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Commercial Auto Insurance
Commercial Auto Insurance
Commercial auto insurance covers legal bills, medical expenses, and property damage if a business vehicle is involved in an accident.
Why is commercial auto insurance important for small businesses?
If your company owns a car or any other type of road vehicle, you will very likely need commercial auto insurance. Almost every state requires commercial auto insurance coverage for business-owned vehicles, with mandatory liability limits for damage coverage.
New Hampshire is the only state where auto insurance isn’t required. However, drivers are still financially responsible for any damages they cause.
You can rely on commercial auto insurance for financial protection if you or an employee needs medical care or faces legal expenses due to an automobile accident. If you don’t carry commercial vehicle insurance, your business will be responsible for any medical bills and legal fees, which can get expensive.
Even when business auto insurance coverage isn’t required, it’s still a smart choice. Without it, you could end up paying thousands of dollars in medical bills and other costs.
Businesses that purchase commercial auto insurance often:
- Have a vehicle titled to their business
- Drive to and from worksites
- Carry tools, equipment, or products used for work
- Transport clients or employees
- Rely on delivery drivers or couriers
What does commercial auto insurance cover?
Commercial auto insurance helps cover medical payments and property damage related to an accident. This coverage includes legal expenses if you’re sued. A policy may also cover vehicle theft, vandalism, and other losses and damages.
Specifically, commercial auto insurance coverage includes:
Auto accident liability
Commercial auto insurance includes property damage liability coverage that helps pay for damages in an accident you caused. That could include:
- Repair costs for the other person’s damaged vehicle or property
- Legal expenses if you’re sued over the other driver’s injuries
Medical payments
Commercial auto insurance policies that include medical payments, or bodily injury liability, coverage can pay for:
- Your medical expenses for bodily injuries from a car accident
- Medical expenses for passengers in your vehicle
This coverage is available regardless of who caused the accident.
Physical damage and collision
Commercial automobile insurance protects against vehicle theft and physical damage, as well as provides comprehensive coverage for non-collision damages, such as:
- Vandalism
- Fire and certain weather events
- Impact with another object
Accidents involving uninsured motorists
About one in eight drivers in the United States are uninsured, according to the Insurance Information Institute (III). When they cause accidents, the uninsured or underinsured might not be able to pay for damages.
Your policy’s uninsured motorist coverage makes sure your business doesn’t have to pay for the resulting medical expenses or vehicle repairs.
How much does commercial auto insurance cost?
Commercial auto insurance costs an average of $147 per month. 37% of Insureon small business customers pay less than $100 per month for their policies.
Your cost is calculated based on a number of factors, including:
- Number of vehicles
- Type of vehicle and value
- Level of risk involved
- Claims history
- Employee driving records
- Policy deductible and limits
Who needs commercial auto insurance?
Commercial auto insurance benefits a variety of industries that utilize business vehicles, including cars, trucks, SUVs, and more. It is designed for both businesses and independent contractors who need a company vehicle in order to operate their business.
However, there are a few specific professions that need commercial auto coverage options more often than others. Consider the following industries and examples:
Construction and installation
An HVAC installation employee rear-ends a sports car while driving your construction or installation business’s truck. The accident is the employee’s fault.
Your business’s commercial auto insurance policy can cover the cost of repairing the sports car. It can also cover the other driver’s medical expenses for injuries sustained in the crash.
Consulting
A consultant at your IT consulting company is driving to a client’s home when another driver runs a stop sign and hits your company car. The other driver accidentally let his insurance policy lapse and is not insured.
Your company car policy can pay for the damage to your car caused by the uninsured driver.
Cleaning
A janitor gets into an accident while driving a cleaning company’s van to a client’s office. No one is seriously injured, but the janitor is brought by ambulance to a local hospital and given X-rays.
The cleaning company’s commercial auto insurance policy pays for the ambulance ride and medical treatment.
Landscaping
A tree uprooted by a windstorm falls on a lawn care company’s truck and breaks the windshield. The lawn care business’s commercial auto insurance policy pays for a replacement windshield.
