If you’re a contractor, small business owner, delivery driver, or manage a small fleet, you may be looking for low-cost commercial vehicle insurance. Commercial auto insurance could be an important investment as it can help deal with high expenses that may come after a covered traffic accident involving your business vehicle.
If you’re wondering how much you might pay for a commercial vehicle policy, use Infinity Insurance Agency, Inc. (IIA)’s commercial auto insurance calculator to get an estimate or call IIA today for customized help.
Let’s discuss why you might need commercial vehicle insurance over personal car insurance, which coverages you may need, and some ways to lower your business auto insurance policy.
Why personal auto insurance won’t cover business vehicles
Personal car insurance policies generally won’t cover you if you use your vehicle for business purposes. Business purposes mean you use your vehicle to complete tasks that generate income. Commuting to work is generally not considered a business purpose. Here are some examples of using your car for business purposes:
- Driving your truck to landscaping sites
- Delivering food, packages, or goods for a business
- Driving a food truck
- An electrician or handyman driving to multiple client locations
- Transporting tools to deliver services, like cleaning or dog grooming
- Driving a trailer transporting goods
- Driving a van displaying wraps or your business logo on decals
These are just some examples. If you aren’t sure whether you’re using your vehicle for business purposes, speak with a trusted auto insurance agent. If you drive your car for business use without commercial insurance and you get into an accident, your carrier may deny your claim, leading to high financial losses.
Commercial policies typically cover liability insurance, which means your policy helps offset the cost of bodily injuries or property damage you cause others during a covered accident while driving your business vehicle.
If you opt for more coverage, your policy can also cover the costs of damage to your vehicle and medical expenses arising from a covered accident. IIA works with 20 insurance carriers that offer affordable and customizable commercial car insurance as well as flexible options for small business owners.
Cost of commercial auto insurance
The price of your tailored commercial auto insurance policy will vary depending on your location, business profile, and the insurance carrier you choose. Some businesses could pay at least $2,000 a year, according to MarketWatch.
Here are the factors that affect the cost of business vehicle insurance:
- The type of business: Freight and trucking companies tend to pay more than other businesses because they drive longer distances and have a higher accident exposure. On the other hand, a gardener might pay less since they drive a smaller vehicle for shorter distances.
- The number of vehicles and employees: A business with a larger fleet will generally pay higher premiums. Additionally, if any employees drive company cars, they generally get added to the policy.
- Limits and deductibles: If you opt for higher limits than required, your premiums might be more expensive, but you have a larger financial safety net in case of covered accidents. Choosing a higher deductible can lead to cheaper premiums. However, since your coverage kicks in after you pay the deductible out of pocket, this expense should be within your business budget.
- Location: Each state has different car insurance requirements. For example, according to the California DMV, commercial and private drivers are required to carry minimum liability insurance with these limits: $30,000 for bodily injury or death of one person, $60,000 for injury or death to more than one person, and $15,000 for property damage to another person.
Commercial auto coverage options
You can build your business vehicle insurance policy with a variety of coverages, including:
Liability Insurance: Required in most states, this coverage helps pay for bodily injuries or property damage you cause others during a covered accident. It includes the state-mandated minimum limits, and business owners can choose higher limits if they want to purchase more coverage.
Depending on the insurance company and state, you can add the following optional coverages to your policy:
- Collision: This coverage may help pay for your business vehicle’s repairs or replacement if you’re involved in a covered traffic accident, regardless of who is at fault.
- Comprehensive: This coverage may help pay for car repairs or replacement if your car has been damaged by an event other than a car crash. Covered events may include:
- Vehicle theft or vandalism
- Extreme weather events like storms or hurricanes
- Animal damage, for example, if your truck accidentally hits a deer
- Falling objects, like tree branches
- Uninsured/Underinsured Motorist: This coverage helps pay for injuries you, your passengers, or your employees sustain if they are in a covered accident with an at-fault driver who has no car insurance or not enough insurance.
- Medical payments: This add-on may help pay for medical bills or funeral expenses after a covered accident, regardless of who is at fault. It’s available in some states.
- Hired and non-owned auto (HNOA): This is a type of liability coverage that helps pay for injuries or property damage to others when an employee uses their personal vehicle for work tasks or when you rent a vehicle and use it for business purposes. It doesn’t cover damage to the employee’s or the rented vehicle.
Tips to lower the cost of commercial auto insurance
As a small business owner or contractor, you may be looking to save on your commercial car insurance. Here are some ways you could lower your premiums:
- Compare quotes yearly: Rates vary between carriers. Comparing rates may show that you need to adjust your policy or that you may find a better deal.
- Bundle business policies: Some insurance companies offer bundling packages. You could bundle your business auto insurance with commercial general liability (CGL), which is required in some states.
- Adjust your deductible: Choosing a higher deductible often leads to lower insurance premiums. Just make sure that your business can afford this expense, since you’ll need to pay the deductible before insurance kicks in after a covered accident.
- Keep clean driving records: Your premiums may be lower if you and your employees maintain clean driving records or take safe-driving programs to show proactive steps to drive responsibly.
- Choose the right policy for your needs: Working with an agency like IIA gives you the chance to discuss your business needs in detail with an agent, so they can help you choose the right option for you.
Get lower business vehicle insurance costs with IIA
IIA works with a wide range of providers to help you shop smarter. Our commercial partners offer customizable coverage and flexible payment options that fit small business budgets.
Use our online commercial vehicle insurance estimate calculator to get an idea of how much you may pay. To explore your commercial car insurance options, call IIA today at 1-855-478-3705 and speak with one of our Spanish-bilingual agents.