A vehicle can be a valuable asset for any self-employed Canadian whose job demands convenient transportation from point A to point B — and in some cases, it’s necessary to get the job done. However, vehicles used for commercial purposes also introduce an added level of risk for your insurance provider that must be accounted for while you’re out on the road. Many of those who are self-employed aren’t aware that this extra risk calls for commercial auto insurance coverage.

Determining if you require coverage apart from your personal auto insurance policy comes down to whether your work is dependent on your vehicle and how often you rely on it for work-related errands.

Maybe you’re a tradesperson driving from job site to job site with tools in your vehicle or a realtor who regularly drives to meet clients. You might need additional auto insurance coverage. Without it, you could be underinsured and run the risk of a denied car insurance claim after an on-the-job collision.

Personal auto insurance versus commercial auto insurance

Both personal auto insurance and commercial auto insurance policies include certain mandatory coverage that pertains to your provincial authority’s guidelines. And though a commercial policy may cost more, comparing car insurance quotes from a variety of providers can help you find the lowest premium possible.

The main difference is that driving your own vehicle to carry out work errands is not covered under your personal policy. Commercial insurance is needed to cover any equipment that may be required for your vehicle use.

For example, if you own a small cleaning company and drive to your customers’ homes with your supplies, or you’re a commissioned creative who regularly delivers your work to clients, you likely require commercial auto insurance

Plus, when you use a vehicle to earn your business money, you can claim commercial auto insurance costs on your income tax, which you can’t do with a personal policy.

What does commercial auto insurance cover?

The coverage provided under a commercial car insurance policy offers many of the mandatory and optional coverages you may already be familiar with. While exact coverage can vary from company to company and between provinces, you can expect your commercial auto policy to offer the following:

• Direct compensation property damage (DCPD). This covers damage to your vehicle and its permanent contents for company drivers in Ontario, Quebec, and New Brunswick who aren’t completely at fault for a collision.
• Accident benefits. This provides coverage for medical expenses, loss of income due to injury, rehabilitation therapy post-collision, and funeral costs in the event of a death.
• Third-party liability. This covers bodily injury to others caused by the driver of the company vehicle and damage to another person’s property.
• Uninsured automobile coverage. This covers injuries to, or death of the company driver caused by a motorist without a valid auto insurance policy or an unidentified driver.
• Collision coverage. This is optional and covers damage to your vehicle after a collision.
• Comprehensive coverage. This is also optional and covers loss or damage to your vehicle caused by non-collision-related mishaps, like flying objects, falling trees, theft, or vandalism.
• Family protection coverage. This is an optional insurance endorsement (add-on) that protects company drivers from damage or injury caused by an underinsured or uninsured at-fault driver.

How to save on commercial car insurance

Beyond comparing car insurance rates, there are a few other ways you can find the lowest premium available when using your vehicle for work. The good news is that, in most cases, you can use your vehicle for both personal and work reasons, so long as you have a commercial insurance policy.

Choosing a vehicle model with a low Canadian Loss Experience Automobile Rating (CLEAR) can also help you maintain a lower premium, as can installing a GPS tracker to prevent theft. And if you rent or own the building you work out of, bundling commercial property and auto insurance with the same provider can offer a discount, depending on the provider. If you work from home, bundling your home/renter's insurance with your auto insurance policy can also provide savings.

Regardless of which route you take, talk to your insurance broker about your commercial auto needs before assuming you have coverage on your personal policy. It’s better to be sure you’re properly insured before an accident interrupts your workday.