Commercial Auto Insurance: Cost, Coverage & Providers

October 26, 2022

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Commercial auto insurance covers accidents involving vehicles used or owned by your business. Third-party liability coverage for injuries and property damage is mandatory in most states, but policies may also include first-party coverage, such as medical payments and collision. For small business owners, annual commercial auto insurance costs between $600 and $2,400 per vehicle.

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Any business owner who uses vehicles for work must obtain coverage. If you’re looking for affordable commercial auto insurance, check out the progressive commercial. is a trusted provider with experienced representatives who can help you save on coverage through multiple discounts. Get a free quote online easily in minutes.

Reading: How much does fleet insurance cost

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what is commercial auto insurance?

Commercial auto insurance is a policy that offers multiple coverages for both own and third-party damages. First-party coverage pays for the policyholder’s medical bills and vehicle damage, while third-party coverage pays for injuries and property damage the insured causes to someone else. Most states require liability insurance, but many business owners choose to add other coverages for added protection.

commercial auto insurance coverage

Companies involved in delivery and transportation typically use larger, heavier vehicles that typically need more coverage because they can cause more damage in an accident. they may also require additional policies. Semi-trailer truck insurance, for example, includes many of the coverage options on this list, as well as industry-specific coverages like haul trucks and haul trucks.

business auto insurance vs. personal auto insurance

Many business owners don’t realize it, but personal and commercial auto insurance are different. Personal auto policies generally exclude business-related driving, especially if business driving occurs on a regular basis. For example, a consultant who regularly drives to a client’s office probably needs a business auto policy even if her vehicle is not registered to her company and she already has personal auto insurance.

However, business owners who only occasionally drive their personal car to work may have sufficient liability coverage with their personal auto insurance. Additionally, running personal errands in company-owned vehicles may be covered by commercial auto insurance. what’s covered depends on the details of your policy, so check your coverage with an agent to make sure.

how much does commercial auto insurance cost?

Business auto insurance costs vary widely based on a number of factors, including the number of vehicles your business uses. Policies for one car generally cost less than policies for a fleet of trucks. however, most small business owners can expect to pay between $600 and $2,400 per car in annual premiums. Costs are also influenced by vehicle type, driver records, cargo, and distance traveled.

commercial vehicle insurance costs by vehicle type

Most small business owners insure a car, so the typical annual premium is $1,200 or less. however, other factors can influence the cost. for example, truck drivers face higher risk because they drive more and have more costly accidents, so owner-operators working under their own authority can pay up to $12,500 per year.

The main factors that determine commercial auto insurance costs include:

Vehicle Type: Larger, heavier vehicles generally need higher limits because they can cause more damage in an accident.
Vehicle Value: The physical damage premium is usually a percentage of the vehicle’s value, so higher value means higher premiums.
Number of vehicles and drivers: More vehicles and employees driving means greater exposure to risk, which typically requires more coverage and leads to higher premiums.
Distance traveled: Long trips, especially those that cross state lines, add to the costs of commercial auto insurance.
Coverage Types: Business owners typically choose from a list of commercial auto coverages and endorsements, each adding to the total cost.
Coverage limits: Higher limits on coverage translate to higher premiums, but also mean lower costs for business owners if they experience a claim.
Deductibles: Higher deductibles mean lower premiums, so many agents recommend selecting the highest deductible you can afford.
Cargo Type: If you’re hauling cargo, your risk and premiums are typically much lower if you’re hauling hay instead of hazardous materials.
Credit history: Insurance companies check credit scores to help determine commercial auto insurance costs, so a poor credit report can increase your premiums.
loss history: Insurance companies often lower premiums for businesses with few or no claims.

Because of the number of factors that affect commercial auto insurance costs, business owners should try to understand what factors relate to their situations and how those factors may affect their bottom line.

major commercial auto insurance companies

While financial strength is always a consideration when choosing a provider, you also want to look at the services offered by the major commercial auto insurance companies. Risk management resources and 24/7 claims processing can make your life easier. our list includes insurers that promise excellent service with quality coverage, as well as brokers that can give you access to more companies.

progressive commercial

Small business owners looking for ways to save money on their business auto insurance can benefit from getting quotes with progressive commercials. The insurer has eight discounts for qualifying policyholders, including some for combining policies, paying premiums in full and signing up for electronic payments. Business owners with a fleet of vehicles can also get a 5% discount by subscribing to Snapshot Proview, an add-on device that helps progressive marketers offer personalized car rates and fleet management assistance.

geiko

geico is a great commercial car company for rideshare and delivery drivers who want an auto insurance policy. The company developed rideshare insurance that is a hybrid of personal and business auto and provides coverage in all phases of a rideshare, including when the driver is driving to pick up or wait for a passenger. Geico can also write commercial auto insurance for a sole proprietor with a single company car or a fast-growing business with an entire fleet of vehicles and offers prompt 24/7 claims service.

