Getting into a car accident in your personal vehicle can be incredibly overwhelming. But getting into an accident in a work vehicle can be even more stressful, especially if you aren’t sure if or how the accident will impact your personal car insurance rates. Below, we explain the differences between personal car insurance and commercial auto insurance to help you understand how collisions in work vehicles may or may not impact your personal auto insurance rates.
Getting into a car accident in a work vehicle
If you get into an accident in a company car, you may be wondering what happens next. Specifically, you may have a lot of questions about who is liable and how the accident could affect your auto insurance rates. Some of the most common questions people have after getting into an accident in a work vehicle include:
- Am I responsible for the damages caused by the accident or is the company I work for?
- Whose insurance company pays for the damages suffered?
- How will fault be determined?
Given the many questions that are likely to be swirling around in your head following an accident, we recommend reaching out to an insurance broker at BrokerLink who can help explain the different types of auto insurance out there and how commercial auto insurance can protect you. A broker can also explain Ontario’s fault determination rules in detail, which will give you a better idea of who determines fault and how it is determined following an accident.
If I get into an accident in a company car, will it impact my personal car insurance rates?
It might. Ultimately, it depends on a number of factors. However, getting into an accident in a work vehicle has the ability to impact your personal auto insurance premium if the accident appears on your driving record. Generally speaking, if the accident you got into was serious and resulted in bodily injury or extensive damage to your vehicle, it is likely to be listed on your personal driving record. As such, when it comes time to renew your policy and an insurance agent reviews your record, they may see the accident and increase your rates accordingly.
Further, depending on your reason for driving the company car at the time of the accident, your insurance rates may also be affected. For example, if it is determined that you were driving a company car for personal reasons, your company’s commercial auto insurance coverage may not apply. Instead, it would be your own car insurance coverage, like accident benefits coverage or third party liability car insurance that would apply. On the other hand, if it is determined that you were driving a work car for business purposes, your employer’s commercial auto insurance policy or fleet insurance policy will likely cover the damages through the liability car insurance portion of their plan.
It is worth noting that even if the circumstances of the accident do not necessitate a call to your personal auto insurance provider, there’s still a chance that your provider will find out about the collision. In essence, if any infraction gets added to your official driving record, an insurance agent will be able to see it if they run a check on your record, which most do from time to time or when your policy is up for renewal. Even if the accident was not your fault, there is still a chance that it could impact your rates if an insurance company sees an accident on your record. This is because drivers who have been involved in collisions, even in collisions in work cars, are seen as riskier than those with clean records.
Work accidents: employer vs. employee liability
Determining fault after an accident is necessary in Canada, as the driver who is held liable for the accident is ultimately responsible for covering the cost of the damages. That said, when an accident occurs in a work vehicle, there is an extra layer of information to uncover. Not only does fault need to be determined, but so too do other circumstances surrounding the accident, such as whether the employee was driving the car for business or personal reasons at the time of the incident.
Let’s assume that the person driving the work vehicle, in this case, the employee is found to be at fault for the accident. Below, we outline the circumstances under which the employer would be liable for the cost of damages through their commercial auto insurance policy and when the employee would be liable for the cost of damages through their personal car insurance policy.
The employer may be liable if:
- The employee’s actions were conducted within the scope of employment
- The employee’s actions were performed while on the job
- The employee was performing a task they were hired to perform
- The employer benefitted from the activity being performed by the employee at the time of the accident
Thus, if an employee causes a car accident while driving a company car for business purposes or even while driving their own car for tasks related to their job, the employer will likely be on the hook for the cost of damages.
The employee may be liable if:
- They were driving for personal reasons at the time of the accident, such as running an errand, even if they were driving during work hours or operating a company vehicle
- They were committing a crime at the time of the accident
- They were commuting to or from work
It is worth noting that commuting is not typically considered a business use or purpose or within the scope of employment for an employee, and thus is usually not covered by an employer’s commercial auto insurance plan.
Ultimately, if you get into an at-fault accident and are found to be liable rather than your employer, your employer’s commercial auto insurance plan won’t cover you. Instead, you would have to file a claim with your personal car insurance provider.
How commercial auto insurance works
Commercial auto insurance functions similarly to personal car insurance in Toronto or anywhere else in Canada, save for the fact that it is designed to cover vehicles used for business purposes. These may be known as work vehicles or company cars. No matter what type of vehicles a business uses in their operations, whether it be a delivery van, semi-truck, or basic passenger car, they will need a commercial auto insurance plan to protect them from the risks of the road.
