If you need vehicles for your business, you should also budget for business auto coverage. Reviewing the factors that influence the cost of business auto insurance can help you plan for this often significant expense. Collect data on the average distance traveled, cargo value, your staff’s driving history, and the types of vehicles you plan to purchase before getting quotes from commercial auto insurance companies.
types of commercial auto coverage
Business auto coverage protects your business from the cost of damage and medical expenses after an auto accident (first-party coverage). It also includes third-party coverage, often called liability, which pays for property damage and medical expenses for other parties involved if someone insured under your commercial policy causes an accident.
Collision coverage, a form of first-party insurance, covers the cost of repairing your commercial vehicle after an accident, regardless of fault. The other main primary policy is comprehensive coverage, which pays for damage to your commercial vehicle or fleet caused by incidents other than accidents, such as theft, vandalism, or extreme weather.
Other types of commercial auto insurance coverage include:
- contracted or non-owned liability, which covers third-party property damage and bodily injury expenses when a covered person causes an accident in a vehicle your company hired or leased.
- contract auto physical damage coverage, which pays the cost of damage to a covered contract or rental vehicle in an accident, regardless of fault.
- medical payments insurance, which pays the medical bills of your drivers and passengers after an accident, regardless of fault.
- Uninsured or underinsured motorist insurance, which pays for property damage and medical costs if you are in an accident with an uninsured or underinsured driver.
- roadside assistance coverage pays for towing, gas, tire changes, and other mechanical needs if your crew gets stranded.
- Standard car used for business: $600 to $2,400
- limousine: $4,000 to $10,000
- cargo or delivery van: $3,300 to $6,200
- taxi: $5,000 to $10,000
- Semi truck: $8,000 to $12,500 for an owner-operator
- california – $574 to $1804
- florida – $2565 to $3370
- main – $486 to $1268
- michigan – $5,282 to $8,723
- Minnesota – $983 to $2,271
- mountain – $641 to $2525
- oregon – $1136 to $2205
- texas – $890 to $2594
- The scope of coverage: The cost guys finance website notes that the cost of your policy will increase based on the number of vehicles and drivers you need to cover for your business.
- Coverage Type: You can select from a variety of coverage types and endorsements for commercial auto insurance, each of which affects your overall premium price.
- Amount of Coverage: The higher your coverage limits, the lower the financial risk to your business. however, more coverage results in higher monthly or quarterly premiums.
- claims history: If your business has had few or no commercial auto insurance claims in the past, you’ll pay less for this type of coverage.
- The value of your fleet: Insuring just one or two commercial trucks costs less than insuring a dozen semis, and obviously your auto insurance rate will vary accordingly. Commercial auto policies often charge a percentage of the value of the vehicle or fleet for property damage coverage.
- the type of vehicles: The size of your commercial vehicles also matters when it comes to insurance costs. large trucks can cause much more damage than cars used for standard deliveries.
- Driving Distance: According to the Right Small Business, you’ll pay more for commercial auto coverage if your drivers travel long distances or take interstate trips.
- Parking location: Where you store your vehicles is a factor in your business car premium. The Hartford reports that businesses in areas of high vandalism, auto theft, and crime will pay more for coverage.
- deductible: If your company can pay a higher out-of-pocket deductible in the event of a claim, you can access lower premium costs.
- type of cargo: If you’re transporting hazardous materials, you’ll pay more for auto coverage than if you’re transporting harmless items. the same goes for transporting high-value items rather than less expensive goods.
- credit history: You may pay more for business auto insurance if your business has a poor credit history.
- type of industry: Businesses in high-risk industries pay more for auto insurance than those in industries associated with a lower risk of car accidents.
- the number of employees: Many auto insurance companies quote commercial rates based on the number of people you have on your payroll.
average cost of commercial auto insurance
These are the approximate annual policy costs for various types of commercial vehicles:
These trusted choice averages represent the wide range of commercial auto insurance costs.
Cost Specialists collected data on the maximum and minimum commercial auto insurance policies in each state and reported these average annual ranges:
Because every business needs a customized business auto insurance solution, it can be hard to trust these averages. the hartford surveyed businesses in eight industries and reported an average premium cost of $55 per month or $662 per year.
factors that affect the cost of commercial auto insurance
Before looking for quotes, familiarize yourself with the range of variables that change how much you pay for auto insurance:
recommended commercial auto insurance providers
progressive business offers affordable rates for small business owners. If you fall into this category, you can access discounts for electronic payments, advance premium payments, and policy packages. You can also save up to 5% on fleet coverage with the snapshot proview fleet management program.
Experts say Geico offers great rates for delivery and rideshare drivers who want a single company for personal and business auto coverage. They also offer comprehensive commercial policies for individual vehicles and fleets.
the hartford specializes in policies for professionals who use their vehicles for business. You can save on this type of coverage with Femoral Accident and Impingement Waiver.
You need business insurance if you use any type of motorized vehicle for work. You must even purchase coverage if you borrow, lease or lease vehicles for business purposes or use your personal vehicle for business purposes (as a rideshare driver, for example).
Check this out if you need additional information, resources, or guidance on auto insurance.