Commercial Auto Insurance: Cost & Cheap Quotes From $12/mo

Commercial auto insurance is becoming an increasingly critical component for business owners that make money through their cargo vans and other vehicles. According to Automotive Fleet Magazine, in 2018, the commercial auto accident rate reached nearly 20%. This means that 20% of all commercial vehicles were involved in an accident that year.

These numbers correlate with an increasing number of accidents happening on the roads as more and more cars drive on them every year. According to the CDC, in 2020, 11% of work-related deaths involved workers driving or riding in their work vehicle during the course of their job. The commercial car insurance cost rises when there are more incidents to pay for and resolve.

(OSHA) has guidelines for employers that need to be followed. They estimate that motor vehicle incidents cost employers over $60 billion dollars every year.

While it may seem attractive to save money on your budget by avoiding car insurance for business vehicles, this is not a good idea. The costs of increasingly common business vehicle incidents can make or break your business's budget. Worse still, these unexpected costs make it difficult to account for them without a plan.

The good news is that affordable commercial auto insurance does not have to be hard to get, especially when you need it to drive box trucks and other vehicles. Many companies offer a commercial car insurance quote that’s quick and entirely online, making it a simple process. Thanks to streamlined technology, people can find their commercial auto insurance online that is tailored to their needs, whether they be operating a tractor-trailer or a light-duty vehicle.

One reason cheap commercial auto insurance can sometimes feel difficult is because of the many available company options. This article will talk about the top choices and provide a complete overview of the basics of commercial motor vehicle insurance, including the questions listed below:

• How does commercial car insurance work?

• Why is commercial auto insurance important?

• What’s the difference between personal and commercial auto insurance?

• What is not covered in commercial vehicle insurance?

• How much does commercial auto insurance cost?

• What are the best commercial vehicle insurance companies?

The best commercial vehicle insurance providers will offer comprehensive coverage, minimizing costs to the business and getting the vehicles repaired and back up and running quickly. Let’s take a look at how commercial automobile insurance works.

How Does Commercial Car Insurance Work?

Commercial car insurance, also known as business auto insurance protects any vehicle used for business purposes. Insuring a business vehicle is important as uninsured vehicles are prohibited from running on the road. Legal fines are imposed for non-compliance.

Commercial car insurance works by creating a policy plan for any physical damage or liability concerns surrounding vehicles used in a business capacity. These situations are often not covered by personal auto insurance. Even if you handle fewer employees, or you are your only employee, you will still want to purchase small business commercial auto insurance.

Basically, your business forms a contract with an insurance company where you pay a premium cost, and the insurance company agrees to cover losses incurred from your commercial vehicles. Your business car insurance quote will vary depending on your previous driving history, industry, and type of vehicles you need covered.

The Department of Transportation puts financial responsibility on commercial motor vehicles primarily focused on insurance requirements through its regulation arms. Insurers are also responsible for safely enforcing their policies and updating the risk factors for business car insurance rates.

Why is Commercial Auto Insurance Important?

A commercial auto insurance policy is important because it protects against the many kinds of damage involving company-owned vehicles. Commercial car insurance is the safety net that protects your business from extra costs from things like:

• Collision–Costs for things like vehicle repairs and vehicle replacements when a vehicle becomes badly damaged

• Liability–When your commercial vehicle, employee, or passenger is found liable to pay for damages

• Rental costs–Costs associated with replacement vehicles while a damaged vehicle is being repaired

• Underinsured drivers–When an incident involves another driver who doesn’t have insurance or whose insurance won’t cover it

• Property damage–Costs related to when your commercial vehicle damages property

• Medical expenses–Additional costs from injury related to a commercial vehicle incident

• Legal fees–Legal costs associated with court and lawyers' fees

Commercial auto insurance is also essential to reducing the public burden that motor accidents have on health care. Over the years, this burden has significantly increased, according to the National Library of Medicine.

What’s the Difference Between Personal and Commercial Auto Insurance?

The primary difference between personal and commercial auto insurance is that personal auto insurance does not necessarily cover work-related incidents. Some small business owners think they only need their own personal car insurance but neglect to consider how the breadth of options that small business car insurance covers.

Personal auto insurance usually excludes most business uses. This means if you drive your car for work and get into an accident, you will most likely not be covered. The exception to this is your daily commute to work. 

