Commercial Auto Insurance in California

California may best be known for the glittering lights of Hollywood and the majesty of the Golden Gate Bridge. However, this mecca of entertainment and natural wonders is also home to over 4 million small businesses. According to the U.S. Small Business Administration Office of Advocacy, California’s small businesses account for 47.6% of the state's employees. From technical services to transportation and real estate, many of these small businesses utilize vehicles to conduct business operations. Remember, that even if you use your personal vehicle for business purposes you may require commercial auto insurance. 

Commercial coverage can be an essential step in keeping your small business running smoothly. This type of policy is designed to offer a wider array of coverage and generally includes a higher liability limit. Examples of commercial use of a vehicle can include transporting equipment, job site visits, and delivering goods. Infinity Insurance Agency Inc., (IIA) is well-versed in the requirements of commercial auto insurance in California and is here to help demystify the process of obtaining commercial coverage.

Who needs commercial auto insurance in California?

Who needs commercial insurance in California? By law, all vehicles being operated or parked on California roads require auto insurance. Personal auto policies will typically not extend coverage for vehicles if they are being used to carry out work activities such as visits to vendors or transportation of equipment. Furthermore, some large trucks and/or special commercial vehicles may require specific commercial insurance which tends to have a higher coverage limit. Keep in mind that any business that regularly transports goods for a fee or requires employees to drive company vehicles will likely require commercial auto coverage. To ensure you comply with all auto insurance requirements in California you should speak to an agent.  

Common businesses in California that may require commercial auto insurance include, but are not limited to:

• Construction
• Contracting/building development
• Home improvement services
• Lawn care services
• HVAC repair services
• Car mechanic services
• Wholesale delivery/ pickup services
• Food trucks

Commercial auto insurance requirements in California

Wondering about the California commercial auto insurance requirements? By law, all vehicles in the Golden State must obtain the following minimum liability insurance requirements:

• $15,000 for bodily injury/death for one person
• $30,000 for bodily injury/death for more than one person
• $5,000 for property damage liability

This minimum liability insurance requirement can also be represented as a split limit of (15/30/5). Minimum liability insurance only provides third-party coverage and does not include coverage for instances of injury to the driver or theft, vandalism, and natural disaster damage.  

Please note that these are only the minimum liability insurance requirements of California. Depending on the nature of your business and the vehicles you own, you may consider a policy that provides additional coverage and/or higher limits. These minimum liability limits also do not include any additional insurance requirements for commercial and/or fleet vehicles deemed necessary by any federal, state, or local agency. Generally, semi-trucks and other vehicles with a U.S. Department of Transportation of California serial number will require additional liability coverage requirements.

Now is a great time to check both your commercial and personal coverage limits (link to PPA CA page). Effective January 1st, 2025, the minimum limits will be increasing to:

• $30,000 for bodily injury/death for one person
• $60,000 for bodily injury/death for more than one person
• $10,000 for property damage liability

How much does commercial auto insurance in California cost?

Any small business owner knows a little savings goes a long way! Several factors will influence the cost of your commercial auto insurance in the Golden State. After all, a taco food truck operating in Downtown LA will likely have a different coverage rate than a multi-vehicle lawn care company running out of Anaheim.

Insurance companies may consider any of the following factors when determining your coverage rate:

• Your business’s industry
• The make and model of your company vehicles
• The driving history of your employees
• The type of cargo you plan to carry or deliver
• The location/zip code of your business
• Your business’s travel radius
• Your policy deductible and limits
• Your business’s claim history

Luckily, there are ways to land some significant commercial car insurance discounts. Your IIA agent can work with you to discover an affordable policy and help you score discounts that can potentially reduce your coverage expenses.

Contact one of our licensed providers to discuss your eligibility for potential discounts such as:

• Multi-vehicle - Earn savings by insuring multiple vehicles under one policy
• CDL experience – Take advantage of discounts applied to bodily injury, property damage, medical payments and collision coverage for drivers accumulating 2 or more years of experience measured by the date they were originally issued a commercial driver’s license. Please note this discount only applies to heavy, extra heavy and medium weight class vehicles.
• Business experience - Score savings by showing your business has a great financial track record.
• Commercial General Liability (CGL) - Obtain savings through your bodily injury, property damage, medical payments, comprehensive, FTC, and collision coverages when proof of a commercial general liability policy is provided by the named insured.
• Proof of insurance – If you can prove that you’ve carried insurance coverage in the past, you may be able to score discounts on your new coverage. 

IIA coverage options for businesses in California

Your company’s vehicle operations are only one small part of running a successful small business. In addition to commercial car coverage, it can be helpful to explore other types of coverage options for businesses in California. Many business owners find peace of mind in investing in commercial general liability insurance (CGL). This type of insurance can help mitigate some of the risks and liabilities associated with running a small business. General liability insurance can help shield businesses from financial losses related to third-party claims of bodily injury, property damage, and personal or advertising injury.  

Other additional options provided by IIA that can extend a wider network of coverage to your small business’s commercial vehicle operations include:

• Collision coverage
• Comprehensive coverage
• Uninsured / Underinsured motorist coverage