How much does auto service insurance cost?

Automotive businesses spend an average of $54 per month, or $650 per year, for general liability insurance.

In some cases, you may need this coverage in order to sign a commercial lease, get licensed, or work with certain clients.

General liability insurance covers legal costs when a third party (someone outside of your company) files a lawsuit over a bodily injury or property damage. It also helps pay for advertising injuries, such as libel, slander, and copyright infringement.

One type of general liability is garage liability insurance, which is designed specifically for garage-based and auto service businesses. This type of coverage extends to risks a third-party may face in a hazardous workplace like a garage.

For example, a customer could trip over a car jack in your auto garage and hurt their ankle. If they file a lawsuit, a garage liability policy would help pay for your legal costs, such as attorney's fees.

This is the average general liability insurance policy for auto service businesses that buy from TechInsurance:

Premium: $54 per month
Policy limits: $1 million per occurrence; $2 million aggregate

The cost of general liability insurance depends on several factors, including the policy limits and deductible you choose. Insurance providers will also consider your type of auto business, the size of your business, and any additional insured endorsements you may have.

Among auto-based businesses that purchase general liability coverage with TechInsurance, 44% pay less than $50 per month. Another 32% pay between $50 and $100 per month.

Your policy limits, location, and income for your business will all factor into the cost of your premiums. You can help reduce your cost to an amount that better fits the budget of your auto services business by selecting either lower coverage limits or a higher deductible.

The majority of automotive business owners (97%) choose a general liability insurance policy with a $1 million per-occurrence limit and a $2 million aggregate limit.

On average, auto service companies pay a $38 monthly premium, or $458 annually, for garage keepers insurance.

When you buy garage liability insurance, a type of general liability coverage specifically for garage-based and other auto service businesses, you can usually add garage keepers insurance to your policy as an endorsement.

This type of coverage protects your customers' vehicles while in your care, custody, and control. For example, if a customer's vehicle is accidentally damaged while in your auto repair shop or parking lot, garage keepers insurance would pay for legal expenses and the cost of repairs.

This is the average garage keepers insurance policy for automotive businesses that buy from TechInsurance:

Insurance premium: $38 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $500

The cost of garage keepers insurance depends on many factors, include your type of business, the location of your business, and the types of vehicles you handle.

Small, low-risk auto shops may be eligible for a business owner’s policy (BOP), which costs an average of $145 per month or $1,741 annually.

A business owner's policy bundles general liability coverage with commercial property insurance at a lower rate than buying these policies separately. It protects against the most common third-party liability and property lawsuits, and helps your auto services business recover from a fire, burglary, or other property loss.

This is the average business owner's policy for automotive businesses that buy from TechInsurance:

Premium: $145 per month
Policy limits: $1 million per occurrence; $2 million aggregate
Deductible: $1,000

Medium-sized and/or higher risk automotive businesses should consider a commercial package policy (CPP) instead of a BOP.

A commercial package policy also combines your general liability coverage with property insurance, but offers more flexible protection options than a BOP. Additionally, the average cost of a CPP for auto service businesses is $89 per month, or $1,067 per year.

Auto service business owners may see higher costs if they choose to add endorsements to their policy. Insurance endorsements, such as business interruption insurance or equipment breakdown coverage, are often recommended to help avoid financial losses if a fire or power outage forces your business operations to cease for an extended period of time.

The cost of a business owner's policy mostly depends on the value of your business property. However, other factors such as your business operations, where you're located, the number of employees you have on staff, and your specialty can also affect your premium.

Among automotive business owners who buy a business owner’s policy with TechInsurance, 33% pay less than $100 per month, on average, and 66% pay less than $200 per month.

Auto shops with large or more expensive business property usually pay more for a BOP than auto service businesses with smaller premises or lower value business property. Your industry risk, years in operation, and claims history will also affect your premium.

On average, auto service business owners pay $148 per month for workers' compensation insurance, or an annual premium of $1,774.

State laws determine when you need workers' comp. In most states, you need it as soon as you hire your first employee. But even in areas where it isn't required, it's still recommended.

Workers' compensation coverage pays for medical expenses and provides disability benefits if you or an employee suffers an injury on the job, or develops an occupational disease.

For instance, if an employee accidentally cuts their hand while working on a client's car, this policy would pay for their doctor appointments, treatments, and any other medical costs. It also supplies part of the income they miss out on while they're recovering and unable to work.

Most workers' compensation policies include employer's liability insurance. This type of insurance helps pay for legal defense costs related to workplace injuries.

While sole proprietors and independent contractors aren't usually required to carry workers' comp, it's still a good idea to maintain this coverage. Your health insurance plan is unlikely to cover a work-related injury claim, leaving you with hefty out-of-pocket medical payments and significant financial loss.

The cost of workers' compensation insurance depends on several factors, including the number of employees you have and the level of risk involved with their jobs.

The chance of an injury while on-the-job is the biggest factor in determining workers' compensation insurance premiums. Auto services and dealer businesses with a higher risk of injury are likely to pay more.

Among automotive companies that buy workers' comp with TechInsurance, 33% pay less than $100 per month for a workers' compensation policy. And 64% pay $200 or less per month for coverage.

Insurance companies will take into account the number of employees you have, their occupational risks, and your claims history when calculating the cost of workers' comp.

Automotive professionals spend an average of $76 per month, or $909 per year, on a commercial auto insurance policy.

Most states require this business auto insurance for cars owned by a business, such as tow trucks, courtesy drivers, and company vehicles. If you get into an accident, it can help pay for medical expenses, property repairs, and legal fees. It also covers vehicle theft and vandalism, in case your business vehicle is stolen or damaged.

Keep in mind that sole proprietors and independent contractors who drive their personal vehicle for business purposes will need extra coverage as well. Your personal auto insurance policy won't cover work-related accidents, so you'll need to buy hired and non-owned auto insurance (HNOA).

HNOA provides liability coverage for personal, leased, and rented vehicles driven for work purposes.

Both commercial auto and HNOA coverage only apply to your own vehicles. For coverage of your customers' cars, look to garage keepers insurance. This will need to be purchased separately from your standard auto insurance policy, and isn't calculated into commercial auto costs.

Insurance companies consider many factors when determining commercial auto insurance rates. That includes your employees' driving records, policy limits and deductibles, the number of vehicles you own and their value, and the coverage options you choose, such as comprehensive coverage or collision coverage.

Among vehicle service businesses that buy commercial auto insurance coverage with TechInsurance, 33% pay less than $50 per month and 60% pay less than $100 per month.

Many factors determine commercial vehicle insurance costs, including your work vehicle's value, how often it's driven, how many vehicles you own, employee driving history, and insurance claims history.

An automotive business with a larger fleet of vehicles, especially those of higher value and that are driven regularly, have an increased risk of accidents and/or vandalism. For this reason, these types of companies tend to pay a higher premium for car insurance than a small business with fewer vehicles and lower value vehicles.