Top professions that need commercial auto insurance
How to get commercial auto insurance
Complete our easy online insurance application to get free quotes. Insureon’s expert insurance agents can help you choose the best commercial auto coverage that meets the needs and budget of your small business.
Your business can acquire business vehicle insurance through a standalone policy, or have it added as an endorsement to a commercial package policy.
From California to New York and everywhere in between, learn more about how to get commercial auto coverage for your business.
What does commercial auto insurance not cover?
Personal or leased vehicles
Commercial auto insurance does not cover leased or personal vehicles used for business purposes. However, your business can still be held accountable if an employee gets into an accident in a personal or leased vehicle.
Hired and non-owned auto (HNOA) insurance is the appropriate policy for vehicles that your business uses but does not own. This policy will provide protection for employees who drive their own or leased cars for work purposes, such as traveling to and from job sites.
In addition, lease gap insurance is an endorsement you can add to your commercial auto policy that covers the total loss of a leased or financed vehicle.
Another endorsement to consider is drive other car insurance, which covers non-owned vehicles that employees or executives may rent or borrow.
Recently purchased vehicles
If you purchase a business vehicle and it’s not yet covered by your commercial auto insurance policy, you would be responsible for any liabilities that may occur to the vehicle.
In order to protect any recently purchased business vehicles, you should get any auto liability insurance, which offers a temporary extension of your commercial auto coverage. It can also cover any hired and non-owned vehicles that you use for your business.
Customers’ vehicles
If your business is storing or performing service on a customer’s vehicle, it would be not covered under your commercial auto insurance. If something were to happen to your customer’s vehicle, such as damage from a break in, you would be responsible for repair and other related expenses.
Garage keepers liability coverage would insure your customer automobiles while it is in your care, custody and control.
Garage business risks
If you have a garage-based or auto service business, your commercial auto insurance policy does not protect against common garage operation risks, such as a customer slipping and falling on leaked motor oil.
Garage liability insurance is a type of general liability insurance that covers the many risks associated with automotive business operations. This includes customer injuries and legal costs from lawsuits.
FAQs about commercial auto insurance
Review answers for frequently asked questions about commercial auto insurance
What is the difference between commercial car insurance and personal car insurance?
While both policies offer personal injury protection, commercial auto insurance policies are designed for company cars that cover a lot of ground. Policies typically have higher coverage limits to account for the increased risk.
Personal auto insurance policies only cover claims related to personal use, including your commute and travel unrelated to work. They have lower limits and usually cost less.
If you’re involved in an accident while driving your personal car for work, your insurance company might refuse your claim. That’s why independent contractors or sole proprietors who own a car used for work should consider commercial auto insurance or HNOA.
If you’re uncertain which policy you need, check with an insurance agent.
What’s the difference between collision coverage and comprehensive coverage?
Collision coverage pays for damage to your vehicles from accidents involving objects, such as a telephone pole. Comprehensive coverage is for damage caused by something other than a collision, such as fire, natural disasters, falling tree limbs, or hitting an animal.
Your policy may have different coverage amounts for collision and comprehensive.
Where can I learn more about commercial auto insurance?
If you want to learn more about this type of business policy, you can find additional answers in our frequently asked questions about commercial auto insurance.
If you have any additional questions about auto coverage or other small business insurance options, you can also contact an Insureon agent and get a free commercial auto insurance quote.
Commercial auto insurance cost
The cost of commercial auto insurance coverage varies based on a number of factors about your business. Your premium is directly impacted by the number of vehicles your business owns, their value, their business use, and more.
What is the average cost of commercial auto insurance?
Small businesses pay an average premium of $147 per month, or $1,762 annually, for commercial auto insurance, also known as commercial car insurance.
Our figures are sourced from the median cost of policies purchased by Insureon customers from leading insurance providers. The median offers a better estimate of what your business is likely to pay because it excludes outlier high and low premiums.
