Commercial auto insurance is an essential expense for many businesses. Whether you are a business owner who uses your personal vehicle for business purposes or has a fleet of vehicles used for business purposes, purchasing commercial auto insurance is imperative.
But how much does it cost? What factors go into determining the cost of commercial auto insurance? In this blog post, we will answer your questions about commercial auto insurance rates!
What is Commercial Auto Insurance?
Commercial auto insurance is business insurance that protects your business vehicles in the event of an accident or other unexpected situations. Commercial auto insurance usually includes coverage for theft, repairs, towing, and medical expenses related to an accident involving a business vehicle.
How Much Does Commercial Auto Insurance Cost?
The average cost of commercial auto insurance is determined by several factors, including the make and model of your business vehicles, the number of business vehicles you have, your business's driving history, and other business characteristics. Generally speaking, business auto insurance rates range from $3,000 to $7,000 per year, depending on the coverage options and business factors.
Business owners can find the best policy for their business by researching business auto insurance rates at an affordable price. With careful consideration, business owners can get the coverage they need to protect their vehicles and drivers.
Factors That Affect Commercial Auto Insurance Rates
Several factors determine the cost of commercial auto insurance.
These include:
Location. Businesses located in states with higher population density or traffic tend to pay more for business auto insurance than those in rural areas.
Vehicle type and value. The make and model of a business vehicle and its age, mileage, and condition can all affect business auto insurance rates.
Miles driven. Business vehicles that are driven more frequently will typically pay higher business auto insurance rates than those that are used less often.
Driving record. Businesses with drivers who have clean driving records may pay lower business auto insurance rates than those with drivers who have a history of traffic violations or accidents.
Driving history. Business drivers with a poor driving record or experience of traffic violations can expect to pay higher business auto insurance rates.
Industry. The business industry may also affect business auto insurance rates. Businesses that operate in higher-risk industries may experience higher business auto insurance costs than those in lower-risk industries.
Number of vehicles.The number of business vehicles owned by a business can also affect business auto insurance rates. Businesses with more vehicles may pay higher business auto insurance rates than those with fewer vehicles.
Coverage type. The type of business auto insurance coverage selected will affect business auto insurance rates. Business owners should select the coverage that best fits their business needs while still providing adequate protection.
Who Needs to Have Commercial Auto Insurance?
Business owners who use their personal vehicles for business purposes, such as delivering goods or providing services, need commercial auto insurance. Businesses that own and operate fleets of business vehicles may also require commercial auto insurance.
It is important to note that business owners must check with their state laws to determine what type of coverage they need to be compliant.
What Does Commercial Auto Insurance Cover?
Commercial auto insurance provides coverage for vehicles that are used for business purposes, such as transporting goods, employees, or clients. This type of insurance protects businesses from financial losses resulting from accidents, theft, and other incidents involving their commercial vehicles.
Bodily Injury Liability Coverage
This type of coverage will cover medical expenses for the other party in an accident involving a business vehicle that is deemed to be the business owner's fault. It also provides coverage for legal fees that may arise from the accident.
Property Damage Liability Coverage
This type of coverage will cover any damage a business vehicle does to another person's property. This can include damage done to buildings, fences, guard rails, or other personal items.
Uninsured/Underinsured Motorist Coverage
This type of coverage will protect you if you are in an accident with someone who has no insurance or insufficient insurance to cover all the damages.
Comprehensive Coverage
This type of coverage will provide protection for business vehicles that are damaged by something other than an accident, such as hail or theft. It can also provide coverage for damage done to business vehicles due to vandalism.
Medical Payments Coverage
This type of coverage will provide medical payments for business owners or employees injured in an accident involving a business vehicle.
Collision Coverage
This type of coverage will protect business vehicles that are damaged in an accident. It will cover the cost of any repairs needed to restore the business vehicle to its pre-accident condition.
Roadside Assistance Coverage
This type of coverage will assist business owners in the event of a breakdown or other emergencies. This can include towing, jump-starts, and tire changes.
What are Optional Coverages Available?
Like any other policy, commercial auto insurance has optional coverages. These include:
Hired and Non-owned Liability
This type of coverage will provide business owners with protection in the event that an employee is using their personal vehicle for business purposes. This can include business vehicles rented on a short-term basis or other non-business-owned vehicles.
Rental Reimbursement Coverage
This type of coverage will reimburse business owners for the cost of renting a vehicle if their business vehicle is damaged in an accident.
Loaded Equipment Coverage
This type of coverage will protect business owners from business vehicles carrying heavy items or equipment, such as construction materials.
Hired Auto Physical Damage
This type of coverage will provide business owners with protection for business vehicles rented on a short-term basis. This can include damage caused by an accident, fire, vandalism, or theft.
Types of Vehicles That are Covered by Commercial Auto Insurance
Commercial auto insurance covers a wide range of vehicles that are used for business purposes. However, the coverage provided by commercial auto insurance can vary depending on the type of vehicle and its intended use.
Types of vehicles covered include:
Cars
Vans
Pickup trucks
Box trucks
Service utility trucks
Food trucks
Is Commercial Auto Insurance Required by Law?
In most states, business owners are required to have some form of business auto insurance. It is important to check with your state's regulations to determine what kind of coverage you need and what the requirements are.
