Are you a delivery driver who knows the ins and outs of delivering packages on time and with care? Then you also know that your delivery vehicle is the backbone of your business. It’s your trusty sidekick that helps you conquer your daily routes and satisfy your customers. But here’s the catch: did you know that relying on private car insurance won’t cut it when you’re using your vehicle for work purposes? You need to upgrade to commercial car insurance to protect yourself and your precious cargo.

But what is commercial car insurance? And how do you navigate the best insurance for you?

What is commercial car insurance?

Insurance companies understand that driving for personal reasons like running errands or dropping off kids at school poses different risks than driving for work as a delivery driver – so they offer separate policies for these two types of driving. It’s important for delivery drivers to understand that relying solely on personal car insurance leaves them vulnerable and they may end up footing the bill in case of an accident.

Commercial car insurance goes by various names such as commercial motor vehicle insurance, business vehicle insurance, commercial auto insurance, or business car insurance. But the bottom line is that it provides the protection delivery drivers need to operate their vehicles for work purposes.

Different types of commercial car insurance

Similar to personal car insurance, commercial car insurance also has different policy types available to meet specific needs. If you’re wondering what commercial car insurance entails, here are some policy types to consider:

Third Party Property Damage (TPPD)

This policy is to cover accidental damage that you may cause to other people’s property or vehicles while operating your vehicle at work.

Third Party Property Damage Fire & Theft (TPFT)

This policy covers property damage to a third party in the same way that TPPD does but adds some additional protection for your vehicle. In this policy, if your vehicle is stolen or damaged by fire you will be covered, including for the cost of replacement if the vehicle is a total loss. Fire and theft can result in the permanent and total loss of your valuable vehicle so it makes sense to include that protection.

Comprehensive insurance

This type gives you the fullest and greatest protection. It includes the third party cover of the above two policies and adds cover for damage to your own vehicle. If your vehicle is accidentally damaged due to a collision or another incident you will receive payment to cover the cost of repairs according to the details of your policy. This policy makes the most sense for delivery drivers because your vehicle is central to your business. If your vehicle is damaged or off the road it can impede or stop your work, not to mention the negative financial impact expensive repairs can have on your business.

Optional inclusions

Delivery drivers should be aware of some optional inclusions to their insurance policies which may be helpful. Vehicle content insurance can protect you from loss of valuables contained inside your vehicle. The cost of a hire vehicle can be included to keep you on the road if your normal vehicle is out of action temporarily. Roadside assistance and towing can also be included.

How to determine the right coverage for your delivery business

The difficult thing about car insurance is the unpredictability of damage or breakdowns in your future. Accidents and breakdowns can occur at any time in quick succession… or they may not occur for years. The most important thing for your business is to prevent an incident from becoming a significant financial burden on your business. Insurance ensures that you can continue to work and draw your income and that the cost of an event doesn’t significantly affect your cashflow or bottom line.

It is not just cars and vans that are insured in commercial vehicle insurance, but all types of delivery vehicles and trailers including trucks, towed equipment, motorbike, and more. Make sure that all your vehicles, tools, trailers and towed equipment are covered.

Maintaining and updating insurance

As your business grows and evolves, make sure that new vehicles you bring in are insured straight away and that vehicles that you no longer use have their insurance cancelled. Regularly review whether the terms of the policies that you have are still relevant to the work you do and the risks that you face. Also regularly compare your insurance costs with that of other insurers to make sure you are still getting the best deal.

Use an insurance broker

The last point in this guide to commercial car insurance is one of the most vital. In order to get the best from commercial vehicle insurance it is important to utilise a good insurance broker. An insurance broker is an expert in insurance and works on your behalf to understand your business insurance needs and scours the market to match you with the right policies. Your broker also helps you by giving you expert advice on any insurance questions you might have, by lodging claims and liaising with the insurance company on your behalf and by regularly reviewing your insurance to make sure it is still the best for you.

GSK Insurance Brokers in Perth have been helping businesses get their insurance sorted for over 40 years. We can tailor-make insurance packages that are just right for your business no matter what you do. For great insurance for couriers that meets your needs, whether commercial vehicle insurance or courier insurance in Perth contact us today!

January 29, 2023

By Graham Knight

Founder and Managing Director of GSK Insurance (established in 1981). Graham draws upon more than 50 years’ experience in the insurance industry, working in both insurance and broking across various private, public and government sectors in Australia.

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