For this reason, it is imperative, even if you are a small business owner, to seek out a small business auto insurance quote to protect your business against an excluded incident. Every business owner should not neglect getting small business auto insurance that covers the appropriate range of vehicles that they use for work-related purposes.

In contrast to personal auto insurance, commercial auto insurance covers vehicles used to:

• Haul loads associated with work

• Transport passengers like employees or clients

• Tow business property

• Take a service call

• Deliver consumer goods or work equipment

• Charge customers for riding

What is Not Covered in Commercial Vehicle Insurance?

While commercial auto insurance does cover several different situations, it doesn’t cover everything. Below are a few instances that commercial vehicle insurance won’t typically cover.

• Property handling–Commercial auto insurance usually covers the loading and unloading of the property onto a covered vehicle. However, handling property that is not part of the loading or unloading process is usually not part of the coverage

• Workers’ compensation–If one of your employees is injured in a company vehicle, that coverage will require a worker’s compensation policy that covers medical expenses or lost wages

• Intended injury/damage–If a company vehicle is used to harm someone’s body or property intentionally, insurance plans will typically not cover this

• Transporting pollutants–If your commercial vehicles are loading or transporting pollutants and an accident occurs, commercial auto insurance will typically not cover this. You will need a separate form of insurance for incidents of this type

Components of Commercial Auto Insurance Policy

Commercial auto insurance contains several different components that address different potential liabilities your commercial vehicles can incur. Below is a list of the most common and critical components of a commercial auto insurance policy.

Commercial Auto Liability Insurance

The main component of a commercial auto insurance policy is liability coverage. Commercial auto liability insurance covers the third parties involved in an accident that you or your employee caused. To be more specific, business automobile liability insurance will help you cover bodily injuries and funeral expenses. 

Collision Insurance (Physical Damage and Comprehensive)

Collision insurance covers the cost of repairing or replacing a damaged vehicle. There are two primary distinctions in this kind of insurance policy.

The first, called collision coverage, is when your vehicle strikes another physical object. The second is called comprehensive coverage and is when virtually anything else causes damage to the vehicle.

Together they account for most of the reasons why your commercial vehicle would need physical repairs.

Uninsured/Underinsured Motorist Coverage

Uninsured/underinsured motorist coverage provides relief when driver injuries, passenger injuries, and vehicle damage belonging to your side will not be covered by the other motorist. 

Typically this happens the other party is found at fault, but they either have no insurance or don’t have enough coverage to handle the cost of injuries or repairs. This type of coverage ensures that you can cover the remaining cost.

Roadside Assistance Coverage

Roadside assistance covers the costs associated with towing your vehicle away from the accident scene as well as tire changing and fuel delivery. Commercial vehicle insurance companies usually offer this as an add-on. 

Gap Coverage

Gap coverage is not always present in commercial auto insurance. It kicks in when your car is damaged beyond repair or stolen. 

The Gap insurance coverage protects your business vehicles from depreciation costs that can occur when financing or leasing your vehicles. Depreciation can cause a gap in the current value of the car and what it takes to replace it.

Sometimes qualifying for gap coverage also requires that you have both comprehensive and collision coverage as a part of your policy, so if you want to take advantage of it be sure you are meeting all the prerequisites.

Rental Reimbursement Coverage

If your vehicle is too damaged to serve its business function, you will often need to rent a temporary replacement. Rental reimbursement coverage ensures that you don’t have to pay for your rental replacement entirely out of pocket.

If you don’t need to rent a vehicle, it can also cover things like public transportation fares. This coverage does not include things like your vehicles being out of commission for routine maintenance or if you are traveling on business and need to rent a car.

Medical Payments/Personal Injury Protection Coverage

Medical payments and personal injury protection cover similar types of costs but differ slightly. Illustrated below are the subtle differences.

Commercial Auto Insurance Cost

The average commercial auto insurance cost is $180 per month or $2,160 per year for a $1 million auto liability coverage. The actual cost reflected in your commercial vehicle insurance quote may differ due to vehicle make and model, location, deductibles, policy limits, and other factors. Here is a comparison of how the best business car insurance companies stack up against each other:

Compare a commercial auto insurance quote to the next to get a better grip on how much premiums will be. Start by clicking the “Get Quotes” button on this page.