7 Business Vehicle Insurance Facts You Need to Know

Whether it is your personal car or a commercial vehicle, opting for auto insurancefor either case is a smart move. After all, running a business already contributes to a huge chunk of responsibility and stress, and a damaged commercial car with no insurance backup is the last thing that you need on your plate.

However, when it comes to choosing the right plan for your commercial vehicle, you have to understand that it’s a little different from buying insurance for your personal car. So in this article, we will discuss 7 business vehicle insurance facts that you need to know before you proceed.

Also, if you want to learn in detail about the different insurance coverage options that you have for your commercial vehicle in Edmonton, click out this site.

Commercial Vehicle Insurance Premiums Are Costlier Than Personal Vehicle Insurance Premiums

The charge of insurance premiums rises with the increased chances of accidents. You will notice that if your car has a record of getting into accidents frequently, your insurance charges will go up. Similarly, since commercial vehicles are used more frequently, whether it is to transport goods or people, they are at a higher chance of getting into an accident, and hence your insurer will charge you more for the premium.

Another thing that adds to the higher cost of the premium is the fact that personal car insurance does not cover the passengers or the hired drivers whereas, under most commercial vehicle insurance, the hired drivers and the passengers are also covered.

Your Driver’s Past Record Is Very Important

You might be wondering what the previous records of your driver have to do with your vehicle’s insurance, right? Well, when hiring a driver for your commercial vehicle, they need to have a clean past record of driving apart from good driving skills.

Since commercial vehicle insurance covers up the hired drivers as well, no one would want a reckless driver with previous records of countless accidents.

Drivers with a messy record do not just put your business at a higher risk, but since the chances of claiming coverage increase, your premium charges also go up. Thus it is always safer to hire a good driver, train them well and only then get them to work.

Certain Things Aren’t Covered By Your Insurance

The moment you get your auto insurance you might feel that your vehicle is 100% secured but that is not true. Although commercial vehicle insurance covers a lot more things than personal vehicle insurance, there still are quite a few things that are not included in the coverage.

  • In case there is a mechanical or electrical breakdown, or regular wear and tear, or if the vehicle is damaged because it was used beyond its capacity, your auto insurance will not cover the charges.
  • Also, if the vehicle was being used outside the insured geographical area and it was driven by someone other than the person mentioned in the driver’s clause, your insurer might reject your claim.

Commercial Vehicle Insurance Is Not An Option

That’s right. Whether you like it or not, in most countries, commercial vehicle insurance and even personal car insurance are not an option. It is required by law, even in Canada. For all the provinces in Canada, you will need to have a minimum of $200,000 insurance from a third party except the city of Quebec, where the minimum amount of insurance coverage is $50,000. 

Without an insurance policy, it is illegal to drive in Canada as well as other states and countries where commercial vehicle insurance is mandatory. Usually, if you are caught without insurance cover, the punishment is a huge fine but again that varies from state to state. Apart from the cost of a fine, you are also putting yourself at a huge risk of financial loss in case your vehicle gets into an accident.

You Might Have To Pay Even After You Cancel Your Policy

Auto insurances are tricky so you need to make sure that you read and understand all the terms of the agreement before you sign it. In most cases, when you cancel your business vehicle insurance, you still have to pay a certain amount in terms of penalty, fees, or additional charges on cancellation. It is an old trick played by some insurance companies to keep extracting money from the customer even after they cancel the policy. Thus, choose your insurer wisely.

Don’t Forget To Check Out If Your Insurer Provides A No Claim Bonus

A No-Claim Bonus is basically an additional discount on your policy renewal if you successfully maintain a no-claim record throughout the tenure. The discount often ranges from 20% to 50% and is cumulative, which means it increases every year. However, not all insurance policies or companies offer a no-claim bonus, so before you buy an insurance policy, check with your insurer.

Personal Accident Riders Add-On To Help The Injured Make A Living

Personal accident riders is a benefit that can be added to your existing policy at an extra cost. Now let’s say you are a driver by profession, so how will you earn a living during the time you are in the hospital recovering from a car accident? That’s where personal accident riders step in.

Under this benefit, the insurance company pays the driver a certain amount for the time when he is not able to earn due to complete or partial disability and even in case of death. However, you need to keep in mind that the amount that will be paid to the victim depends on the company and the policy.

EndNote

So those were the 7 important facts that you should know before buying business vehicle insurance. Remember, whatever kind of insurance policy you choose to buy, whether it is for your car or for yourself, you should always research a little, compare prices, check all the benefits and features that you are getting, understand the terms and conditions and only then proceed to buy. An investment like insurance shouldn’t be done hastily.

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