Cheap Commercial Auto Insurance: Get a Quote at the Right Price

Business-owned vehicles need to be insured before being driven on roads, just like private cars, and commercial auto insurance is the best option to protect your fleet of vehicles used for commercial purposes. For that, your business needs to keep aside an adequate budget for commercial auto insurance.

The drastic increase in the number of accidents has caused the cost of commercial auto insurance to increase over the last few years. Consequently, companies need to compare quotes to find an affordable insurance option for their vehicle fleet. To do so, it is essential to first know what commercial auto insurance is, how to get an affordable policy, and the factors affecting its cost.

Commercial Auto Insurance: A Basic Overview

Similar to car insurance for private vehicles, commercial auto insurance consists of policies that cover the expense of injuries and damages. The damage can only be covered if it is caused by you or should happen to you or your employees while the vehicle is being used for business purposes. The coverage for the damage extends up to the limits of the insurance policy you have chosen.

Every company that owns vehicles should have commercial auto insurance regardless of their type. Almost all states in the U. S. legally require business-owned vehicles to have comprehensive commercial auto insurance coverage.

Even though the drivers of the vehicles are technically responsible for any damages they cause, it is essential to get insurance to potentially save expenses of medical bills and other repairs.

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Why is commercial auto insurance important?

Accidents are unpredictable and any vehicle can get into one at any time. Therefore, it is essential to prepare your business beforehand to face such financial calamities. By purchasing a commercial auto insurance policy, you are protected against several insurance risks.

Even though you may have personal car insurance for your vehicle, it is still important to get your commercial assets, i.e., vehicles protected in the long run. You also need to pay careful consideration to its cost and make an effort to minimize the cost by comparing quotes from several different companies and taking advantage of discounts.

Cheap Commercial Auto Insurance: How much does it cost?

Since commercial auto insurance covers vehicles owned by businesses and used for business purposes, commercial auto insurance in most states is more expensive than personal car insurance. The average cost of commercial auto insurance is $142 per month or $1,704 per year, for a policy limit of $1 million. Compared to large businesses that own massive fleets of vehicles, small business owners often pay less than $1,500 per year for commercial auto coverage.

Auto Insurance: Private vs. Commercial

Although private and commercial auto insurance offer similar coverage options, there is a huge difference between the two. Private insurance is relatively cheaper than commercial insurance because personal policies usually cover one person and the vehicle that they are driving. On the other hand, vehicles covered under commercial auto insurance are used for business purposes and therefore are more susceptible to accidents, driving up the cost of insurance.

Standard Rates

The standard commercial auto insurance rates across the U. S. vary from a minimum of $600 to a maximum of $2,400. The cost of insurance varies from company to company and differs greatly due to several factors.

Average Rates by State

The average rate of commercial auto insurance also differs with each state. In California, the average price range is $574 to $1,804, whereas in Florida it is $2,565 to $3,370. In Maine, it is $486 to $1,268, and in Michigan, it is $5,282 to $8,723. In Minnesota, the average insurance cost ranges from $983 to $2,271, while in Montana it is between $641 and $2,525.

The average rate of commercial auto insurance is $55 per month or $662 per year. However, you should carefully consider the coverage you are selecting as it will have a huge impact on your commercial auto insurance costs. Since there are several different coverage options to choose from, ensure that you get the right quote from a reliable commercial auto insurance company.

How to get a good quote from a commercial auto insurance company?

The insurance policy you choose will benefit your business significantly. Therefore, you need to put the required thought and consideration into buying an affordable policy that covers all of your coverage requirements. To get a good quote for cheap commercial auto insurance, you can do the following:

Take Advantage of Discounts

Many insurance companies provide coverage at an affordable rate for small business owners and give discounts for commercial vehicle insurance. Additionally, you can get discounts for paying via electronic payment, conducting upfront payments, and opting for policy bundling.

Maintain a Clean Driving Record

Your driving history is one of the factors that can significantly impact your rate. A small history of violations or consistent records of accidents and misdemeanors can affect the rate of coverage. The rates can remain low if you and your employees have safe driving habits. You can improve your driving record by adhering to all traffic rules and avoiding accidents.

Adjust Coverage Limits and Deductibles

Another way to save on your commercial auto insurance rate is by adjusting your coverage limits and deductibles. You could decrease your combined single limit, thus lowering your coverage for multi-person accidents. You can also opt to get cheaper commercial auto insurance by increasing your physical damage deductible since a higher deductible requires you to pay more out of pocket after a covered accident.