Typical commercial auto insurance costs for Swift Insurance customers
Among Swift’s small business customers, 37% pay less than $100 per month for commercial auto insurance and 26% pay between $100 and $200 per month.
The cost varies for small businesses depending on how many work vehicles they own and the type of insurance coverage they choose.
Understanding commercial auto insurance rates and cost factors
Like your personal auto insurance policy, your business insurance company calculates your commercial vehicle insurance premiums based on a number of factors, including:
- Your coverage limits and deductible
- The type of coverage you choose
- Your industry risks
- The number of vehicles you own
- The type of vehicles, such as cars, buses, box trucks, or limos
- How often your business vehicles are driven
- You and your employees’ driving records
- Claims history
How do policy limits affect the cost of business auto insurance?
If you want car insurance that pays for a wide range of damage, you need to choose higher per-occurrence limits and aggregate limits on your policy. Higher coverage limits cost more than basic coverage.
When choosing limits, make sure you’re meeting your state’s requirements for auto insurance. Most states require commercial auto insurance for businesses that own vehicles. You’ll likely need a certain amount of property damage liability and personal injury protection. These cover the damage your vehicles may cause to other vehicles, property, and individuals.
Let’s say an auto policy has $1 million / $2 million liability insurance limits. That means:
- $1 million per-occurrence limit. While the policy is active, the insurer will pay up to $1 million to cover any single accident.
$2 million aggregate limit. During the lifetime of the policy (usually one year), the insurer will pay up to $2 million to cover insurance claims.
When buying a policy, you can choose a higher deductible to save money on your premium. However, make sure the deductible is something you can easily afford. If you can’t pay the deductible, your insurance won’t activate to cover your claim.
The right amount of coverage depends on your business needs. You want liability limits that’ll cover a potential auto accident, without buying more than you need. Chat with a licensed insurance agent if you’re unsure which limits are right for your business. They can also help you find ways to get affordable commercial auto insurance.
How does the type of commercial auto coverage affect your premium?
The type of auto coverage you buy has a big impact on your commercial auto insurance costs. You can choose auto liability only, or comprehensive coverage and other types of physical damage coverage.
Auto liability coverage is required by law in most states and protects you if you or your employees are to blame for an accident in your commercial vehicle. Auto liability is your lowest cost option, and provides limited coverage to help pay for:
- Physical damage to other vehicles or property
- Medical expenses from bodily injuries to another party
If you opt for comprehensive auto insurance, your coverage will increase – but so will your insurance rates. In addition to what’s covered under auto liability coverage, comprehensive commercial auto insurance covers theft and damage due to weather, vandalism, or fire.
Additional endorsements like uninsured motorist coverage, medical payments coverage, or collision coverage can further increase your premium. For an accurate auto insurance quote, make sure to provide details about your insurance needs.
You can also opt for hired and non-owned auto insurance (HNOA) if you drive a leased, rented, or personal vehicle for business purposes. Because it doesn’t cover damage to your own vehicle, you can expect to pay a little less for HNOA coverage.
HNOA is important because although your personal auto insurance will cover your work commute, it likely has exclusions for work-related mishaps such as errands you make as part of your job.
How does your industry affect the cost of commercial auto insurance?
Your type of business also affects how much you will pay for a commercial auto insurance policy, along with your vehicle use. For example, a food truck filled with valuable equipment or a tow truck that’s always on the road will likely have higher rates. So might construction vehicles, like dump trucks, that frequent dangerous job sites.
However, keep in mind that the number of vehicles and their value has a bigger effect on your premium than your industry.
Top industries we insure
Why do small businesses choose Swift Insurance?
Once you find the right policies for your small business, you can begin coverage in less than 24 hours and get a certificate of insurance for your small business.
Cheap commercial auto insurance
Commercial auto insurance is required in most states for small businesses that have company-owned vehicles. However, it can get costly depending on your risk factors, such as your driving history. Learn how you can pay less for auto insurance and still get the protection your business needs.
How do I find cheap commercial vehicle insurance?
