At the beginning of 2022, the Government of Alberta implemented changes brought in through Bill 41: Insurance (Enhancing Driver Affordability and Care) Amendment Act, 2020 called the direct compensation for property damage (DCPD) system. Supported by the Insurance Bureau of Canada, DCPD is said to be a more fair way of settling car insurance claims as it tightens up the process substantially. In a DCPD system, regardless of who is at-fault for an accident, the payment for damage is provided directly from your own insurer. Compensation for injuries or additional damages are still pursued through the other driver’s insurer. The IBC explains that DCPD helps reduce the overall cost of insurance by removing several slow and expensive steps from the car insurance claims process. Approximately 42% of individual car owners in Alberta should receive a reduction in their car insurance payments under DCPD, and indeed many of those who have already gone through their car insurance renewal process have seen their rates go down.
Some owners of commercial auto insurance policies are not seeing the same benefits, however. According to Insurance Business Magazine, owners of fleet vehicles are reporting the cost of their deductibles skyrocketing to points of unaffordability. Because of the huge increase in their deductibles, fleet owners are now trying to avoid filing a claim at all. Car rental companies are sounding the alarm that they are no longer able to go after an at-fault driver’s car insurance company should one of their vehicles be damaged, leaving them completely on the hook for all repairs to their vehicles, even if the driver had not made any kind of error. The Checker Cab company has also voiced their concerns, saying that their company reports approximately 360 collisions each year – often more than that – and that the company is facing a $2 million hit this year.
“It has taken the right for us, which we used to do, to segregate against a third party that hit our vehicle,” says Calgary Checker Cabs president Kurt Enders. “If a car was written off, we had all these abilities to reclaim our losses, and now that is borne 100% by us.”
Commercial auto insurance policy holders are currently in talks with the Alberta government to help improve the process. There is hope that eventually fleet owners may have the option to opt out of DCPD. In the meantime, there are some things fleet owners can do to help lower their commercial auto insurance rates.
Ways to lower your commercial auto insurance rates
Telematics (or usage-based insurance (UBI)) is available for fleet owners in Alberta and is a way to help lower the costs of your commercial auto insurance coverage. The technology uses devices to collect and analyze advanced data regarding each fleet vehicle’s usage. Telematics tracks driving habits such as speed, cornering, braking force and frequency, which are all key indicators of how operators are handling your vehicles. In the case of a car rental company, telematics can even be used to warn drivers that they are operating a vehicle in an unsafe manner and that their rental privileges could be revoked should the behaviour continue.
Other ways to lower your commercial auto insurance rates include:
- Consistently training operators in defensive driving tactics. The fewer driving infractions that are racked up, the better an insurance pool you will be placed in, which translates to lower costs. If you are able to show your commercial auto insurance provider that training and good driving habits are a priority for your business, your insurance company has reason to believe you pose a lower level of risk. You may then earn a lower price on the coverage you’re looking for.
- Investigate discounts for multiple policyholders. This is a proven strategy for enjoying lower insurance rates. If you have multiple policies through the same company, you may qualify for an insurance discount of as much as 20 per cent. If you’ve arranged your business insurance through a provider and you’re happy with that company’s rates and services, consider switching your commercial vehicle coverage to the same company, if they offer it. This will likely lead directly to a significant discount on your Calgary commercial auto insurance.
- Adjust limits. Lowering your maximum coverage limit will both reduce your overall monthly or annual rates, but does sacrifice some of your safety net. Making a choice like this should not be done without the advice of an experienced insurance broker such as us at Lane’s. We can help you perform calculations to make sure that even a “worst-case scenario” event won’t put the overall financial health of your business in jeopardy.
Work with an insurance broker for the best commercial auto insurance rates
When you get your commercial auto insurance coverage through a broker, you stand a much better chance of getting competitive rates. Dealing directly with an insurance company puts you at a disadvantage, as they are only able to offer the policies available to them. Brokers are able to shop several providers on your behalf to find the best coverage for your needs.
Lane’s Insurance is a leading Alberta-based brokerage, providing value-added service, friendly advice, and access to the lowest possible rates. If you have any questions or concerns about your commercial vehicle coverage, or if you would like to review your current policy to see if you qualify for a better rate, contact a Lane’s Insurance representative.
