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What Influences Commercial Auto Insurance Costs?

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Do You Need Commercial Auto Insurance?

Commercial auto insurance (also referred to as commercial vehicle insurance) protects vehicles that are used for business or owned by a business. Many states require commercial auto insurance if the car in question is being used by a business. Plus, most personal auto insurance policies exclude vehicles being used for business. So if your business falls into that category, look into getting commercial auto insurance

What Impacts Commercial Auto Insurance Rates?

The cost of a commercial vehicle insurance policy will vary depending on numerous factors, including but not limited to:

  • Profession/Industry: Different professions carry different risks. A business that operates large commercial semis will have higher premiums than someone who drives a small box truck. It also depends on how frequently you’re driving the vehicle in question.
  • How The Vehicle is Used: This ties into the profession/industry, but a vehicle that is used for construction (with one driver) will often cost less than a vehicle used to transport multiple people. Large vehicles over 1-ton that transport thousands of pounds of goods will be the most costly. 
  • Location: If you primarily drive in a highly-populated area and busy cities, you can expect to pay more than rural locations. 
  • Driving Distance: The longer/more you drive your vehicle(s) you’re at an increased risk of an accident. If you drive short distances or stay under a certain annual mileage, your premiums may be lower. 
  • Type of Vehicles: The average cost will vary between the type of motor vehicle used. Tractor-trailers, buses, box trucks, SUVs, taxi, small cars, etc. will all be insured differently. The value, age, weight, and number of vehicles is also taken into consideration. 
  • Type of Cargo: Hauling expensive or hazardous materials can increase the rates you pay. Inexpensive cargo will cost less to insure.
  • Driving History: A commercial auto insurance company will run checks on any driver listed on your policy. If they have a poor history of tickets and/or accidents, they will negatively impact the cost of your coverage. 
  • Coverage Needs: a $2 million policy will have higher premiums than a $1 million policy or state-required minimum coverage. Likewise, every optional coverage you get will increase the price.

How to Lower Your Commercial Auto Insurance Rates

There are a few things you can do as business owners to reduce the cost of a commercial auto policy:

  1. Lower your coverage limits + raise your deductibles: If you can afford a higher deductible it can lower your monthly or annual premiums. The same goes for lower coverage limits. However, if you choose the state-required minimums, you may not have adequate coverage. Speak to an agent to help determine the coverage limits you need to protect your small business. 
  2. Maintain a clean driving record: Accidents and tickets will increase your premiums. Make sure you hire drivers with clean driving records to lower costs. 
  3. Choose safe and reliable vehicles: Vehicles that are rated safer and have less of a likelihood of severe damage can actually cost you less (because the insurance company has to pay less to repair damage or replace the vehicle). 
  4. Store your vehicles in a secure place: Make sure your vehicles are stored in a safe and secure place, preferably under lock and key with surveillance. 
  5. Find an insurance company that offers incentives/discounts: Some insurance companies will offer discounts for safe driving or installing GPS systems. 

Check with an insurance agent to see what you can do to obtain a cheaper commercial vehicle insurance cost.

What Does Commercial Auto Insurance Cover?

In a nutshell, these are the coverage types available for a business in a commercial auto insurance policy:

  • Auto liability: This liability policy protects you from legal liability if you are found at fault for an accident, personal injury, or property damage. 
  • Medical payments: This covers you, passengers, and employees if you are injured in an auto accident, no matter who is at fault. It covers medical costs up to the limits of your policy
  • Collision coverage: Collision coverage pays for the damage to your vehicle. It doesn’t matter who is at fault, whether you hit another vehicle, or any other type of property. Your deductible will apply. 
  • Comprehensive coverage: Comprehensive comes into play when the damage to your vehicle is caused by weather, vandalism, theft, etc. This is often optional coverage and your deductible will apply.
  • Uninsured and underinsured motorists coverage: If an accident is caused by a hit-and-run, someone who is uninsured, or someone who is underinsured, this coverage steps in. It will cover the damage to the vehicle and medical costs for anyone inside. 
  • Hired and Non-owned Liability: This optional coverage can pay for damage if you’re using a personal or rented vehicle for business purposes.
  • Rental reimbursement: This will cover the cost of a rental vehicle for a certain length of time outlined in your policy. 
  • Roadside Assistance: Many insurance companies now offer roadside assistance for free or as a cheap optional monthly coverage. 

To learn more about commercial auto insurance coverage, check out our comprehensive guide to coverage

The Average Commercial Auto Insurance Cost

A small business can expect to pay anywhere from $600 to $2,500 annually for a commercial auto policy. The average cost varies per the type of vehicles insured:

  • Commercial Truck: $800 to $2,000
  • Commercial Car: $1,200 to $2,400 (if used infrequently, can be as low as $600 annually)
  • Commercial Bus: $35,000+
  • Delivery Vans/Box Trucks: $3,300 to $6,200
  • Taxi/Limousine: $4,000 to $10,000
  • Semi/Tractor Trailer: $8,000 to $12,000

As stated earlier, the average cost of commercial auto insurance will vary depending on numerous factors, so it's best to speak with a knowledgeable agent to get accurate commercial auto insurance costs.

Get a Free Commercial Auto Insurance Quote

Our goal at Tivly is to help you find auto policies that will fit your small business. We also strive to make the process of obtaining commercial insurance stress-free and easy. If you'd like to speak to an agent to get commercial auto insurance costs, complete the form at the top of the page. Or, give us a call at 877-907-5267 for a free quote.

What other Business Insurance Do You Need?

Odds are if your small business needs auto insurance, you have other commercial insurance needs. Here are some common policies to include in business insurance packages:

Our experienced agents can help connect you with the liability coverage that your business needs, don't hesitate to give us a call!


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