4 myths about the cost of commercial auto insurance

Do you own a commercial vehicle that you use for construction, housekeeping, property management or deliveries? If so, you probably rely on it every day to keep your small business moving. That’s why having the right coverage at the right price matters.

With all the myths out there, shopping for commercial automobile insurance can get confusing. This article will break down those myths and clear up which factors influence your commercial vehicle insurance costs. We’ll also explain what really influences your premiums (what you pay for auto coverage) and how you can find the right insurance coverage for you.

1. Commercial auto policy vs. personal auto policy
2. 4 myths about your business auto insurance costs
3. What actually affects the cost of your commercial auto insurance
4. How to lower the price of your commercial vehicle insurance
5. Useful information: Deductible expenses
6. Get a quick quote
7. FAQ: Commercial vehicle insurance costs

You might wonder what makes commercial auto insurance any different from personal auto insurance, especially considering the contrast in price. Often, insurance premiums for commercial vehicles can be higher. That’s because coverage is tailored to your business’s real risk management needs, which depend on your line of work and the size of your company.

For example, someone who uses their vehicle mainly for personal travel usually makes fewer daily trips. On the other hand, vehicles used for business purposes are often on the road a lot. They may make multiple trips, carry specialized materials or be driven in demanding environments, such as worksites or urban delivery areas. This means a higher risk of an accident, requiring special coverage to adequately protect your business, employees and assets. That’s why higher premiums aren’t just another cost—they’re an investment in an insurance policy adapted to your business.

Understanding this key difference is the first step to breaking down common misconceptions—and there are plenty out there. Let’s shed some light on what commercial insurance for vehicles is all about.

There’s no truth to this myth. You can rest assured that the paint job on your truck, van or car has no effect on how your commercial vehicle insurance premiums are calculated.

Insurance companies care about the important stuff: vehicle type, daily usage (worksite, delivery or service), radius, road safety and driver history. So feel free to choose whatever colour palette best represents your brand image—it won’t affect your premiums!

Personal auto insurance usually doesn’t cover your vehicle when you’re driving it for business purposes. This means that if you’re in an accident and your vehicle suffers property damage, your claim could be denied.

It’s a good idea to check with your insurance company to see whether your current coverage makes sense for you. A simple update might be all that’s needed to get you the right coverage for your business activities. And there’s no better peace of mind for driving than the knowledge that you’ve chosen the right coverage option for your business. To learn more, check out our page on commercial vehicle insurance.

This is absolutely not true. Your line of business is one of the biggest factors that impacts your premium. Your insurer has to carefully evaluate how you use your vehicle to identify your specific risks.

For example, the owner of a construction business who uses heavy commercial vehicles to transport equipment won’t have the same needs as a property manager who just makes the occasional trip.

Insuring multiple eligible vehicles could be a major source of savings. While each commercial vehicle does increase the overall premium, your per-car premium may go down quite a bit. For a small business, this can be a big difference.

Now that we’ve debunked a few common myths, it’s hopefully a little clearer how commercial auto insurance costs are calculated. But what other factors should you know about? This section will explain what actually goes into setting your commercial vehicles’ insurance premiums.

What you do for work is crucial. Your insurer will look at a range of factors, including:

• Usage: Company vehicles face different risks, depending on whether they’re used to visit worksites, make deliveries, transport sales reps or move merchandise, just to name a few examples.
• Industry: Construction sites, real estate firms, delivery businesses and retail stores all face different risks and have different exposures to things like property damage and bodily injury. As a result, they can have very different coverage needs.
• Radius of operation: How far do your vehicles travel from their usual parking spot?
• Specialized equipment: If specialized equipment like a lift or a ladder is attached to your vehicle, it can affect the value of your vehicle and your risk levels.

Who drives an employer’s vehicle can also have a major impact on risk levels.

• Driving record: Driver experience, number of years licensed, insurance claims history and risk levels are all closely examined.
• Number of employee drivers: Your risk profile may vary based on how many people are listed on your policy. A commercial vehicle faces different risks if there’s only one driver, say a property manager, versus a team of drivers, like all the employees at a moving company.

There are a number of factors that impact both commercial and personal vehicle insurance. Some of them include:

• Vehicle type: Make, model and year.
• Deductible: The amount you pay out of pocket before your insurance kicks in if something happens to your vehicle. In some cases, a higher deductible can help lower premiums.
• Operating area: Where are your vehicles being driven? In the countryside, the city or both?

Read our article on how your car insurance premiums are calculated to find out how these factors can impact your insurance costs.

There are a number of ways to bring down the cost of your commercial auto insurance. Here are some concrete steps you can take to lower your commercial insurance premium without compromising on safety.

By covering multiple vehicles, you could actually save money. Desjardins Insurance offers a multi-vehicle discount when you insure two or more commercial vehicles. By centralizing everything, you could cut your commercial vehicle insurance costs and make managing your insurance easier.

Consider consolidating all of your business insurance with the same insurance company. By bundling your business property and liability insurance together with your commercial vehicle insurance, you could benefit from additional savings through a Double Contract or multi-product discount with Desjardins Insurance. This strategy can be a good way to lower your business insurance premiums. To better understand the coverage options that could complement your commercial vehicle insurance, check out our overview of the main types of business insurance coverage.

Higher deductibles generally mean lower premiums. You should make sure, however, that your business has enough liquid assets to pay your deductible if you need to make a claim. Talk to an insurance advisor to help you find a balance that’s right for you.

Your business is always changing, and your business insurance needs are too. Whenever you renew your insurance, take a moment and check to see if there have been any changes to your vehicles, drivers or usage, and tweak your coverage accordingly.

Now that you know more about the myths and facts of commercial auto insurance costs, you have all the information you need to help you review your business insurance needs.

Getting a quote that’s tailored to your business reality is quick and easy. If you’d rather have personalized support, you can  and we’ll take a look at the ins and outs of your business. Get a business insurance quote today and find coverage that’s tailored to your business. and we’ll take a look at the ins and outs of your business. Get a business insurance quote today and find coverage that’s tailored to your business.

Certain conditions, exclusions and limitations may apply. The terms and conditions of the coverages described are set out in the insurance policy, which always prevails. These tips are provided for information and prevention purposes only. They are general in nature, and Desjardins Insurance cannot be held liable for them. We recommend using caution and consulting a certified insurance agent for comprehensive, tailored advice.

Desjardins Insurance refers to Desjardins General Insurance Inc. in Quebec and Certas Direct Insurance Company or Certas Home and Auto Insurance Company, underwriters of automobile and property insurance in other provinces and territories.