Commercial auto insurance is a must-have coverage for any small business that owns or operates company vehicles. Whether your business relies on a vehicle like a food truck, requires you to transport equipment to multiple locations like a landscaping business, or has a fleet of tractor trailers, your drivers face risks every time they hit the road.
There are many ways for you to keep commercial auto insurance costs low. For example, you can compare rates from different insurance companies, such as through Insureon’s easy online application that retrieves quotes from trusted carriers.
In addition, knowing your state’s liability coverage requirements, choosing cost-saving options on your commercial auto insurance coverage, and managing your risks to avoid insurance claims can also help you pay less.
1. Know your state's auto insurance requirements
Each state regulates commercial auto insurance differently, so it’s important to know the requirements for your location.
Every state, except New Hampshire and Virginia, requires commercial auto insurance coverage for business vehicles. Additionally, all states require you to prove your ability to compensate someone if you or an employee is at fault in an accident.
In addition, depending on the state you operate in, personal injury protection (PIP) insurance may be required. This coverage can often be added your commercial auto policy.
In most cases, if you use a personal vehicle for business purposes outside a commute, a personal auto insurance policy won’t cover you in the event of a work-related accident.
2. Shop around and compare insurance quotes
Insurance carriers often offer different types of coverage options with a wide range of prices. And while you could reach out to each auto insurance company directly to ask for quotes on their business auto insurance policies, there’s an easier, faster way.
You can work with a digital insurance agency—like Insureon—to get commercial auto quotes from top-rated providers, such as The Hartford and Chubb, with a single online application.
Swift’s licensed insurance agents are available to help you customize a policy for your business’s unique needs, making sure you meet state laws and your profession’s requirements.
Plus, an experienced agent can help you set appropriate limits and let you know which add-ons you can safely skip. Without expert help, you might not know if the policy provides too much coverage, or not enough.
Once you select the commercial auto insurance policy you need, you can get coverage and a certificate of insurance (COI) in less than 24 hours.
How much does commercial auto insurance cost?
The average cost of commercial auto insurance for Insureon’s customers is $147 per month.
Commercial auto insurance premiums are calculated based on several factors, including:
- Number of vehicles
- Type of vehicles (SUVs, pickup trucks, etc.)
- Business use
- Level of risk involved
- Claims history
- Employee driving records
- Deductible and coverage limits
3. Manage your risks and maintain a clean record
Your driving history is one of the biggest factors that impacts the cost of your commercial auto insurance premium. Even a tiny infraction can significantly increase your rate. By keeping a clean driving record for you and your employees, your insurance rates can remain at an affordable price.
Beyond an accident-free driving record, maintaining your business cars helps manage the risks you or your employees face when operating the vehicle. Staying on top of the maintenance and service schedules, as well as properly cleaning them, will provide a safer work area for vehicle operators.
Additionally, make sure to share tips for safe driving with your employees, such as avoiding calls and texts while on the road.
4. Customize your auto policy
Another way to save on your commercial auto premium is by choosing less expensive policy options.
Here are a few areas you can adjust to save money:
- Choose lower policy limits. Lower per-occurrence limits and aggregate limits cost less. Keep in mind they also provide less coverage in an accident, since your insurer will cover costs up to your liability limits.
- Choose a higher deductible. Higher deductibles cost less, but make sure it’s an amount you can easily afford. If you get into an accident, you’ll have to pay the deductible before you can benefit from having insurance.
- Avoid unnecessary policy options. You can save money by opting out of pricier options, such as comprehensive coverage that pays for vehicle damage from any source.
What coverage does commercial auto insurance provide?
Commercial auto insurance typically provides financial protection from medical payments, property damage costs, or legal fees due to an automobile accident. You can also get coverage for vehicle theft, vandalism, and other damages.
Depending on the options you choose, your policy may cover:
- Auto liability: This helps pay for damages in an accident you caused, including vehicle repair costs and legal expenses if you’re sued over the other driver’s injuries.
- Medical payments coverage: Your policy would pay for medical bills for you and any passengers in your company vehicle, regardless of who caused the accident.
