Commercial Auto Vs. Personal Auto Insurance

Whether you have a fleet, a tractor-trailer, or a company vehicle that’s used by more than one person, you may want to know if you require commercial auto insurance. You’re in the right place—let’s break down when you need personal or commercial auto insurance from MPI: 

What Is Personal Auto Insurance?

Personal auto insurance is the most common type of auto insurance. Most personal auto insurance plans offer a combination of coverages, including:

• Liability insurance—to protect you when you injure a person or damage property while driving
• Property insurance—to protect you when your car or its contents are damaged or stolen
• Other coverages—the Manitoba Public Insurance Personal Injury Protection Plan (PIPP) or Loss of Use coverage

The goal of these insurance plans is to protect motorists on and off the road. A personal auto insurance plan protects the owner of the vehicle even when someone who is not the owner is driving. There are several exceptions to this rule—the person driving must be legally allowed to drive, for example—and you can find all of those exceptions on MPI’s “What’s not covered with your insurance” page. 

What Is Commercial Auto Insurance?

Much like personal auto insurance, commercial auto insurance covers liability, property, and more. Unlike personal auto insurance, commercial auto insurance is designed to cover:

• Large fleets of vehicles
• Passenger vehicles for hire
• Specialized vehicles like semi-trucks and passenger buses
• And other vehicles used in a commercial capacity

Not all businesses need commercial auto insurance—small fleets of cars that aren’t being used as passenger vehicles for hire can typically be insured under personal auto insurance plans. 

What Type of Insurance Policy Do I Need?

As a business owner, it can be difficult to determine whether or not you need commercial auto insurance or personal auto insurance. Here are a few questions you can ask to figure out what kind of auto insurance policy you need: 

What Kind of Vehicle Is Being Insured?

Certain commercial vehicles must be insured by a commercial auto insurance policy in Manitoba. According to MPI, these vehicles include*:

• large trucks (including truck tractors and tankers) with a gross vehicle weight in excess of 16,330 kg
• common carrier buses
• commercial trucks with a gross vehicle weight in excess of 11,794 kg that operate beyond a 161 km radius outside the borders of Manitoba
• semi-trailers
• fire department vehicles

*This information was copied directly from MPI’s commercial insurance coverage page

If one of your vehicles falls into any of these categories, you’ll need a commercial auto insurance policy. On the other hand, if you have a more typical personal vehicle, it’s more likely that you’ll only need a personal auto insurance policy. 

How Is the Vehicle Being Used?

The use of your vehicle can also impact whether you need a personal vehicle or a commercial vehicle insurance policy. You may need commercial coverage if:

• You’re using your vehicle as a passenger vehicle for hire (Ubers, taxis, and the like)
• You need additional cargo liability coverage
• You have a large fleet of vehicles—especially if you operate a car dealership

Any of these circumstances—and others—can warrant purchasing commercial auto coverage from MPI’s Special Risk Extension program—the program through which MPI offers commercial car insurance. Anytime you’re using your vehicle for business purposes, it can be worth talking to a broker about commercial coverage. 

How Much Liability Insurance Is Required?

The commercial auto insurance policies offered by MPI can offer higher limits for liability insurance. This is particularly important if your vehicle is more likely to be involved in liability claims or if liability claims are likely to be of a higher cost. For example, a tank truck that crashes can cause considerably more damage than personal vehicles involved in the same type of crash. 

How Do the Costs Differ Between Commercial Auto Insurance and Personal Auto Insurance?

Typically, personal auto insurance policies cost less than commercial auto insurance—that’s because if a vehicle is being registered as a commercial vehicle, it will often carry risks that aren’t present with personal vehicles. 

There are, however, some exceptions to this rule. Fleet auto insurance coverage can cost less per vehicle than purchasing a personal auto policy for each vehicle.

Understanding whether or not you should insure your vehicle as a commercial vehicle can be challenging—so can figuring out how to pay lower insurance rates. Our insurance company can help—we’ll assess the needs of your business and help you determine the type of coverage you need. For car insurance in Winnipeg, including commercial vehicle insurance, contact us today!