How much does commercial auto insurance cost?
The average premium cost for commercial auto insurance is about $245 per month. Your exact cost will depend on several factors, including your policy limits, the number of vehicles you own and their value, your employees' driving records, and the type of coverage you choose.
What do small businesses pay for commercial auto insurance?
On average, commercial auto insurance costs $245 per month. Annual premiums range from under $375 to over $16,000.
Our figures are sourced from the median cost of policies purchased by TechInsurance customers from leading business insurance companies. The median provides a better estimate of what your business is likely to pay because it excludes outlier high and low premiums.
The cost of auto insurance varies significantly based on a number of factors, including your business type, business location, how many vehicles you own, and their value.
For example, standard sedans typically cost less to insure than commercial trucks, cargo vans, utility trailers, and other larger, more expensive vehicles, such as moving vans.
Common commercial auto insurance premiums for TechInsurance customers
TechInsurance's small business customers spend an average of $245 per month, or $2,942 annually, on commercial auto insurance.
Annual commercial auto insurance costs range from under $375 to over $16,000. 40% of TechInsurance customers pay less than $200 per month, while an additional 29% pay $200 to $400 per month.
Commercial auto insurance costs vary depending on a variety of factors, including the number of business vehicles owned and the type of policies chosen.
Key factors that affect commercial auto insurance costs
Here are the top factors that impact your commercial auto insurance costs:
Coverage limits and deductible
The cost you pay for commercial auto insurance depends on your coverage limits. Most small business owners opt for commercial auto insurance coverage with a $1 million policy limit.
If a commercial auto policy has a $1 million / $2 million liability limit, that means you'll carry:
- $1 million per-occurrence limit, meaning your insurance provider will pay up to $1 million to cover a single incident or accident while the policy is active.
- $2 million aggregate limit, meaning your provider will pay up to $2 million in insurance claims during the policy period (typically a year).
Commercial auto insurance covers legal and medical bills if your business vehicle is involved in an accident. Generally speaking, you'll need to carry both property damage and bodily injury liability insurance to cover the damage that your vehicle may cause to other individuals, vehicles, and property.
It's also important to keep in mind your state's insurance requirements when it comes to your commercial auto coverage. Each state requires small business owners to carry different types and amounts of coverage.
Businesses with several company cars or that drive frequently should consider higher liability limits, as they're at higher risk for accidents. Higher limits cost more, but can provide more compensation in the event of an accident.
When you purchase your policy, you may want to consider a higher deductible to save on your insurance costs. Higher deductibles generally mean lower overall premiums, but it's critical to ensure that you can afford the deductible you choose in the event of an accident, or your insurance provider will not cover your claim.
Your business needs will determine how much coverage you need. You can speak to a licensed insurance agent to discuss the right coverage for your commercial auto needs.
Type of coverage
The type of auto liability coverage you select will impact the cost of your policy. The less coverage a policy offers, the less you can expect to pay for the plan.
A regular commercial auto policy is typically required in most states for all business-owned vehicles. This typically covers both property damage and liability suits, similar to a personal auto insurance policy. A commercial vehicle insurance policy is usually more expensive than car insurance for your personal vehicle, since the claims tend to cost more.
If you use a leased, rented, or personal car for business purposes, hired and non-owned auto insurance (HNOA) would be the appropriate type of insurance coverage for your small business.
Some policyholders may want to add auto endorsements, as well as collision or comprehensive coverage, to their commercial vehicle policy for extra protection against risks such as theft and vandalism.
Additional endorsements to consider based on your needs include:
- Uninsured / underinsured motorist coverage
- Physical damage coverage
- Bobtail insurance
- Medical payments coverage
- Personal injury protection (PIP)
Check with your state requirements to see if these endorsements are required for your specific insurance needs.
Industry
Your industry impacts the types of vehicles you own and how you use them, which in turn determines your insurance costs.
Construction businesses, for example, will likely require more vehicles and use those vehicles more often than office-based businesses, such as digital marketing firms.
As indicated below, nonprofit businesses pay an average of $168 per month for commercial auto insurance, and real estate businesses pay an average of $192 per month.
Riskier businesses pay more for coverage, in keeping with their increased risk. For example, healthcare professionals pay $301 per month, and landscapers pay $299 per month.