- Physical damage coverage: Collision coverage protects covered vehicles against damage from a physical contact with another vehicle or object, such as an animal or fence. And comprehensive coverage insures against damage caused by something other than a collision, like fire or theft.
- Uninsured motorist coverage: This makes sure your business doesn’t have to pay for medical expenses or vehicle repairs from an accident involving an uninsured driver.
Cheapest industries to purchase commercial auto insurance
In addition to your location, your industry can affect how much you pay for commercial auto insurance. Generally speaking, industries that use their business vehicles frequently or travel to dangerous job sites can expect to pay a higher premium.
For example, an HVAC installer who carries valuable inventory in their truck or a construction company that travels to dangerous work areas will likely pay more for their commercial auto insurance coverage than a graphic designer who works from a home office.
Among Insureon customers, industries such as auto services, media and advertising, and wholesalers tend to pay less compared to more on-the-road industries like landscaping and installation professionals.
Here’s a look at commercial auto insurance costs for different types of business professions:
What doesn't commercial auto insurance cover?
Commercial auto coverage protects vehicles owned by your business, but it does not provide complete auto protection.
For instance, some exclusions include:
Personal, rented, or leased vehicles
Hired and non-owned auto insurance (HNOA) is the appropriate policy for vehicles your business uses but doesn’t own. This includes leased, rented, and personal vehicles.
Customer vehicles
If your business is storing, transporting, or performing service on a customer’s motor vehicle, like a towing company or repair shop, it would not be covered under your commercial auto insurance.
In this case, you should consider garage liability insurance to insure customer vehicles while they’re in your care, custody and control.
Delivery or transport services
If you run a courier, delivery, or transport service, you need to make sure you’re financially protected beyond your personal use car insurance, which most likely doesn’t include food delivery or rideshare coverage.
What other types of liability coverage should you consider?
While commercial car insurance helps cover your company-owned vehicles, you’ll likely need other types of insurance to fully protect your business.
You may also need the following small business insurance policies:
General liability insurance: This covers common business risks like customer bodily injuries, damage to a customer’s property, and advertising injuries.
Business owner’s policy (BOP): A business owner’s policy bundles general liability insurance with commercial property insurance to protect against liability claims and property damage. It generally costs less than buying these two policies separately.
Professional liability insurance: Also known as errors and omissions insurance (E&O), this policy covers the cost of client lawsuits over unsatisfactory work. Many states require that you hold professional liability coverage before you can submit your application for certain professional licenses.
Workers’ compensation insurance: Workers’ comp is required in almost every state for businesses that have employees. It covers medical expenses for work injuries, which are not often covered by regular health insurance.
Cyber insurance: This policy helps small businesses recover financially from data breaches and cyberattacks. It’s recommended for any business that handles credit cards or other personal information.
How to get cheap car insurance with Swift Insurance
Complete Swift’s easy online application today to find affordable commercial auto insurance coverage from top-rated U.S. companies. You can also consult with an insurance agent on your business insurance needs, including finding affordable workers’ comp and E&O policies.
Once you find the right types of insurance for your small business, you can begin coverage and receive your certificate of insurance in less than 24 hours.
State laws for commercial auto insurance
Because state laws regulate commercial auto insurance, it’s important to know the requirements for your business based on where you are located. Learn more about the laws for commercial auto insurance in your state.
Each state sets commercial auto insurance requirements
Every state except for New Hampshire requires commercial auto insurance for business-owned vehicles, and all states require the ability to compensate someone if you or an employee are at fault in an accident. If you use a personal vehicle for work, your private insurance won’t cover you in the event of a work-related accident.
When you buy a policy, you’ll need to make sure it meets your state’s minimum coverage requirements for bodily injury liability and property damage liability.
Failing to maintain this coverage can result in steep financial penalties, while also leaving your business at risk of an expensive lawsuit or settlement if an accident is your fault.
Why do you need commercial auto insurance?
