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Average Cost of Commercial Auto Insurance

 Commercial car insurance is a special policy that is usually required if you own a business vehicle or if you frequently use your car for company purposes. It is designed to cover all expenses, damages, and injuries caused by an accident during working hours or while running a business. Auto insurance policies are generally grouped into three types: collision, liability, and comprehensive.

The cost of a commercial auto insurance policy may vary depending on how often your business uses your vehicle, the make and model of your vehicle, and the size of your fleet. In this guide we discuss the average cost of commercial auto insurance.

How Much Does Commercial Auto Insurance Cost? $600 to $2,400 per car

The average cost of commercial auto insurance will run between $50 and $200 a month for the majority of small business owners– about $600 to $2,400 annually. That is for each commercial car they have insured.

Your commercial car insurance cost will depend on a number of variables. Your specific combination of factors will make your commercial auto insurance cost per month unique to you.

Melanie Munson of autoinsurance.org says that you should expect to pay a bit more than you do for your personal auto policy.

Average Cost of Commercial Auto Insurance by Car Type

Another big factor in commercial car insurance cost is the kind of vehicle you need to insure. Every vehicle is different, and they all have their primary purpose. That will affect the cost of insuring it because what you need that kind of vehicle for will dictate the kind of incidents likely to occur. Here are some examples of vehicle types and the average cost of commercial auto insurance you can expect to pay for each:

Car TypeMin. Annual Cost Commerical Auto InsuranceMax Annual Cost Commercial Auto Insurance
Car$600$2,400
Semi$8,000$12,500
Cargo/Delivery Van$3,300$6,200
Limo$4,000$6,000
Cab$5,000$10,000

How Much Does Commercial Car Insurance Cost by State?

According to Sarah George of Finder.comTyour rates will be influenced by the state you live in because some states require higher levels of insurance coverage than others. Traffic and theft rates around your address also play into your risk too.

California for example requires $300,000 in combined liability for most small commercial vehicles, but $750,000 for vehicles over 10,000 pounds.

Each state has a minimum amount of commercial car insurance coverage you need. The higher the minimum coverage, the higher the minimum price. Here’s what you should expect to pay in a handful of states:

StateMin. Annual Cost Commerical Auto InsuranceMax Annual Cost Commercial Auto Insurance
Maine$489$1,268
Florida$2,565$3,370
Oregon$1,136$2,205
California$574$1,804
Minnesota$983$2,271
Texas$890$2,594
Montana$641$2,525
Michigan$5,282$8,723

Furthermore, even within a state there can have large variations in pricing. The difference between paying for the minimum amount of coverage you need and paying for full coverage can be in the thousands so the price ranges quite a bit.

What Influences the Cost of Commercial Auto Insurance?

Commercial auto insurance costs tend to be higher than personal car insurance coverage. That’s because the factors that influence your commercial auto insurance costs are more detailed. Also, a business is more open to liability than an individual is.

A commercial auto insurance cost estimator can give you a good idea of what you’ll pay, though it won’t be exactly accurate. Here are some factors that influence the cost of your commercial auto insurance policy:

  • Make, model, and year: The kind of vehicle(s) you’re insuring will change the price. Generally, the larger the vehicle, the higher the cost to insure it due to the damage it can inflict in an accident.  
  • Cost: The cost will influence how much the car would be to repair or replace.
  • Driving records for all covered drivers: Drivers with more previous accidents will cost more to insure.
  • Vehicle uses: The more you do with it, the more insurance will cost. If you haul expensive things, they have to cover damages and if you travel long distances it will wear down quicker.
  • Previous claims: The more claims you’ve filed in the past the more you’ll have to pay.  
  • Type and extent of coverage: The more your policy covers the more it will cost.
  • Number of vehicles: The more vehicles they have to cover the higher their risk.

Do You Need Commercial Auto Insurance?

Any vehicle you use for business purposes should be covered under a commercial auto policy. Other than simply driving to and from work, any business-related task you use your vehicle for may not be covered by your personal auto insurance policy. A good rule of thumb is if you’re on the clock, whether that’s driving to meet clients, deliver goods, or inspect properties, you’ll need commercial coverage. Sometimes it’s hard to tell if your vehicle use is covered by personal car insurance or not so be careful.

Commercial Auto Insurance vs Personal Car Insurance

Your personal car insurance policy will typically cover any personal use of the vehicle while any business or commercial use will require commercial auto coverage. There are situations where your use of the vehicle may fall close to the blurry line that separates the two policies though. Here are some examples:

Personal Car Insurance:

  • Commuting to your job
  • Bringing personal items to and from the office
  • Driving a work friend home
  • Dinner with coworkers

Commercial Auto Insurance:

  • Delivering goods to customers
  • Driving for Lyft
  • Regular long drives to work sites or clients
  • Carrying heavy equipment or work tools

Final Thoughts

If you aren’t sure if you need commercial auto insurance, speak to an insurance agent and go over the details. It’s always better to air on the side of caution though. If your vehicle use is on the line somewhere, it’s better to get a commercial policy so you don’t end up without coverage when you need it most.

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