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If you’re a small business owner or independent contractor who uses a vehicle for work, your personal auto insurance policy might not totally cover your car. You may need commercial car insurance. Insurance companies create special policies for commercial vehicles — and even if you use your car for both commercial and personal reasons, you might not have as much coverage as you think.
Read on to learn everything you need to know about commercial car insurance and decide whether you need to “up” your policy.
Table of Contents [Show]
- Best Commercial Car Insurance
- Difference Between Commercial and Regular Car Insurance
- What Does it Cover?
- Additional or Optional Coverage Types
- What You’ll Expect to Pay
- Is Commercial Car Insurance Required?
- How to Get Commercial Car Insurance
- What to Look for in a Company
- Protecting Your Business and Employees
Best Commercial Car Insurance
Not sure where you should start searching for insurance? Consider one of our favorite providers first.
1. Best for Comparing Quotes: CoverWallet
CoverWallet’s commercial auto insurance can protect you and your business from accidents and injuries. There are many different factors when considering your monthly insurance rate but keep in mind insurers look for the following:
- Driving records
- What is being transported
- The vehicle
- Coverage amounts needed
- What type of coverage
Get a custom quote today to see what your premium might be.
Shopping for business insurance can be a tedious process. It takes time to collect and review quotes and coverage unless you visit CoverWallet. CoverWallet, an Aon company, makes it easy to get quotes from multiple insurance providers.
With CoverWallet, you can start by talking with an insurance advisor or start directly with quotes. You can get quotes from multiple reputable insurers, including Hiscox, Chubb and Progressive. Choose from a wide range of coverage options to protect every area of your business, including workers’ compensation, general liability and commercial property insurance.
Once you decide on your insurance coverage, you can manage your policies through MyCoverWallet. This online dashboard allows you to send copies of your insurance certificates when needed, file claims and pay premiums. It keeps your policies organized and allows you to reach out to an expert at any time.
CoverWallet also offers extensive educational resources. You can review its recommended coverage by industry. You can also dig into more specific information based on your industry, location, number of employees and annual revenue.
The one drawback to the CoverWallet is that it doesn’t have a mobile app. You can still access the site through your mobile browser and you can call any time for assistance. Overall, CoverWallet makes it easy to shop for and buy business insurance, and it’s an excellent fit for small businesses and the self-employed.
- Small to medium businesses
- Can get multiple quotes easily
- No mobile app
2. Best for Discounts: Esurance
From the chilly mountains of Alaska to the warm bayous of Louisiana, Esurance offers commercial auto insurance to most states in the country and understand what business owners need.
In addition to a wide scale of operation, Esurance also offers drivers a number of ways to save on premiums. Esurance offers a host of discounts even for commercial vehicle policies. You can get a discount for maintaining a clear claims record, having employees take defensive driving courses and even for adding roadside assistance to your package.
Esurance’s list of add-ons is also impressive and policies can be individualized to suit business owners’ unique needs. With an easy quote process, wide availability and simple-to-use discounts, Esurance is our top choice for commercial auto insurance.
3. Best for Fleets: Progressive
If you still aren’t sure whether you need commercial insurance or not, your first stop should be to Progressive’s website.
Progressive has created an incredibly informative site, complete with a quick quiz you can take to decide whether you’re covered under your personal auto insurance policy.
Progressive’s commercial policies are generous, with policy limits high above their personal options. This can make the company an appealing choice for business owners who need to insure high-value or very heavy vehicles.
Like other insurers, Progressive also offers a number of discounts and savings for bundling — and with insurance available for everything from homes to commercial trailers, almost everyone can find a way to save with Progressive.
Progressive auto insurance is among the first of the larger insurers to actively embrace usage-based insurance via electronic monitoring of driving habits. Often a refuge for younger drivers and drivers who have been refused insurance elsewhere, progressive markets and supports its insurance products through its website and a network of independent agents.
- Young and less-experienced drivers
- Drivers with consistently good driving habits
- Rates for good drivers
- RV drivers
- More welcoming to less-experienced drivers
- Great website and mobile app functionality
- Driving based discounts can be generous
- Relatively smaller agent network may leave some without a local agent
- Rates can increase at renewal based on driving data from Progressive’s Snapshot.
4. Best for Employees: Nationwide
Nationwide’s commercial insurance policies are all about simplicity. You can request a quote in just a few minutes using Nationwide’s online form, and its streamlined claims process makes filing after an accident easier.