If your business owns vehicles, a commercial auto insurance policy can offer you the same kind of financial protection that you receive from your personal auto insurance. It’s required in most states, and it makes financial sense for business owners to insure their vehicles.
This is especially true for companies that rely on vehicles for a majority of their business. Delivery drivers and couriers, trucking companies, landscapers, motor carriers, and food trucks should make sure they have commercial auto coverage.
A commercial auto policy offers liability protection when you or an employee gets into an accident while driving a company vehicle. It can pay for any property damage or injuries caused by your business vehicle, as well as legal expenses. It can also cover medical expenses for yourself or an employee in a work vehicle accident.
Businesses that move people or goods across state lines are subject to both state and federal auto insurance laws, which mandate coverage based on the vehicle’s weight, number of passengers, and type of goods transported.
How much does company car insurance cost?
Your cost is based on a number of factors, including:
- Number of vehicles
- Vehicle type and value
- Level of risk involved
- Claims history
- Employee driving records
Commercial auto insurance costs an average of $147 per month. 37% of Insureon small business customers pay less than $100 per month for their policies.
How much commercial vehicle insurance is required?
The required types of coverage and the minimum liability limits differ according to the insurance laws in each state. It’s a good idea to buy coverage beyond the minimum, as lawsuits can be extremely expensive.
You might also consider collision coverage, which pays for damage to your own vehicle in an accident. Comprehensive coverage goes beyond this, with coverage for theft, weather damage, falling tree limbs, and other hazards.
Another coverage to consider is personal injury protection (PIP) insurance, which is an add-on to your commercial auto policy that helps provide medical payments (MedPay) coverage after a car accident, regardless of who was at fault. State laws determine whether PIP coverage is required. State laws determine whether PIP coverage is required.
It’s also worth paying attention to your deductible, any exclusions within your policy, and other options such as towing and vehicle rental after an accident.
What are split limits and combined single limits?
Commercial auto covers both auto liability (if you’re sued for bodily injury or property damage) and physical damage or loss caused by accidents, theft, vandalism, and storms. Most policies have a split limit, which means different limits for bodily injury, property damage liability, and property damage.
Combined single limit (CSL) policies have one limit that is the maximum for both bodily injury and property damage liability combined. CSL policies have a higher premium and are more common for truckers or larger businesses with more assets to protect.
Do I need additional coverage, beyond commercial auto insurance?
If you or your employees use any personal, leased, or rented vehicles for work, you need hired and non-owned auto insurance (HNOA) because your personal or commercial auto insurance wouldn’t cover any accidents that happen during work-related activities.
Your personal auto insurance company covers your vehicle use only during personal activities or driving to and from work. Your personal auto insurance policy doesn’t cover any accidents connected directly to your business operation.
Commercial auto insurance covers vehicles that your business owns, but not any vehicles that you rent or lease for work.
Consider what would happen if you or an employee were in an accident while making deliveries in your own car. You’d be on the hook for any damages, medical expenses, or lawsuits that result from the accident.
You can buy HNOA coverage separately, but many businesses obtain this as an add-on to their general liability insurance, usually at a lower rate than buying the two policies separately.
Do I need additional auto insurance coverage if I drive into a different state?
If you, your covered drivers, or business materials across state lines, your state insurance travels along with you. In many instances, if the insurance limits in the state where the car is registered are less than the state limits where you’ll be driving, your insurance carrier will cover the difference to match these limits so that you will meet the other state’s legal requirements.
However, some states do have interstate coverage requirements that you must meet in order for your covered drivers or business materials to cross state borders. It is best to try and stay within your coverage zone as outlined by your state laws, or consult an Insureon agent or carrier to help determine the right coverage limits for your business.
Find quotes from trusted carriers with Swift Insurance
Complete Swift’s easy online application today to find affordable commercial auto insurance coverage from top-rated U.S. companies. You can also consult with an insurance agent on your business insurance needs, including finding affordable workers’ comp and E&O policies.
Once you find the right types of insurance for your small business, you can begin coverage and receive your certificate of insurance in less than 24 hours.