587-597-5478 heather@thinkinsure.ca

That’s a comment I hear regularly from the consumer when they finally get a quote for their commercial auto premium.  So, they start shopping around as they should and it doesn’t seem to make sense.

Some agents and brokers won’t quote over the phone, some quote high, some quote low.  You take the lowest quote and then when the policy comes in it’s higher than quoted.   It’s all very confusing.

Perhaps the following information will help.

The Government of Alberta mandates certain insurance requirements for all Commercial Vehicles

Transportation Alberta Insurance Requirements so if the Government mandates that everyone carry insurance and the insurance in our province is a private industry how does that work?

It’s called the Facility Association.  Every licensed agent and broker must be prepared to offer the mandatory coverage for licensed vehicles.  If the insurance company they work for or the companies that their brokerage firm represents won’t provide coverage, your auto insurance will end up in the Facility Association.

The Facility Association  is the vehicle by which the insurance industry meets the government requirement for all licenced vehicles to be insured.  Download the Facility Association Brochure for more information.

Premiums are up considerably in commercial insurance and in some cases double.  Rates vary depending on the use and radius of operation and driver history.  Each private insurer has their own set of underwriting rules and guidelines that identify the types of business they wish to write.

For those entrepreneurs starting their own business it’s even more difficult. There are several things that you can do to make sure that you can obtain coverage in the regular market and can avoid being placed in the Facility Association.

  1. Don’t have accidents. Drive safely – it’s that simple.
  2. Convictions don’t help. There are various classes of convictions and they will impact your premium; serious traffic violations more than others.
  3. Keep records of your previous insurance history as a commercial driver. If you are driving for someone else, having verifiable driving information can have a positive effect on your premium.

For the established business a good claims history in addition to those items above….

  1. Vette your drivers before hiring them. Ask for Motor Vehicle Abstracts and driving history.  It costs more to have experienced drivers but the insurance premiums are considerably less!
  2. Maintain a strong vehicle maintenance program.
  3. Utilize technology like GPS tracking, Alarm Systems…(etc.)

Then there is the transportation industry.  That’s a whole new ball game.  In current market conditions, in many cases, it’s not so much a question of best price.  It’s a question of finding coverage with reasonable deductibles and premiums that won’t break the bank.    Find an insurance provider that specializes in transportation risks.  They can provide you with more than just an insurance policy.  They usually have access to more insurers, excellent fleet management programs and technology to help you manage your fleet.  It’s quite possible that the mandatory coverages could be purchased through the Facility Association and an alternate market could provide the physical damage and cargo.

As of writing this column, the deductibles on physical damage with the Facility are a percentage of the list price new of the vehicle.  That means if you have a 2011 Ford E250 with an LPN of $54,000, your deductible will be $6,500 per accident.

Your broker should know who best may be able to assist. Whatever you do, make sure that the provider who choose knows your business as well as the insurance business.

If you have any comments or request for more information on any matter insurance – get in touch with commercial insurance expertheather@thinkinsure.ca