An expert panel on Quebec auto insurance is welcoming a recommendation to introduce four new streamlined categories for commercial vehicles in the province. The proposal is being made by the Société de l’Assurance Automobile du Québec (SAAQ), the province’s auto insurance plan. The new plan is being put forward for implementation from 2025 through 2027. Streamlining commercial auto insurance in Quebec is reflective of a 2021 recommendation made by the panel. The report contains 41 observations and recommendations. How will streamlining commercial auto insurance benefit drivers in Quebec? Will it have any effect on Ontario commercial insurance? Read on to learn more.
What is the proposed streamlining plan?
The proposal is to introduce a new four-category system for commercial vehicles. “The panel…welcomes SAAQ’s efforts to refine its method of calculating the insurance contributions for commercial vehicles so that their rates reflect the risk represented by each insured vehicle category as accurately as possible,” says the Conseil d’experts sur les contributions d’assurance automobile in a press release.
The panel’s report focuses on four main issues:
- Financing the auto insurance plan
- Funding
- Road safety
- Customer service
As it stands in Quebec currently, the commercial vehicle sector comprises 18 distinct categories for more than 1.1 million vehicles. The greatest number of these are vehicles whose plates include the prefix F. This category includes 609,000 commercial vehicles, comprised of:
- Trucks
- Pick-up trucks
- Vans up to 3,000 kilograms or less
- Driving school vehicles
- Snow blowers
- Ambulances
- Hearses
- Certain motor homes, and
- Tow trucks
In Quebec, a licence plate that starts with an “F” indicates that it is being used for commercial purposes by a company or a self-employed individual.
Therefore, the proposal will split the existing broad categories of vehicles with an F prefix into four more specific categories:
- Passenger vehicles for commercial use;
- Motor homes;
- Emergency vehicles; and
- Other commercial vehicles with an F prefix
Each new category will have a tailored insurance contribution reflecting its specific risk profile. Thus, the reclassification aims to ensure each vehicle type pays a rate proportional to the risk it presents. For example, emergency vehicles will have a 2025 insurance contribution of $121.23, increasing to $145.87 in 2026 and $148.79 in 2027. Motor homes, on the other hand, will have a contribution of $58.24 in 2025, $59.64 in 2026 and $60.83 in 2027. The reclassification means the first three categories bring together approximately 90% of the vehicles previously grouped in the F prefix plate category, the report says. The “other commercial vehicles with an F prefix” category is largely made up of “tool vehicles” used by tradespeople.
In Quebec, the government administers insurance covering minimum limits for bodily injury, while property damage coverage is provided by private insurers.
In general, the panel does not recommend changes to any insurance contributions proposed by SAAQ for 2025 to 2027. “The panel considers that the SAAQ proposal complies with the laws and regulations in effect and is fair and reasonable,” the release says. The panel reached its conclusions after reviewing the approach taken by SAAQ to determine insurance contributions, verifying the data used to support the proposed amendments, and holding a public consultation.
It is still early days since the panel’s report was reached, therefore it is difficult to foretell how streamlining commercial auto insurance in Quebec will benefit policyholders. It will also be some time before any trickle-down projections can be made for commercial auto insurance in Ontario in the future.
Commercial Auto Insurance in Ontario: Is there a connection?
Commercial auto insurance, also called commercial vehicle or business auto insurance, protects your business against liability for damages caused by accidents involving your business vehicles. It also provides certain compensation to occupants of your business vehicles who are injured in said accidents. In Canada, any vehicle used to transport clients, materials, goods, tools, or equipment generally requires commercial coverage. Commercial auto insurance adds another layer of protection to your business. Vehicles are a vital part of operations, and an accident, stolen work vehicle, or injury, can put your business at risk. This type of insurance covers cars, trucks, pickups, vans, trailers, and fleets used for work purposes. It protects your business, drivers, and your vehicles from exposure to threats.
Top things to know about Commercial Auto Insurance in Ontario
- You need commercial auto insurance if you use your vehicle for business purposes.
- Commercial auto insurance applies to all vehicle types; cars, vans, trucks, and fleets.
- Your personal auto coverage does not cover you for business activities.
Coverages Included in a Commercial Auto Policy in Ontario
- Third-party liability ($200,000 coverage minimum for any single accident)
- Accident Benefits
- Uninsured auto
- Direct Compensation-Property Damage (DCPD)
There are four optional coverages:
- All Perils: Combines the Collision or Upset and Comprehensive coverages listed below.
- Collision/Upset: Covers damage when your vehicle is involved in a collision with another object or vehicle or happens to tip over.
- Specified Perils: Covers your vehicle against loss or damage caused by certain perils, including fire, theft/attempted theft, lightning, windstorm, hail/rising water, or earthquake.
- Comprehensive: Covers your vehicle against loss or damage caused in addition to those covered by Specified Perils, as well as falling or flying objects, missiles, or vandalism.
What are the three types of Commercial Auto Insurance policies?
- Business use: For small businesses, a home-run business, or for individual entrepreneurs. Used for driving to various locations and meeting with clients. You can add “business use” to your personal auto insurance.
- Business use for multiple drivers: This provides the option to add multiple drivers to your policy. Multiple employees can utilize your vehicle and the insurance is paid by the owner.
- Commercial auto use only: Vehicles used exclusively for work purposes. Daily use with added equipment and features to a vehicle (i.e. tool bed in a truck).
There are businesses of all shapes and sizes operating in Ontario, many of which rely on mobility to continue growing their services. Providing a company car is a big step forward in your business plan. To better understand which type of commercial auto insurance coverage you may need, contact one of our isure representatives today. We’ll be happy to assist you in determining the best coverage to help protect you and your business!
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