Compare Commercial Car Insurance Policies
Vehicles are a vital cog in the running of many businesses. Vehicles are an important businesses asset and it is crucial to ensure they are looked after and protected.
Commercial car insurance is designed to protect the vehicles used by a business. It offers cover for theft and accidents for individual vehicles, as well as liability and legal costs for third-party property damage. This type of cover is vital for any companies that have vehicles registered under a business name.
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Commercial car insurance vs Personal car insurance
There are a few key differences between commercial car insurance and personal car insurance policies that should be outlined. An ordinary personal car insurance policy provides coverage when your car is being used for social, domestic and private use. This covers all the stuff you commonly use your car for such as your daily commute, driving to the shops and taking the kids to their weekend sporting games.
As the name would suggest, commercial car insurance covers vehicles that are used for business purposes. This could include commuting between different work sites, delivering or transporting goods, visiting clients and customers in different locations, and a whole long list of other possible uses.
When insurers are underwriting any insurance policy, they take into account the risk each client poses before deciding on whether or not to insure them and how much their premiums will cost. When it comes to car insurance policies, personal cars are seen as less risk of being involved in a claim than cars used for business purposes.
The reason for the insurance companies drawing the line in the sand is simple, commercial cars get more of a work out. Person cars are driven as part of a person’s day-to-day life, often visiting familiar locations and not exposed to too much danger. Business vehicles, on the other hand, are cover greater distances and in peak traffic periods..
Commercial car insurance offers coverage for work vehicles against a range of incidents and events. As mentioned above, if a work vehicle is stolen or is involved in an accident, a commercial car insurance policy will provide a certain level of cover. The cost of repairing or possibly replacing a vehicle can be quite expensive, so a commercial car insurance policy is designed to cover this cost.
Liability cover is a crucial feature of any commercial car insurance policy. If you are driving a work vehicle and cause bodily harm or physical damage to a third party, you would be liable for any compensation awarded. Liability insurance is there to soften the financial burden by covering you for an agreed upon amount.
Depending on the policy and your insurance provider, additional options may be available to provide extra cover, for example for damage caused to yourself or your vehicle by another driver with little or no insurance in place.
What is not covered by business vehicle insurance?
Just like with any other form of insurance policy, commercial car insurance features a range of exclusions. Make sure you’ve read the fine print closely so that you know when a claim will not be paid. Exclusions differ from one policy to the next, but generally claims will not be paid if:
- Someone other than the manufacturer has modified the vehicle and this is not shown on the insurance schedule. Modifications include putting in a more powerful engine or lowering suspension.
- The damage is caused by mechanical failure, rust or wear and tear.
- The damage was caused because your car was either unsafe or was involved in some sort of race.
- You or another employee have intentionally inflicted the damage.
- The damage is caused by a driver who was unlicensed or under the influence of drugs or alcohol.
- The damage is caused by a driver who is not covered by the insurance policy, or by someone who is using the vehicle without permission.
- The vehicle was being used unlawfully.
- The vehicle had been rented or borrowed by an employee for personal use.
- The driver does not take reasonable care to prevent the vehicle suffering initial or further damage.
- The vehicle is carrying an excess load.
- The claim is for existing damage to the vehicle at the time a policy starts.
- If the vehicle is lawfully destroyed by an appropriate authority.
How much does commercial car insurance cost?
If you’re looking to take out a commercial car insurance policy, you should be aware that there are a number of factors that can influence the cost of your premiums. These include:
- The type of vehicle(s). As anyone who has ever purchased car insurance would be aware, a top-of-the-line Porsche is going to cost more to insure than a mid-priced family sedan.
- The number of vehicles. The more vehicles you need to insure, the more you will have to pay.
- What the vehicles are used for. How often are the vehicles driven and how far do they travel when in use? Are they regularly taken to unfamiliar areas in high traffic periods? Do they travel to work sites where a range of hazards may exist?
- Your driving record. Do you and your employees have clean driving records, or do you have a long list of infringements and fines?
- The age of the drivers. Younger drivers have less experience on the roads and are seen to pose more of a risk to insurers. Older, more experienced drivers have fewer accidents.
- Gender. Women have fewer accidents than men so can expect to pay lower premiums.
- Your location. Insurers will take into account the number of vehicle thefts in your area, the amount of local traffic and the road conditions in your area.
- Where the vehicle is kept. A securely garaged car will cost less to cover than a car that is left parked on the street overnight, as the garaged car is seen as being less likely to be stolen.
Is commercial car insurance tax deductible?
When taking out commercial car insurance, it’s important to be aware of the tax implications of this type of cover. The Australian Taxation Office allows premiums to be tax deductible if you are able to prove that the insurance relates to your ability to earn an assessable income. As a result of this, businesses are able to claim the cost of their commercial car insurance premiums as a tax deduction.
How to choose a commercial car insurance policy
Follow the tips below to ensure that you end up with the right car insurance policy for your business needs:
Assess your needs
Before you go shopping for cover, take the time to assess exactly how much cover your business needs. How many vehicles do you need to insure? How many employees drive those vehicles and in what circumstances are they driven? How much protection would you need to protect your financial position if a vehicle was stolen or involved in an accident?
Do your research
Head online to research a number of different insurers. See if you can find a provider who specialises in commercial car insurance policies, seek out online reviews and advice from other business owners, plus compare a range of policies at finder.com.au.
Obtain multiple quotes
Get quotes from a number of different insurance providers to get an idea of how much protection will cost. Don’t just select the first quote you get; shop around for a better deal.
Don't just go for the cheapest option
It’s always wise to remember that you get what you pay for and just because a policy is cheap doesn’t mean it’s right for you. Compare what competing policies actually cover to determine the true value of each insurance policy.
Read the PDS closely
It’s vital that you take the time to examine the PDS of each policy you are considering. Compare the features, benefits and options offered, and don’t forget to familiarise yourself with the exclusions.
Talk to an expert
If you need help finding the right policy for your business, speak to an insurance consultant for advice tailored to your specific needs. A consultant will understand the ins and outs of your business and can help you determine how much cover is required.
Commercial car insurance is a vital consideration for a wide range of workers and companies. To ensure your business has adequate cover in place to protect these very important assets, compare commercial car insurance options at finder.com.au and seek expert advice from an insurance broker.Back to top