A personal auto insurance policy won’t cover business use of a vehicle. If you use a vehicle for work, you’ll need commercial auto insurance.
We evaluated large companies based on complaints from the National Association of Insurance Commissioners to help you find the best commercial car insurance.
Commercial Car Insurance: What Is It?
It’s crucial to have commercial auto insurance when you drive a car, truck or van for business purposes. Your personal auto insurance won’t cover the vehicle if you (or an employee) get into an accident.
All types of commercial vehicles can be covered by commercial auto insurance, from company cars to food trucks to delivery vans.
Commercial Auto Insurance: What Does It Cover?
Commercial auto insurance offers the following types of coverage:
- The property damage liability covers damages to another person’s property, such as their car, if you are at fault.
- When you’re at fault for an accident, you’re liable for the injuries you cause.
- A combined single limit (CSL) provides one limit for both property damage and bodily injury claims.
- When your business vehicle hits another car or an object, such as a pole, collision insurance pays for the damage.
- Weather, fire, falling objects (such as tree branches), and other problems are covered by comprehensive insurance.
- No matter who was at fault, medical payments and personal injury protection (PIP) cover the cost of medical care for you and your passengers.
- If an uninsured driver strikes your vehicle, uninsured motorist coverage pays for your injuries and those of your passengers.
Is Commercial Auto Insurance Necessary?
You will need commercial auto insurance if you are driving a vehicle for business purposes. Your personal car insurance policy will not pay a claim if you are in an accident.
Commercial auto insurance is necessary in the following situations:
- Vehicles used exclusively for work (for example, company cars).
- Your vehicle transports goods or people.
- Your vehicle transports tools or equipment.
- Business vehicles are driven by your employees.
- The company owns the vehicle.
- Your vehicle is used for business purposes.
Non-Owned vs. Hired Car Insurance: What’s the Difference?
The vehicle you use for business or one that you rent will not be covered by a commercial auto policy, but you can get coverage through “hired and non-owned auto insurance.”
If you drive your personal car to a business meeting and get into a car accident, the other driver decides to sue your business, hired and non-owned auto insurance can cover the legal costs.
Cost factors for business auto insurance
Here are the factors that affect commercial auto insurance pricing.
- Your company’s type impacts your commercial auto insurance rates. If you primarily work from your office, you’ll pay less than someone who drives all day with tools and equipment in a work van.
- Insurance rates are affected by the type and size of the company vehicle.
- Good driving records are rewarded with better rates.
- You’ll pay more for your commercial auto insurance in a big city than in a small town. You’ll pay less in an area with few accidents and car thefts.
- Rates are impacted by how much you typically drive a commercial vehicle.
- Your coverage choices and insurance limits affect your rate.
Is Rideshare Insurance Necessary?
If you drive for Uber, Lyft or another rideshare service, you may want to consider rideshare insurance. A personal auto policy and the company’s insurance can leave gaps in coverage.
In the case of a driver who has installed the rideshare app but is still waiting to receive a passenger request, there is a gap in insurance coverage. Neither their personal auto policy nor the rideshare company’s insurance provides comprehensive and collision coverage for the driver. Getting rideshare insurance fills this gap in coverage.
FAQs about commercial auto insurance
Commercial or personal insurance is cheaper?
Since commercial auto insurance typically has higher limits to account for a higher risk, it typically costs more than personal auto insurance. In addition to insuring a driver or two and their car(s) for commuting or running errands, a commercial policy covers the entire business, including multiple drivers and multiple kinds of vehicles.
In addition to the number of vehicles insured, the coverage limits and deductibles you choose, your business’s location, and even how far your drivers travel will affect the cost of commercial auto insurance.
Who are the largest commercial auto insurance companies?
There are five top insurance companies: Progressive, Travelers, Old Republic Insurance, Liberty Mutual, and Nationwide.
How does commercial auto insurance work?
All the same types of coverage are available in auto insurance for business vehicles, including liability, collision, comprehensive, and uninsured motorist coverage, just like they are in a personal policy. You can also generally find business-specific coverage, such as coverage for lost business income if your vehicle is being repaired after a crash or other problem covered by the policy.
Which state has the highest vehicle insurance rates?
There are a variety of factors that affect your vehicle insurance rate, including your make and model, your driving record, your age, and your location. In Delaware, Louisiana, Michigan, New York, and Rhode Island, auto insurance costs are the highest.9
How Much Does It Cost to Insure the Most Expensive Car in the U.S.?
An average of $5,176 per year is the cost of insuring the Maserati Quattroporte in the U.S.10.
What can I do to lower my commercial insurance rate?
If you increase your deductible, reduce your coverage, hire drivers with clean driving records, and take advantage of any discounts offered by your commercial auto insurance provider, you can lower your commercial auto insurance rate.
What is the difference between commercial and personal auto insurance?
Since commercial auto insurance covers vehicles used for business purposes, it is generally more expensive than personal auto insurance.
When using a telematics program to track your fleet of vehicles, you’ll find business-specific coverage options and sometimes discounts.