

While every auto insurance policy is different, there are standard coverages that are almost always included. Here are a few of the common types of personal auto insurance coverages:

  • Lliability coverage helps protect you if someone is killed or injured, or their property is damaged in an accident for which you’re found at fault.
  • Accident benefits coverage provides you with financial assistance such as medical, rehabilitation coverage and income replacement if you are injured in an automobile accident.
  • Uninsured automobile coverage helps protect you and your family if you’re injured or killed by a driver who doesn’t have insurance.

Why doesn't a personal car insurance policy cover business driving?

  • Business driving is riskier than personal driving. You'll spend a lot more time behind the wheel when business driving, therefore you have a greater risk of accidents and vehicle damage.
  • It could violate your personal auto policy terms. Your contract with your insurance provider covers your car for private use and your policy was priced accordingly.

If you use your personal vehicle for work, you take on more risk – risk that your insurance company didn't agree to cover when writing your policy. As a result, insurance companies can deny a claim if the accident occurred while using your vehicle for business. Some insurance companies might even drop you as a customer.

If you frequently use your personal vehicle for business, talk to your broker immediately, check our your options and consider purchasing a separate car insurance policy for business.

What is commercial auto insurance?

Whether you’re a bakery owner making deliveries or a plumber driving between job sites  — if you own a business that requires the use of a company vehicle, you need commercial auto insurance. Some important coverage components for small business owners include:

  • Bodily injury to you, your employed drivers or passengers including medical expenses and lost wages.
  • Liability for when you’re transporting products to customers or events.
  • Replacement car coverage for when your commercial vehicle is being repaired so you don’t lose business and/or revenues.

Other common questions about auto insurance coverage?

Will my commercial auto policy cover personal use? Personal use is usually covered in your commercial policy, but it’s always best to be sure before making a decision on an insurance provider and policy. Always check with your broker.

How much does commercial auto insurance cost? Every policy is different and there are a number of different factors when determining what your premiums will be. There are things you can do to lower your car insurance premiums, like carry a higher deductible, and if you’re a small business owner, supplementary insurance coverage is tax deductible.

I’m a rideshare driver. Do I need a separate rideshare insurance policy? Always check with your broker to see if your personal auto policy allows for ridesharing and if you require any additional coverage. Some ridesharing companies, such as Uber, are partnering with insurance companies to offer additional commercial coverage to all their drivers.

Where can I purchase commercial auto insurance? If you’re interested in getting more information or a quote for your commercial auto insurance needs, contact us today at 1.888.268.2408 and speak to one of Insurance Jack experts.

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