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If you or your employees use a vehicle for work, you’ll likely need a type of business insurance called commercial auto insurance. While rates vary, the average policy costs around $150 to $175 per month. Of course, your costs will depend on various factors, some that you can control and others that you can’t. We’ll dive deeper into the average commercial auto insurance costs you can expect to pay for your work vehicles.
According to Insureon, the 2024 national average cost of commercial car insurance is about $150 per month for both business auto and commercial customers.
The company lists typical average monthly premiums on its site for different types of business. They reveal the following:
Another insurer, Progressive, states the average cost for commercial car insurance is $175 per month. That’s $2,100 annually.
They also list the commercial auto insurance costs for specialist types of business. The average cost paid by these SMB owners per month are:
Contractors: $172
For-hire specialty trucks: $649
For-hire transport trucks: $1,068
Tow trucks: $396
As you can see, many factors affect the average cost of commercial auto insurance, and each carrier prioritizes what it views as the most important options and coverages.
Some insurance costs are tax deductible, including commercial car insurance premiums and expenses that go beyond your deductible.
You can tell by the variation in average insurance costs that many factors affect policy pricing. Just as with choosing any type of business insurance, you have to consider many variables about your business and the vehicle you’re insuring to get an accurate quote.
These are some variables that affect commercial auto insurance rates:
To get an accurate estimate, work with your insurance carrier on a quote that considers all pertinent details about the vehicles and drivers.
The best liability insurance providers will rate your premium based on the driver with the worst driving record to cover the biggest risks. Consider assigning the drivers with the worst records to the least expensive vehicles.
Commercial auto insurance is more expensive than personal car insurance. According to PolicyGenius, the average personal auto insurance policy is about $136 per month, or $1,638 annually. With such a discrepancy, many small business owners look for ways to keep costs down, since commercial auto insurance can be an expensive line item in a budget.
Here are some tips to keep your commercial auto insurance costs down:
You can add insurance endorsements to your commercial auto policy to protect your business further. For example, you can add employee policies and blanket policies for contractors.
Don’t choose your commercial auto insurance policy based solely on price. While you want to get the best deal, it’s even more critical to ensure your business is protected from the various risks that come with driving commercial vehicles.
It’s essential to choose the proper coverage protections, including sufficient liability, comprehensive and collision coverage that will pay for damages to your vehicle – or replace it if needed. You’ll also want to get rental coverage so that your business activities don’t grind to a halt when your commercial vehicle is in the shop.
Remember that the best commercial insurance isn’t always the cheapest; it’s the one that provides the most robust financial protections for you and your business and is there for you when you file an insurance claim.
Some of the best deals are available only through brokers. Questions to ask your insurance broker, if you choose to use one, include what experience and credentials they have in providing commercial auto insurance, whether they’ll deal with the insurer on your behalf, and how customized the policy they offer you will be.
Policy limits set the maximum amount that your insurance policy will pay out in a claim related to an accident. The higher your policy limit, the more it costs your insurer, and this will push up your premiums.
The type of vehicle you insure affects how much your commercial auto insurance will cost. Passenger cars and light trucks you use for business trips or deliveries have less repair costs and attract lower premiums. Heavy trucks and specialized vehicles like cement mixers have higher repair costs, which pushes up how much you’ll pay. Buses have even higher premiums because your insurer may have to pay for multiple passenger injuries on top of vehicle repair costs if there’s an accident.
The more your vehicles are out on the road, the more expensive your insurance will be. You’ll also pay higher premiums if the types of vehicle you use cost more to repair. So, for example, a real estate agent will pay less than a hauler because they’re less likely to have insurance claims and any they do make will not be as expensive.
Your commercial auto insurance policy will cover you only for what you’ve agreed. In most cases, that’s likely to be vehicle repair costs; damage by fire, theft and vandalism; personal injury costs; and property damage costs. If you want roadside assistance or a replacement vehicle when, for example, a car is in for service, you may have to pay extra for those coverages.
Mark Fairlie contributed to this article.