commercialinsurance.net

commercialinsurance.net is a different kind of insurance company. Instead of writing policies, this company refers small business owners to the best companies, agencies, and brokers for their particular insurance needs. As the business owner, you submit your information and a representative calls you to walk you through your commercial auto insurance quotes. you are matched with the provider that best fits your business needs, and most business owners are linked with a provider in minutes.

the hartford

hartford is a great option for professionals such as consultants, architects, and engineers who need commercial auto insurance and have an excellent driving record. The company automatically includes two programs in its commercial auto premiums: Accident Forgiveness and Fender Collision Forgiveness. The former maintains the same car insurance rates as business owners after an accident if they have maintained a clean driving record for three years. Fender Collision Forgiveness coverage protects against glass claims, towing claims, and increased premiums after accidents costing less than $1,000.

portfolio

Business owners who want to compare prices should complete an application with coverwallet. As an online broker, CoverWallet sends your information to all available carriers, including major companies like Chubb and Liberty Mutual, often returning multiple quotes from a single application. If you have questions while completing your application, you can call, chat, or email an insurance advisor for help.

who needs business auto insurance?

Any business owner who uses vehicles for work must have commercial vehicle insurance coverage. this includes those who own company vehicles and those who rent, rent or borrow vehicles for work. You can even include business owners who use their personal vehicles for business purposes because those activities are generally excluded from personal auto insurance.

Some other examples of when businesses need commercial auto insurance include:

delivery drivers
rideshare drivers
general contractors
traders
catering services
food trucks

Does the law require commercial auto insurance?

Most states require business owners with vehicles to carry liability coverage, and some states also make personal injury protection and uninsured/underinsured motorist coverage mandatory. New Hampshire is the only state that does not require commercial auto insurance, but it does require drivers to pay for damage they cause while driving. Virginia has minimal car insurance requirements, but drivers may pay a fee to drive without insurance.

additional commercial vehicle insurance

Some business owners may think commercial auto insurance covers their entire operation when they need additional policies to be fully protected. For example, an auto repair shop typically needs commercial auto coverage plus specific add-ons for its towing service, such as liability coverage for customers’ cars when they’re towed or stored in the garage.

rideshare insurance

Personal auto insurance does not cover accidents that occur while driving for rideshare companies like Uber and Lyft. While most platforms offer commercial cars to their drivers, coverage is somewhat limited, especially when drivers are waiting for passengers.

In response to this coverage gap, some car insurance providers are now offering rideshare car insurance and endorsements to help drivers maintain coverage as long as their app is activated.

inland sea

Business owners who transport equipment to multiple locations need inland marine insurance. In cases of theft, commercial auto insurance generally only covers damage to the vehicle and not theft of any property inside it.

Business owners who may need inland marine insurance include:

contractors
djs
photographers and videographers
food truck operators
jewelers
farmers and ranchers

contractor equipment coverage

Commercial auto insurance does not cover moving equipment such as tractors, backhoes or forklifts. Third party claims for bodily injury and property damage arising from the operation of mobile equipment are generally covered by general liability insurance. damage to the equipment itself requires the contractor’s equipment coverage, which can be purchased as a separate policy or as a supplement to commercial property insurance.

coverage of the workshop manager

Business owners who store customer vehicles on their property may need garage attendant coverage if those vehicles are damaged by theft, vandalism, fire or extreme weather. this is optional coverage typically found in garage liability insurance.

Types of businesses that may need garage attendant liability insurance include:

auto repair shops
crane operators
auto glass installers
sound installation shops
detail operations
automatic restore

Garage liability insurance covers claims for injuries and third-party property damage when caused by garage operations. however, the policy excludes damage to customers’ vehicles while in your care, so it’s important to obtain garage insurance that includes garage attendant’s liability coverage.

hung trailer insurance

Hooked trailer insurance pays to repair or replace other people’s vehicles when they are damaged during a tow. This policy is valuable to tow truck operators, but car carriers and other truckers may need it as well.

cargo liability insurance

Cargo insurance is a type of property coverage with two main types of policies: oceanic marine, for shipments by sea, and inland marine insurance, for shipments by land. Some cargo liability insurance coverages include all modes of transportation. import/export companies, wholesalers, distributors and manufacturers probably need cargo insurance.

commercial fleet insurance

If your business owns more than one vehicle, you may need commercial fleet insurance, which covers all the vehicles your business owns under a single policy. The more vehicles and drivers your business has, the more risk you have, so a larger fleet requires additional coverage than a single vehicle.

end result

Business auto insurance is a must for any small business owner who uses a vehicle in their business. Every business that owns, rents, or borrows cars, whether it’s a sole proprietorship or a business with employees, needs at least one liability coverage. however, some business operations may require more coverage, so it’s important to work with an expert who can find a policy that fits your situation.

progressive business experts can help you find the right business auto insurance policy for your operations. work with their experienced representatives for a seamless customer experience and get a fast free quote online.