A reminder that car insurance is mandatory in Canada, and driving without it is illegal. Thus, just as motorists are required to purchase car insurance for personal use of their vehicles, so too are businesses for commercial use of their vehicles. What constitutes business use of a vehicle in Canada? Generally speaking, this could be anything from transporting materials to and from job sites to delivering products to and from customers’ homes. Even visiting clients’ offices or homes can constitute business use. It is important to note that most personal car insurance plans do not cover business use. Similarly, most commercial auto insurance plans do not cover personal use. Thus, even if your employees have personal auto insurance policies, they will not be covered when driving a company car or when driving a personal vehicle for business use. A separate commercial auto insurance plan is required.
When your business purchases a commercial auto insurance policy, you will be covered for a wide range of risks, such as if your employee gets into an accident that they are at fault for or if a thief breaks into your warehouse one night and steals your work vehicles. If something goes wrong, you can file a claim with your insurance company and receive a payout to help cover the costs. Thus, just like with personal car insurance, the primary purpose of commercial auto insurance is financial security.
Personal car insurance vs. commercial car insurance
You have probably started to understand by now that personal car insurance and commercial car insurance are not one and the same. Although they may both feature certain types of coverage, like comprehensive car coverage or collision car insurance, the coverage applies to different situations. Unsurprisingly, personal car insurance coverage applies to drivers who are operating a car for personal reasons, while commercial car insurance coverage applies to drivers who are operating a car for business reasons. The two are not interchangeable which is why you should never assume that having one policy covers you for the other. For instance, if you got into a collision while transporting equipment from a job site, whether you were driving your own vehicle or a work vehicle, your personal car insurance plan would likely not apply since you were driving your car for business purposes at the time of the accident. Instead, your employer would need to file a claim with their commercial auto insurance policy. If you tried to file a claim with your personal auto insurance provider, it would likely be rejected.
How accidents affect car insurance rates
Now that you know a little bit more about the differences between commercial auto insurance and personal car insurance, and when each might apply, let’s dive deeper into how accidents affect car insurance rates. Whether you get into an accident in a work vehicle or a personal vehicle, there is always a chance that the accident will affect your car insurance premiums.
If you get into an accident in Canada, your insurance rates may go up. However, if they go up and how much they go up by will likely depend on several factors, including:
- Whether you are deemed to be at fault for the accident
- Your driving record
- The cost of the accident claim
It is also important to note that if you were not at fault for the accident, then your rates may remain unchanged. Even if you were at fault for the accident, depending on its severity and the other circumstances surrounding it, your rates may only go up by a small amount. For instance, your rates may not change much if the following statements apply to you:
- Your car insurance policy features accident forgiveness coverage
- You are not at fault for the accident
- You have a clean driving record with no traffic convictions or violations
- The accident was minor and did not involve any bodily injury and minimal to no property damage
In addition, if you have accident forgiveness coverage, the insurance company may not raise your rates at all, even after an at-fault accident. Accident forgiveness is additional coverage that can be added to your car insurance policy as an endorsement. It can both protect your driving record and prevent your insurance premium from increasing if you have an at-fault accident claim. Please note that coverage varies by province.
Finally, if your rates are impacted following an accident, they likely won’t go up until your policy renews. For more information on how much car insurance costs per month in Ontario and how a collision can impact your monthly rates, contact BrokerLink.
Contact BrokerLink to learn more about commercial auto insurance and how accidents impact car insurance
Whether you have questions about how commercial auto insurance works, how collisions can impact car insurance rates, or what to do if you get into an accident in a work vehicle, contact BrokerLink. We are auto insurance experts, which means that any one of our licensed insurance brokers will be able to answer all of your car insurance-related queries, including questions like: If I get into an accident in a work vehicle, will my personal car insurance policy be affected?
Plus, as a full-service auto insurance brokerage, the BrokerLink team is always happy to help you purchase the right kind of insurance coverage for your needs. For instance, we will make sure that you have mandatory coverage, such as Uninsured automobile insurance, as well as any additional coverage that may benefit you, such as collision or comprehensive coverage. We can also give you tips on ways to save money on car insurance, such as by bundling policies or buying multiple auto insurance policies. Contact BrokerLink today to learn more about auto insurance and request a free quote.
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