Claims history
Insurance companies look at your claims history to determine how risky you are to insure. Companies with a history of commercial auto claims will pay more for insurance than those with a clean history.
Location
Your business location can impact your commercial insurance rates. Businesses located in areas with high crime, natural disasters, or heavy traffic will often cost more to insure than those in safer, less busy areas.
The cost of living in your area can also impact your rates. Because your commercial auto policy covers incidents like medical expenses and repair costs, regions with higher costs will naturally cost more to insure.
Areas with higher population density will also cost more than less populated, more rural areas because more people mean a higher risk of incidents and accidents.
Below are examples of average costs of commercial auto insurance over a variety of states:
State | Auto insurance cost |
|---|---|
$154 per month | |
$337 per month | |
$412 per month | |
$305 per month | |
$187 per month | |
$347 per month | |
$275 per month | |
$226 per month | |
$326 per month | |
$239 per month |
Employee driving records and demographics
Your employees' driving records will affect your cost of commercial auto insurance. An employee with a history of collisions and speeding tickets can mean higher premiums.
In addition, the demographics of your employees are another factor that insurance providers will consider. Younger drivers with less experience may be more costly than older, more experienced drivers.
Number of vehicles and types of vehicles
It's simple: The more vehicles you own or work on (such as an auto service business or dealership), the more opportunities there are for a car accident to occur. A fleet of vehicles, for example, will cost more to insure than a business with one or two company cars.
Even if you are an independent contractor or sole proprietor with one vehicle, it's still a good idea to carry commercial auto coverage to protect yourself from the high costs associated with accidents, such as medical expenses from bodily injuries. Without it, you will be responsible for paying medical payments and other costs out of pocket.
The type of vehicles your business owns can also have an impact on your commercial auto costs. For example, a sedan will cost less than a tow truck.
How can you save money on commercial auto insurance?
It’s easy to save money on your business auto insurance without compromising on coverage.
Some strategies to keep costs down include:
- Paying the annual premium. When you purchase a commercial auto policy, you can choose to pay your premium in either monthly or annual installments. The annual premium often costs less than paying month by month.
- Choosing a higher deductible. Choosing a higher deductible is an easy way to save on your premium, but make sure it's one you can still afford. If you can’t pay it, you can’t collect on a claim.
- Selecting the right coverage options. Your unique business needs will impact the insurance policies and coverage limits you should purchase. For example, an app developer will likely need less coverage than a lawn service business.
- Adding safety features. Anti-theft devices, dash cameras, GPS trackers, and other safety features can help keep your property safe and prevent claims.
How can you avoid making claims on your commercial auto policy?
The fewer commercial auto insurance claims your business makes, the less your insurance premiums cost.
A good risk management strategy to reduce commercial auto claims includes:
- Frequent car inspections and maintenance
- Keeping records of employees' driving history
- Avoiding texts or calls to employees on the road
- Mandatory drug and alcohol tests after an accident
Even though you can’t eliminate risks entirely, risk management helps you sidestep common pitfalls that lead to liability claims and higher commercial auto insurance costs.
It’s not as difficult as you might think to find affordable small business insurance. From comparison shopping to bundling policies, learn how you can save money and still protect your business.
How do you buy insurance with TechInsurance?
TechInsurance is a trusted insurance expert for small businesses, including limited liability companies (LLCs) and freelancers, with extensive knowledge of the IT sector. We help business owners compare quotes from top-rated providers, buy policies, and manage coverage online.
By completing TechInsurance's easy online application today, you can compare free quotes for commercial auto insurance and other insurance policies, like general liability and errors and omissions, from top-rated U.S. carriers. TechInsurance insurance agents are available to help answer any questions you may have.
Once you find the right commercial policies for your small business, you can begin coverage in less than 24 hours and get a certificate of insurance for your small business.
Learn more about other business insurance costs
Insurance premiums vary based on the policies a business buys. View our small business insurance cost overview or find out the average costs for other common types of business insurance.
The figures on this page reflect the median cost of policies purchased by 100,000 of TechInsurance's customers. Most of our customers have been in business for five years or less, employ fewer than five people, and generate annual revenues ranging from about $50,000 to over $200,000.