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Average Cost of Commercial Auto Insurance

This article was reviewed for factual accuracy by Brian Halbert CFP

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.

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How Much Does Commercial Auto Insurance Cost?

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.

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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:

Here are some other cost guides related to business auto insurance:

How Much Does Commercial Car Insurance Cost by State?

According to Sarah George of Finder.com your 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:

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:

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:

Commercial Auto Insurance:

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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It was a really interesting read. However, would love to learn more on the differences of policies based on commercial and personal auto insurance. Looking forward to read more.

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