Automotive

Yikes! Shocked that my auto usage requires commercial auto insurance!

  • Last Updated:
  • Mar 21st, 2017 9:26 pm
[OP]
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Jan 10, 2016
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cardguy wrote:
Mar 20th, 2017 3:58 pm
so...what so you pay when you go to us customs, through the commercial lanes?.. what do you pay? where?..just curious?.. also, are you an import broker? or do you have one?...just curious as to the import for business side on canada works?
I am a businessperson transporting my company's inventory using my personal vehicle. I don't have a broker nor do I need one.

Anyone can transport goods into the US across a land border if under $2,500 by taking the commercial truck lane and presenting the form I linked to in post #3 to the border official in the booth and then pay any amount due for duties/taxes using a credit card. I qualified it by saying 'land border' as some airports are not equipped to deal with that CBP Form 7533. Btw, If it's above that amount there is a different procedure/form that must be used but I don't know what it is as most of my commercial goods activity is transporting goods back to Canada. The form is pretty simple and you don't even need the HTS code for the goods. Sometimes they don't even charge me anything.

Anyone can transport commercial goods back into Canada using the commercial trucking lane by presenting the other form I linked to in post #3. You can either have that form already filled out or just tell the border official in the booth what you are transporting and then be told to park and go into the office to fill out the B3 form on the computer and then any pay amount due for duties/taxes with a credit card. I don't think there is a limit to the value of the goods and if there is I certainly have not hit it even though my goods are very high value. There is a limit to how much you can charge to a credit card coming into Canada but I can't remember how much it is (a few hundred bucks). The balance has to be paid by debit card. The critical information, other than cost of goods, etc, that you need for the B3 form is the HTS code for the goods which you can look up while doing the form on the same computer and your importer number (same as your business GST number but with a different suffix - call CRA for more info).

I hope that helps.
Last edited by JKrioo on Mar 20th, 2017 4:53 pm, edited 3 times in total.
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JKrioo wrote:
Mar 20th, 2017 3:31 pm
I've kinda thought this through as I have been doing it for the last year. It's not the 'odd box of inventory' and I have to go there anyway so there would be no point in paying a lot more than the cost of insurance and then have the loss of flexibility doing something I can more easily and efficiently do myself for lower cost. So, your solution is not a good one at all.
How do you know that shipping will cost 'a lot more than the cost of insurance'? What if the insurance is several hundred/thousand more than what you're paying for insurance now?
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good idea; however, real estate agents for example, qualify for business insurance, not commercial, as they are not transporting goods.
CNeufeld wrote:
Mar 20th, 2017 4:49 pm
The rule of thumb I was given by my broker was if you are writing off your auto expenses as a business expense, you need commercial insurance. Perhaps it's not as straightforward as that, perhaps it's different in different areas...

C
Last edited by COSMIC5 on Mar 20th, 2017 4:59 pm, edited 1 time in total.
RIBO LICENCED INSURANCE BROKER(ontario) -OVER 30 YRS OF EXPERIENCE
YOUR BEST INSURANCE IS AN INSURANCE BROKER
All the information provided is for reference purposes only. The actual wordings, conditions and exclusions of your policy will apply.
[OP]
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qaz393 wrote:
Mar 20th, 2017 4:38 pm
ooo okay. so picking up someone from an airport even if they are carrying commercial good is fine. got it.
As my insurance company explained to me, if they are commercial goods, ie for resale in your business, then no matter where you pick them up (eg. warehouse, airport, friend's place, etc) that is indeed commercial delivery and your personal auto insurance policy will not cover you if you get into an accident during transport of those goods. Of course that's if the insurance company has knowledge of it. As for picking someone up from the airport who has commercial goods if you didn't know about them I don't see how it would affect your policy. Even if you knew it seems like a grey area especially if it was not in the normal course, as Cosmics suggests and so you are most likely covered. It depends on degree. If a few packs of cards for resale fine. If you regularly pick up a friend from the airport who packs your car with boxes of cards for resale that might be a bit different. It depends degree and also on the insurance adjuster's view.
Last edited by JKrioo on Mar 20th, 2017 5:00 pm, edited 1 time in total.
[OP]
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Newmarket
CNeufeld wrote:
Mar 20th, 2017 4:49 pm
The rule of thumb I was given by my broker was if you are writing off your auto expenses as a business expense, you need commercial insurance. Perhaps it's not as straightforward as that, perhaps it's different in different areas...