Nationwide offers an impressive range of policies and coverages and even has coverage available for employees who use their personal cars for business, a loophole that some other companies overlook.
Nationwide’s “On Your Side Repair Network” pre-screens and hand-selects repair shops to make sure commercial vehicle owners get quality and affordable repairs. If you need insurance fast but don’t want to sacrifice quality, Nationwide might be right for you.
Nationwide is one of the most popular insurers in the United States, offering vehicle, property, life and specialty coverage as well as other types of policies.
If you’re looking for an insurance provider that offers the most discounts, Nationwide might be first on your list. Nationwide offers 9 unique ways to save on your insurance.
For example, save on your car insurance by staying accident-free. Or, save on the overall cost of your policy by paying your entire premium in full.
- Offers rv and personal watercraft insurance
- Usage-based car insurance
- No mobile app
What’s Commercial Car Insurance?
Commercial car insurance is a special type of coverage for cars, trucks and vans that you use for work. Commercial car insurance policies cover activities, trips and vehicles that aren’t covered under your personal auto policy.
If you use any kind of vehicle you own for business or work (with the exception of commuting), you probably need some kind of commercial insurance policy. This is especially true if you rely heavily on your vehicle for work, whether you have a company car or commercial trucks.
Box trucks, food trucks, work vans and service utility trucks are all examples of vehicles that require coverage.
Difference Between Commercial and Regular Car Insurance
Most car insurance policies are rated for personal use. Commercial policies include a wider range of coverage and coverage for more types of vehicles. If you’re a sole proprietor and you only have one car, you may only need personal auto insurance.
However, if your business owns a specialized type of car, truck or van, you’ll probably need a commercial policy. You’ll also usually need a commercial policy if you haul large amounts of raw material or product in your vehicle or if you use your vehicle to transport customers.
Commercial car insurance and regular car insurance are very similar, and you’ll see a lot of the same coverage types between the two. Commercial car insurance policies tend to be more expensive but also have the capability to do much more damage in an accident, so liability limits are higher.
For example, if you own a towing company and you have a vehicle with a crane attached, a commercial policy would cover damage to your crane while a personal policy would not.
Besides higher liability limits, commercial policies may also include additional coverage options not available with personal policies. You may add on insurance for trailers you haul as well as vehicles you drive that are rented or leased by your company. Maintaining a single commercial rental policy is usually less expensive than buying a new policy every time you rent a vehicle, so this can be a great option for business owners who don’t own their commercial cars, vans or trucks outright.
What Does it Cover?
What’s covered under your commercial policy depends on the type of coverage you buy. Here are some of the most common types of coverage you’ll see included in commercial policies.
Bodily injury liability coverage. If you hit another person with your car and they’re injured, bodily injury liability coverage pays for their medical bills. Liability insurance is required in every state for both personal and commercial vehicles.
Property damage liability coverage. Property damage liability coverage pays for damage caused to buildings, vehicles and others’ property during an accident. Most insurance companies sell combined bodily injury and property damage packages. Liability limits are higher on commercial vehicles because these vehicles tend to be larger.
Medical payments coverage. Helps cover your health insurance deductible or other costs not covered by your health insurance after an accident.
Collision coverage. Compensates you for vehicle repair bills after an accident minus your deductible.
Comprehensive coverage. Provides compensation if your vehicle is damaged in a non-accident incident. Some common comprehensive coverage claims include theft, vandalism and damage from a natural disaster.
Uninsured/Underinsured Motorist Coverage. Unfortunately, not every driver on the road has insurance like they should. Uninsured/underinsured motorist coverage helps you pay for medical and repair bills if you’re involved in an accident with an uninsured or underinsured driver.
Additional or Optional Coverage Types
There are also some additional coverages you may want to add on.
Any auto liability. Extends your legally-mandated liability protections to any vehicles you rent or lease for your business.
Rental reimbursement. As a business owner, you might lose thousands of dollars if your commercial vehicle becomes undriveable. Rental reimbursement coverage pays for the cost of a replacement vehicle until you can get yours back on the road.
Travel trailer coverage. If you use a travel trailer to haul materials or animals, special travel trailer insurance can reimburse you if your trailer is damaged on the road.
What You’ll Expect to Pay
Specialty insurance policies for commercial vehicles are more expensive than personal vehicles. The average business owner who has commercial auto insurance pays between $1,000 and $2,000 per year.
