Commercial Auto Insurance Cost: A Guide to Understanding Your Rates

Commercial auto insurance rates can be a mystery to many business owners, but understanding the factors that influence them can help you make informed decisions.

Your business's size and type are major factors in determining your commercial auto insurance rates. For example, a large trucking company will likely pay more than a small landscaping service.

A clean driving record is essential to keeping your rates low. If you or any of your employees have a history of accidents or traffic tickets, your rates will increase.

Your location also plays a significant role in determining your rates. Urban areas tend to have higher rates than rural areas due to increased traffic and risk of accidents.

The average cost of commercial auto insurance is around $147 per month or $1,762 annually, but this can vary widely depending on the business and its specific needs.

One factor that can drive up costs is the type of business you're in. For example, for-hire transport trucks pay an average of $1,041 per month, while tow businesses pay an average of $600 per month.

The national average cost for full coverage commercial auto insurance is $2,545 per year, while minimum coverage costs $741 per year. This highlights the importance of understanding your specific coverage needs and how they can impact your premium.

Here's a breakdown of the median and average costs for different types of commercial customers:

The average cost of commercial auto insurance is around $147 per month or $1,762 annually, but this can vary widely depending on the business.

Many businesses pay less than $100 per month for commercial auto insurance, with 37% of Insureon's small business customers falling into this category.

Commercial auto insurance typically costs more than personal auto insurance because it often involves higher risk activities, such as regular driving and the transportation of goods or clients.

The national average cost for full coverage commercial auto insurance is $2,545 per year, while minimum coverage costs $741 per year.

A 8% average rate increase was witnessed in the commercial auto insurance industry in the first half of 2023, and this trend is expected to continue into 2024.

Here are some average commercial auto insurance costs for different types of businesses:

Keep in mind that these costs can vary widely depending on specific factors, such as coverage needs and driving history.

Gig economy workers often have fluctuating incomes, which can impact their ability to consistently pay for commercial auto insurance costs.

Their type of vehicle, whether a small car or a larger delivery vehicle, directly influences their insurance premiums.

The variable work hours of gig workers can highly affect the risk assessment by insurance companies, resulting in higher or lower insurance costs.

Fluctuating incomes can make it challenging for gig workers to budget for insurance costs, which can be a significant expense.

The type of vehicle used by gig workers is a key factor in determining their insurance premiums, with larger vehicles typically costing more to insure.

The average commercial auto cost isn't necessarily what you'll pay, as expensive outliers can drive up the average cost.

Your rate depends on specific features of your business, including coverage needs and driving history.

Businesses with fleets of vehicles often face higher insurance costs due to increased risk and liability.

In fact, insuring multiple vehicles usually results in a higher commercial auto insurance cost compared to insuring just one vehicle.

The type of vehicle used for your business and how you use it can also affect your commercial auto insurance rates.

Here are some vehicle characteristics that can impact insurance rates:

The specified usage of the vehicle, including factors like safety ratings, repair costs, and theft rates, can also impact insurance rates.

For example, vehicles used for towing or carrying hazardous materials may have higher insurance rates due to the greater risk involved.

The average commercial auto cost isn't necessarily what you'll pay, as expensive outliers often drive up the average cost. This is why many customers have a monthly premium closer to the median price.

Your vehicle type and usage can significantly impact your commercial auto insurance rates. For example, heavier vehicles or those used to carry hazardous materials usually incur higher insurance rates due to the greater risk involved and higher liability insurance requirements.

The type of vehicle you use for your business, including factors like vehicle age, size, trim level, and body style, can also affect your premium rates. The cost associated with repairing or replacing parts can also impact your insurance rates.

Here are some estimated median and average costs for different types of commercial vehicles:

The average commercial auto cost isn't necessarily what you'll pay, as expensive outliers often drive up the average cost. Your rate depends on specific features of your business, including coverage needs and driving history.

Average rate increases for business auto insurance reached 8% in the first half of 2023, and trends indicate continued rate hikes into 2024 due to factors such as driver shortages, nuclear verdicts, and inflation. This demonstrates the dynamic nature of commercial auto insurance rates.

The type of vehicle used and its safety features can also affect your commercial auto insurance rates. The premium rates for business auto insurance are influenced by various vehicle characteristics, including the type of car representing the business, vehicle age, size, trim level, body style, and the cost associated with repairing or replacing parts.

Heavier vehicles or those used to carry hazardous materials usually incur higher insurance rates, which is attributed to the greater risk involved and higher liability insurance requirements. This can result in higher premiums for businesses operating larger or more specialized vehicles.

The number of vehicles insured can also impact your commercial auto insurance rates. Insuring multiple vehicles usually results in a higher commercial auto insurance cost compared to insuring just one vehicle. This is because policyholders with large commercial fleets face difficulty securing excess coverage and encounter elevated program pricing due to the increased risk and liability associated with more vehicles.

Here are some key factors that can affect your commercial auto insurance rates:

Gig economy workers may also face unique challenges when it comes to determining their commercial auto insurance rates. Their fluctuating incomes and variable work hours can impact their ability to consistently pay for commercial auto insurance costs, and the types of vehicles they use can influence their insurance premiums.

Choosing the right coverage is key to reducing commercial auto insurance costs. Aligning your commercial auto insurance policy with the unique requirements and risks of your business vehicles ensures adequate protection against potential liabilities.

Higher coverage limits result in higher premiums, but electing to have a higher deductible can reduce insurance costs. For certain business uses, hired and non-owned auto insurance is a more affordable option that covers lawsuits but does not offer property damage protection.

There are various types of coverage offered by commercial auto insurance policies, including liability coverage, collision coverage, comprehensive coverage, uninsured/underinsured motorist coverage, and medical payments coverage.

Here's a breakdown of the types of coverage:

By choosing the right combination of coverage options, you can ensure that your business is adequately protected and potentially save on costs.

Rental reimbursement is a feature that can help you get back on the road quickly. Get up to $100 per day if your car is in the shop.

If you're stuck without a vehicle, rental reimbursement can be a lifesaver. This feature usually covers the cost of a rental car, so you can continue to get to work or school on time.

It's essential to review your insurance policy to see if rental reimbursement is included. Some policies may have specific requirements or limitations on this feature.

Personal auto insurance might seem like it covers everything, but it's not always the case. If you use your vehicle for work, you may need a business auto insurance policy.

Delivering goods, providing a service that involves regularly using a vehicle, carrying work equipment, or going to job sites are all scenarios that might require a business auto insurance policy.

Here are some examples of situations that might require a business auto insurance policy:

Commercial and personal auto insurance policies have some similarities, but they also have some key differences. A commercial auto insurance policy may have different eligibility criteria, definitions, coverages, exclusions, and limits than your personal auto policy.