C
The requirement for business insurance is not based on whether you use deduct your auto expenses for tax purposes. It is based on the purposes for which you use your auto. Your broker needs to take Insurance 101 again.
Last edited by JKrioo on Mar 20th, 2017 5:08 pm, edited 1 time in total.
[OP]
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superfresh89 wrote:
Mar 20th, 2017 4:59 pm
How do you know that shipping will cost 'a lot more than the cost of insurance'? What if the insurance is several hundred/thousand more than what you're paying for insurance now?
Because I have a quote.
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JKrioo wrote:
Mar 20th, 2017 2:41 pm
I go to the US about once a month in my little beat up car to bring back home commercial goods inventory for my little company which I then resell.

I was just getting an insurance quote for my new 2017 CR-V Touring and they asked me about business use which is about 1/3 of my driving, ie the part where I drive to the US. Then I mentioned that I occasionally bring back some inventory. They told me that I need a commercial policy and that if i get in an accident without it my insurance would be invalid because I transport commercial goods occasionally.

I had thought this was covered under business use and now am floored that I need a commercial auto insurance. Of course I'll get it as otherwise I don't have insurance but I am very surprised this is the case. I know many other people who do the same as me and don't have commercial insurance. They'll be screwed if they ever get into an accident even if they are not transporting commercial goods at the time.

Can recommend a commercial auto insurance broker?
JKrioo wrote:
Mar 20th, 2017 5:00 pm
As my insurance company explained to me, if they are commercial goods, ie for resale in your business, then no matter where you pick them up (eg. warehouse, airport, friend's place, etc) that is indeed commercial delivery and your personal auto insurance policy will not cover you if you get into an accident during transport of those goods. Of course that's if the insurance company has knowledge of it. As for picking someone up from the airport who has commercial goods if you didn't know about them I don't see how it would affect your policy. Even if you knew it seems like a grey area especially if it was not in the normal course, as Cosmics suggests and so you are most likely covered. It depends on degree. If a few packs of cards for resale fine. If you regularly pick up a friend from the airport who packs your car with boxes of cards for resale that might be a bit different. It depends degree and also on the insurance adjuster's view.
I'm an auto claims adjuster myself and if I had your file, any claim you make for contents damaged (if it's in a not-at-fault accident) will be straight-up denied. You would also have underwriting review if they want to insure a risk such as yourself (i.e. someone who claims personal use of their vehicle but is clearly using it for a percentage of commercial use). Your claim will be a lot more scrutinized as well if this comes to light.

The truth of the matter is, you need to look into the costs of commercial insurance. In a lot of cases, it's cheaper than personal insurance (obviously depending on certain factors). You can also have a personally rated-for vehicle on a commercial policy, or a vehicle thats only used for XX% of commercial use, and the rest personal/pleasure.
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Squirtle wrote:
Mar 20th, 2017 5:29 pm
I'm an auto claims adjuster myself and if I had your file, any claim you make for contents damaged (if it's in a not-at-fault accident) will be straight-up denied. You would also have underwriting review if they want to insure a risk such as yourself (i.e. someone who claims personal use of their vehicle but is clearly using it for a percentage of commercial use). Your claim will be a lot more scrutinized as well if this comes to light.

The truth of the matter is, you need to look into the costs of commercial insurance. In a lot of cases, it's cheaper than personal insurance (obviously depending on certain factors). You can also have a personally rated-for vehicle on a commercial policy, or a vehicle thats only used for XX% of commercial use, and the rest personal/pleasure.
Thanks. I have absolutely no intention of trying to get my auto covered under a personal policy given what I have found out. My concern though is not with having the contents of the car, ie my commercial goods, not covered, but the fact that if I had an at fault accident while transporting these goods on these once a month trips I do that I would be denied the liability coverage. That would amount to orders of magnitude greater cost than what I am transporting.