The specific amount you’ll pay for your insurance depends on a number of factors.
- Make and model of your vehicle. The make and model of your vehicle both play large roles in determining how much your vehicle will cost to repair.
- Weight of your vehicle. Commercial vehicles may have parts that personal automobiles don’t have, such as cranes or flatbeds. Insurance companies use the total weight of the vehicle to determine how costly an accident with that vehicle would be.
- Where and how much it’s used. It should come as no surprise that the more you use your commercial vehicle, the higher your chances of getting into an accident. If you only use your commercial vehicle to occasionally drive on major roadways, you’ll pay less for your insurance than if you depend on your vehicle to venture into off-road areas every day. A common question is “the farthest distance you will travel for a job based on your business address?”
- Your deductible. Your car insurance deductible is the amount you’re required to pay toward damages before your insurance kicks in and covers the rest of the bill. If you have a higher deductible, you’ll pay less for your monthly premium and vice versa. Some companies allow you to choose a higher or lower deductible to change what you pay each month.
- Number of drivers on your policy. More drivers equal more risk for insurance companies. If you insure a number of employees on a vehicle’s policy, you may pay more for your insurance.
- Number of vehicles on your policy. Including more vehicles on your policy raises your rates. Some insurance companies offer commercial “bundling” packages that allow you to pay all of your vehicles’ premiums with a single monthly bill.
- Your location, age and gender. Just like when you sign up for a personal auto insurance package, insurance companies use demographic information to determine how much you’ll pay.
Is Commercial Car Insurance Required?
You need some kind of liability insurance to legally drive in every state. If you have a vehicle that’s only used for commercial activities (like a tow truck or a van that you use for your landscaping business), commercial insurance is required. But what if you have a vehicle that’s used for both business and personal errands?
Consider these three characteristics to decide whether you need commercial auto insurance.
- Is the vehicle owned by a business? If your vehicle is listed as property of a business, you need to have commercial insurance.
- Do you only use your vehicle for commuting? If the extent of your business usage is driving to and from your work, you don’t need a commercial policy. Your personal auto insurance protects drivers on their commute.
- How heavy is the vehicle? Some vehicles need commercial insurance policies due to their weight, regardless of how the vehicle is used and who owns it. If you have a vehicle that weighs over 10,000 pounds or has a load capacity of over 2,200 pounds, you need a commercial policy.
- Do you transport people, goods, or equipment for work in your vehicle? If you answered “yes,” you probably need a commercial policy. Depending on your job (real estate agent vs. contractor), your personal policy may cover this. Always check with your insurance agent to better determine how to insure the vehicle.
If you still aren’t sure whether you need commercial auto insurance, contact a representative from a major insurance provider. He or she will consider exactly how you use your vehicle and recommend a policy.
How to Get Commercial Car Insurance
Signing up for commercial car insurance is similar to signing up for a personal auto insurance policy.
First, research local companies and get a quote. Only request a quote from companies that operate in your area. Most insurance companies now make it easy to get a quote by answering a few questions online or over the phone.
After you have your quotes, compare policy details from each competitor. Compare more than just premium. What is your deductible and coverage limit with each policy? Are there any discounts that you can take advantage of?
When you’ve made a choice, contact the company’s representative, and he or she will finalize your insurance. If you already have commercial insurance, make sure you wait to cancel your old policy until your new policy goes into effect.
What to Look for in a Company
Look for these characteristics when you’re searching for a great commercial car insurance policy.
Add-on policies: The way you use your commercial vehicle is as unique as the way you run your business. Look for companies that offer plenty of add-ons and ways to customize your policy.
Bundling discounts: If you have a personal vehicle as well as a commercial vehicle, look for a company that allows you to bundle your policies together. This can make the higher cost of commercial insurance more manageable. You may also want to bundle your commercial insurance together with your business insurance if you have it.
Wide availability: Most insurance companies can only operate in a few states. The best commercial insurance policies offer insurance services across the country, which can be an asset for business owners who have operations in multiple states.
Protecting Your Business and Employees
Each business and business owner is different. There’s no one-size-fits-all commercial auto insurance policy because every commercial vehicle is used in a unique way.
When you’re shopping for commercial insurance, don’t be afraid to look around and get a few quotes before you decide on a policy provider. You should also reassess your auto insurance needs because as your business grows and changes, so does your liability.