Do you have the correct insurance for your vehicle?

Do you use your vehicle for work? Are you self-employed? An employee driving to work?

If you are self-employed, you can claim a portion of your vehicle expenses as a business expense. This portion must relate to the actual kms related to business purposes. For example, if you drove 10,000 km in all of 2012, and 6,000 km was related to business, you can claim 60% of your vehicle expenses.

Keep in mind that you must choose the correct type of vehicle insurance in order to comply with both CRA requirements and those of ICBC. Using Pleasure Coverage as an example, you may only use your vehicle for a maximum of six business trips per month. If you are using your vehicle for more than this (eg. 20 trips per month), not only can your insurance coverage be compromised, but CRA may question your claim for expenses. CRA may wonder why you are claiming such a high percentage of vehicle expenses, but have chosen the lowest insurance coverage. ICBC, too, may question a claim if there is any indication that your vehicle is being used for more than six trips.

You may find that the difference in rates is not worth the risk!

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From ICBC’s website

“It is important to discuss how you will use your vehicle with your broker as they will help you determine which rate class you belong in. This is important because if you are in the wrong rate class this may result in a breach of coverage, making you personally responsible for any claims.

The most common rate classes are

  • Pleasure* — Driving for typical day to day functions
  • Commuting* — Driving to work or school
  • Business — Driving for business purposes
  • Delivery — Driving for delivery


Generally speaking, these rate classes apply to vehicles used for typical day to day functions such as driving children to or from school or some kind of an event, driving to or from a shopping centre, driving while on vacation, or similar types of uses.

  • Limited commuting, business, delivery use  —  Rate class 001

    The vehicle is used for typical day to day uses as described above. In addition, the vehicle can be used for limited commuting/business/delivery use so long as the vehicle is not used more than six (6) days in a calendar month for these uses. If used as a delivery vehicle then the vehicle must weigh 5,000 kilograms gross vehicle weight (GVW) or less.


    Generally speaking, these rate classes apply to vehicles used to drive to or from, or part way to or from, work or school. In addition, these rate classes include the uses indicated under “Pleasure Use Rate Classes”.