I am surprised, btw, that even though I have disclosed that I use my car for business that the insurance company has never once asked me what type of business use it is. One would think that if such a relatively benign activity such as transporting some commercial goods in the car and not even to a customer would render my insurance invalid that they would at least ask the very basic of questions, such as "what exactly do you do that is a business use?". However, year after year they have never once asked me to elaborate.
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JKrioo wrote:
Mar 20th, 2017 7:21 pm
Thanks. I have absolutely no intention of trying to get my auto covered under a personal policy given what I have found out. My concern though is not with having the contents of the car, ie my commercial goods, not covered, but the fact that if I had an at fault accident while transporting these goods on these once a month trips I do that I would be denied the liability coverage. That would amount to orders of magnitude greater cost than what I am transporting.

I am surprised, btw, that even though I have disclosed that I use my car for business that the insurance company has never once asked me what type of business use it is. One would think that if such a relatively benign activity such as transporting some commercial goods in the car and not even to a customer would render my insurance invalid that they would at least ask the very basic of questions, such as "what exactly do you do that is a business use?". However, year after year they have never once asked me to elaborate.
First, using your vehicle for business use and commercial use are two different things. A realtor may use their vehicle for business use i.e. driving clients around to house viewings in their car, whereas a parts delivery vehicle may be transporting expensive components from job site to job site, or a taxi driver may be transporting paying passengers. Each of these scenarios have different risks to it, and not all insurers will have a risk appetite for all 3 scenarios.

Second, your liability portion of your policy won't be denied - this will still be in place if you were to meet in an accident. Your physical damages portion of your claim (assuming you were involved in a loss covered under the 'Collision' part of your policy) may be denied. The only time I can see an insurer denying liability is if your policy were to be cancelled ab initio, which is where they backdate your coverages, reimburse your premiums, and say "you're on your own" for the loss. This is if you straight-up lie to your insurance company - for example, you sign up with Aviva for a personal policy, but you secretly run a rental agency with those personally insured vehicles. This is because you broke the "element of good faith" in the insurance contract when you knowingly lied on your application for insurance.

If they were to cancel your policy because of a material change in risk, the claims department and underwriting would need to prove the risk (you as a driver, and your use of the vehicle) has irrefutably changed since the inception or renewal of your policy. These types of cancellations are typically issued after a loss is incurred (and a claims investigation has resulted in new information, and by that extent, coverages provided), so you will still have Liability insurance in place. For an insurance company to get 'off-risk', it's actually very difficult. Even criminals, drug-dealers, and the mafia need to purchase auto insurance at the end of the day.
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willdacanucker wrote:
Mar 20th, 2017 3:46 pm
You being serious with this snarky and totally uncalled for comment? YOU came on here looking for advice. YOU asked. No one here knows whatever your business is nor the intricacies of whatever it is you are doing. Afaic, you are a snobby and arrogant person looking to sidestep proper protocol and looking for justification doing it. So if a provided solution is not good enough for you, instead of making snarky comments, stfu and figure the issue out on your own. /thread
Lol. Obviously you didn't even read OP's post.

Yeah, he asked a question. The only question he asked is can anyone recommend a commercial insurance broker.

Didn't ask for anyone to solutionize his process. He runs his business however he likes. He didn't ask questions about how to handle the logistics of it.

So get off your high horse.
[OP]
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Squirtle wrote:
Mar 20th, 2017 9:23 pm
First, using your vehicle for business use and commercial use are two different things. A realtor may use their vehicle for business use i.e. driving clients around to house viewings in their car, whereas a parts delivery vehicle may be transporting expensive components from job site to job site, or a taxi driver may be transporting paying passengers. Each of these scenarios have different risks to it, and not all insurers will have a risk appetite for all 3 scenarios.