Moreover, business owners should consider purchasing additional coverage beyond the minimum standards as this can provide extra protection in case of an accident or other incident.
Getting Commercial Auto Insurance Quotes and Buying Coverage Steps
Getting commercial auto insurance quotes and buying coverage can be a relatively straightforward process. This includes:
Decide which vehicles and drivers you need to insure
Business owners should first clearly identify the business vehicles and drivers that need to be insured in order to accurately calculate business auto insurance rates. This can include a business owner's personal vehicles, rented business vehicles, and any employees who are allowed to drive for business purposes.
Contact multiple insurance providers
Business owners should contact multiple insurance providers in order to compare business auto insurance rates and coverage options. This will allow business owners to find the best policy for their business at an affordable price.
TexPro Insurance offers the best-tailored policies for business owners like you.
Request quotes
Business owners can request business auto insurance quotes from each provider they contact. It is important to provide complete and accurate information when requesting business auto insurance quotes, as this will ensure that the business owner receives an accurate quote.
Compare and select coverage
Once business owners have received business auto insurance quotes from multiple providers, they can compare the rates and coverage options to determine which policy best fits their business needs. Once a business owner has selected a policy, they can purchase the business auto insurance coverage.
Purchase a policy
Once business owners have selected the best commercial auto insurance policy for their business, they can purchase it. After a business owner has purchased their business auto insurance policy, they should familiarize themselves with the coverage details as well as any applicable discounts or other benefits. Business owners should also be sure to keep copies of all documents related to their business auto insurance policy in a safe place.
Monitor business auto insurance rates and coverage
It is important to regularly monitor business auto insurance rates and coverage to ensure that business owners are getting the best value. Business owners should also review their policy periodically to ensure that it still meets their business needs and that any changes in business vehicles or drivers are reflected in their coverage.
The cost of commercial auto insurance can vary based on factors like business size and types of vehicles, but it is an important part of protecting business assets. By following the steps outlined above, business owners can get business auto insurance quotes, compare rates and coverage options, and select the policy that best fits their business needs.
How Can You Keep Your Commercial Auto Insurance Costs Down?
Keeping commercial auto insurance costs down is important for businesses that depend on and rely on their vehicles to operate. Here are a few tips you can follow:
Vet your drivers
Business owners should vet the drivers who will be operating business vehicles, as their driving record can have an impact on business auto insurance rates. Business owners should also consider implementing driver training and safety programs for business employees to help mitigate risks and lower business auto insurance costs.
Shop around
Business owners should compare business auto insurance rates and coverage options from multiple insurers to ensure they are getting the best deal. Shopping around can help business owners find the business auto insurance policy that best suits their business needs at an affordable price.
Install driving trackers
Business owners who install driving trackers in business vehicles may also be eligible for business auto insurance discounts. Driving trackers help business owners monitor business vehicle usage and limit risks, which can help lower business auto insurance rates.
Move to a cheaper home base
Location is an important factor in business auto insurance rates. Businesses located in areas that have a history of higher claims may pay higher business auto insurance rates than those located in lower-risk areas. Business owners should consider exploring business auto insurance options outside their home state to find the best business auto insurance rate for their business needs.
Limit miles driven
Limiting business vehicle usage can help business owners lower business auto insurance rates. Businesses that only drive business vehicles when necessary and limit business vehicle mileage may be eligible for business auto insurance discounts.
Ask about a business use policy
Business owners should evaluate business use policies when shopping for business auto insurance. Business use policies are designed to provide business owners with coverage for business-related activities, such as transporting goods or servicing customers. Evaluating business use policies can help business owners find a business auto insurance policy that meets their business needs and helps lower their overall business insurance costs.
Bundle policies
Many insurers offer discounts for business owners who purchase business auto insurance in combination with other business policies, such as business property insurance. Bundling business auto insurance with other business policies can help business owners save money on their overall business insurance costs.
Inquire about other business insurance bundle discounts
In addition to business auto insurance bundle discounts, business owners should ask their insurers about other business insurance bundle discounts. Many insurers offer business owners a discount when they purchase business liability insurance in combination with business auto insurance, which can help business owners save money on their overall business insurance costs.
Finding the right combination of business insurance policies for business needs while getting the most affordable business auto insurance rate can help business owners lower their business insurance costs.
Will Commercial Auto Insurance Cover a Vehicle Used for Personal Business?
The answer to this question depends on the business auto insurance policy. Some business auto insurance policies cover business vehicles used for both business and personal use, while other policies may only cover business-related activities. Business owners should speak with their insurers to determine what is covered under their business auto insurance policy.
Protect Your Business Today
Finding the right business auto insurance policy for your business needs can be a challenge. However, understanding what factors affect business auto insurance rates and taking proactive steps to manage risk can help business owners lower their overall business insurance costs.
By researching different insurers and evaluating coverage options from multiple providers, business owners may also find an affordable price on commercial auto insurance that meets their business requirements.
Ultimately, there is no one-size-fits-all answer when selecting commercial auto insurance; however, with due diligence and research, you should be able to find the best option for your needs.
TexPro Insurance is the best insurance agency and provider in Texas. Contact them today to learn more about their commercial auto insurance policy for your business.