Second, your liability portion of your policy won't be denied - this will still be in place if you were to meet in an accident. Your physical damages portion of your claim (assuming you were involved in a loss covered under the 'Collision' part of your policy) may be denied. The only time I can see an insurer denying liability is if your policy were to be cancelled ab initio, which is where they backdate your coverages, reimburse your premiums, and say "you're on your own" for the loss. This is if you straight-up lie to your insurance company - for example, you sign up with Aviva for a personal policy, but you secretly run a rental agency with those personally insured vehicles. This is because you broke the "element of good faith" in the insurance contract when you knowingly lied on your application for insurance.

If they were to cancel your policy because of a material change in risk, the claims department and underwriting would need to prove the risk (you as a driver, and your use of the vehicle) has irrefutably changed since the inception or renewal of your policy. These types of cancellations are typically issued after a loss is incurred (and a claims investigation has resulted in new information, and by that extent, coverages provided), so you will still have Liability insurance in place. For an insurance company to get 'off-risk', it's actually very difficult. Even criminals, drug-dealers, and the mafia need to purchase auto insurance at the end of the day.
Thanks for that very detailed explanation. I appreciate it.

The one glaring difference between what you have said and what my insurance company said is that they said that I would be denied liability coverage if I was in an at fault accident simply because I happened to be transporting commercial goods in my car at the time, regardless of whether this transport of such goods only happened once a month or so (which happens to be the case). They said this would be the case even if I answered their questions truthfully at the time I applied for my policy (which I did) and had never talked to them today about this issue but simply had the commercial goods in my car and gotten into an at fault accident. That really surprised me.

I guess the question then is if an insurance company asks me, during an application for car insurance, what my business mileage is per year, which is the only question I have ever been asked about business use, and I answer truthfully (which of course I would) that it is 1/3rd of my driving, ie 5,000km/yr, and they ask no further questions which they never do, then if I did transport commercial goods in the car and got into an at fault accident it seems they could not deny me liability as I answered their questions truthfully, correct? From what you are saying they might later cancel the policy which is always their perogative if they realize I had commercial goods in the car at the time and they deem that to be too high a risk but they could not cancel it ab initio simply for this reason. I know so many people who do what I do and to my knowledge none of them have commercial auto insurance policies.

Am I correct?
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JKrioo wrote:
Mar 20th, 2017 10:11 pm
Thanks for that very detailed explanation. I appreciate it.

The one glaring difference between what you have said and what my insurance company said is that they said that I would be denied liability coverage if I was in an at fault accident simply because I happened to be transporting commercial goods in my car at the time, regardless of whether this transport of such goods only happened once a month or so (which happens to be the case). They said this would be the case even if I answered their questions truthfully at the time I applied for my policy (which I did) and had never talked to them today about this issue but simply had the commercial goods in my car and gotten into an at fault accident. That really surprised me.

I guess the question then is if an insurance company asks me, during an application for car insurance, what my business mileage is per year, which is the only question I have ever been asked about business use, and I answer truthfully (which of course I would) that it is 1/3rd of my driving, ie 5,000km/yr, and they ask no further questions which they never do, then if I did transport commercial goods in the car and got into an at fault accident it seems they could not deny me liability as I answered their questions truthfully, correct? From what you are saying they might later cancel the policy which is always their perogative if they realize I had commercial goods in the car at the time and they deem that to be too high a risk but they could not cancel it ab initio simply for this reason. I know so many people who do what I do and to my knowledge none of them have commercial auto insurance policies.

Am I correct?
You need to consider what exactly are you transporting... moving combustible gases and flammable materials will result in a greater fight by your insurer to deny liability than (just using this as an example) you driving over every month to buy a few bags of spicy cheetos and a case or two of cherry coke for your convenience store. Denying liability outright is largely an uphill fight for the insurer; they would more than likely lose in a court case.

How big of a discrepancy are we talking about here? An example of a big discrepancy is an 18-wheeler long-hauler with your "business use" vehicle on a personal policy - no court will ever side with you (the insured) over your insurer in that example lol

The insurer may choose to respond with minimum required liability limits instead - your policy for $2 million liability coverages was contingent on you truthfully disclosing your driving purposes to the insurer. Because you violated that, you may not have $2M in liability coverages that you opted for; you will get $200,000.00 in coverages instead which is the minimum required amounts.

You need to be able to prove you told your insurer you use it for "business purposes" and for however many KMs (especially if you have U.S. exposure). Make sure you have some documentation showing this. You may want to look into getting a broker to assess your commercial risk so you can get the necessary insurance.
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OP asks a simple question and then the pitchforks come out. Typical RFD. Contact Cosmos

/Thread
[OP]
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willdacanucker wrote:
Mar 21st, 2017 7:36 am
Well o/p decided to edit his comment before you posted/read the original. Classic trolling technique.
Yes, to correct a spelling error and grammar at 6:41 pm

But that doesn't even matter as your response was to that post over an hour later at 7:46pm so it is obviously you who are the troll.
Last edited by JKrioo on Mar 21st, 2017 8:14 am, edited 4 times in total.
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Squirtle wrote:
Mar 21st, 2017 1:13 am
You need to consider what exactly are you transporting... moving combustible gases and flammable materials will result in a greater fight by your insurer to deny liability than (just using this as an example) you driving over every month to buy a few bags of spicy cheetos and a case or two of cherry coke for your convenience store. Denying liability outright is largely an uphill fight for the insurer; they would more than likely lose in a court case.

How big of a discrepancy are we talking about here? An example of a big discrepancy is an 18-wheeler long-hauler with your "business use" vehicle on a personal policy - no court will ever side with you (the insured) over your insurer in that example lol
About once every month or so I transport in my personal vehicle 4-5 boxes, each 1.5 ft cubed, that contain a battery operated household consumer product and occasionally a few parts for those products packed in the same box. No liquids, flammable or otherwise or any hazardous materials.
Squirtle wrote:
Mar 21st, 2017 1:13 am
The insurer may choose to respond with minimum required liability limits instead - your policy for $2 million liability coverages was contingent on you truthfully disclosing your driving purposes to the insurer. Because you violated that, you may not have $2M in liability coverages that you opted for; you will get $200,000.00 in coverages instead which is the minimum required amounts.
How would I have violated that if I had answered the questions truthfully which I did when I received my insurance policy, ie the one I have now and the one I have had in previous years? They asked me about my business mileage and I disclosed it. They did not ask me any other questions. In fact they only ever asked the first time I received the policy about 5 years ago. After that all I ever received was renewal slips in the mail in response to which I made my annual payment. Now they are saying that if I had been in an accident with those boxes in my car and in an at-fault accident that they would have denied my liability coverage. The only reason that discussion ever came up is because I asked for a quote for the new car I will be picking up in a couple weeks and after they asked about business usage I answered as I have in the past and then later in the discussion I volunteered that I transported a few boxes for my business about once a month. When I have looked for competitive quotes in the past I have been asked the exact same question and absolutely nothing else, ie "What mileage per year would this car be used for business?" to which I answer truthfully. No one has ever asked the nature of the business use which is the reason I am so surprised that this benign activity of transporting a few boxes of commercial goods once a month or so could make my insurance invalid. However, from what you said before it appears they would not be successful in denying coverage as I answered all the questions they asked truthfully, correct?
Squirtle wrote:
Mar 21st, 2017 1:13 am
You need to be able to prove you told your insurer you use it for "business purposes" and for however many KMs (especially if you have U.S. exposure). Make sure you have some documentation showing this. You may want to look into getting a broker to assess your commercial risk so you can get the necessary insurance.
I don't know how I prove that as they always just ask verbally and I reply honestly at about 5,000km/yr of the 15,000km/yr I drive. I do have documentation showing my business use.

This may all be moot considering the fact that commercial insurance might not be too far off the cost of personal. I just find it unbelievable that my insurance company claims that I would have have been denied liability coverage in an at-fault accident before my conversation with them yesterday even though I had previously always answered their question about business use honestly.

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