When you are getting commercial auto insurance, your focus should be on finding a policy that is cost efficient, but at the same time offers comprehensive coverage and added benefits. To pick the right insurance policy, you need to first look at the rates of policies from different companies. You can also compare carrier ratings and choose a company that is trustworthy and has a high ranking. Compare policy limits and the annual deductible you will have to pay. Once that is done, make sure you read the policy’s fine print to find any details that you may have previously missed.

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Factors Affecting the Cost of Insurance

The cost of commercial auto insurance is determined by various factors that business owners need to consider as they are comparing policies. These include the following.

Number of Vehicles

Commercial auto policies will often charge a percentage of the vehicle or fleet value for property damage coverage. Therefore, protecting just one or two commercial vehicles will cost less than having insurance for a dozen semi-trucks. The cost of your auto insurance will vary with the number of vehicles you are choosing to insure.

Vehicle Type and Its Value

Another factor that affects the cost of insurance is the size of your commercial vehicles. Large trucks can cause much more damage than cars used for standard deliveries. Therefore, the cost of insurance also varies with each vehicle type.

Amount of Coverage

A higher coverage limit poses a lower financial risk for your business. However, a larger coverage results in higher monthly or quarterly rates. To reduce the amount, you can select from a wide range of coverage types for commercial auto insurance, and choose one that aligns with your business budget.

Driving Distance

The distance your vehicle will travel every day for business-related matters also affects the cost of its coverage. You may have to pay more for commercial auto coverage if your drivers travel long distances or frequently make interstate trips.

Claims History

You will most likely pay a lower rate if your business has had few or no commercial auto insurance claims in the past.

Policy Deductible

You can access lower insurance costs if your business can afford a higher out-of-pocket deductible in case of a claim.

Type of Industry

Companies that are associated with a high risk of accidents pay more for auto insurance than those in industries associated with a lower auto accident risk.

Number of Employees

The number of employees you employ at your business also plays an important role in determining the cost of your insurance.

Best Cheap Commercial Auto Insurance Companies

Different companies specialize in providing commercial insurance to specific vehicles. The insurance company you choose plays an important role in determining the affordability of the policy. Here are a few of the most popular and affordable commercial auto insurance companies to choose from.

Progressive Commercial

Progressive Commercial is the best option for businesses as it provides customizable coverage for autos, trucks, and trailers. It provides a convenient service that includes online quotes, claims, and several discount options. Since its expertise lies in insuring commercial vehicles, it also provides fleet management tools to businesses with three or more vehicles. Its average cost for commercial auto insurance in 2020 was $188/month for business vehicles and $186/month for contractors.

Liberty Mutual Insurance

Liberty Mutual Insurance is one of the largest insurance companies globally. It specializes in providing its commercial products and services to small businesses. Customer satisfaction is one of its strengths, and it offers insurance for large fleets of vehicles. It also specializes in risk-control services providing safety training for drivers.

The Hartford

The Hartford has a wide range of services for companies and covers a wide range of commercial vehicles. It employs a program that identifies the potential causes of accidents. Its primary focus is to offer services and strategies that improve the safety of drivers. The Hartford also offers online claims reporting for the increased convenience of its clients. The average cost of commercial insurance in eight industries was around $1,500, which is higher than the median.

Geico

One of the most popular insurance companies, Geico also ranks in the topmost positions for commercial car insurance. It provides convenient online auto insurance quotes, as well as online policy access. This company is preferred by many businesses as it provides customized policies for fleets of all sizes and offers coverage for cars, vans, trucks, and other vehicles. However, it does not cover semi-trucks and tractor-trailers. Since the price of insurance depends on various factors, Geico offers free online quotes to its clients.

Auto-Owners Insurance

Although Auto-Owners Insurance operates in a limited number of states, it is still one of the most affordable options for commercial auto insurance. It operates through independent agents and covers recently purchased vehicles. It offers a variety of discounts for companies with multiple policies, policies paid in full, and fleets that are monitored by telematics. Auto-Owners Insurance also offers seasonal discounts for vehicles used for farming.

How to choose cheap commercial insurance?

Whether commercial auto insurance is mandatory in your state or not, it is essential to choose an affordable commercial insurance policy that can protect your vehicles, the biggest asset of your business. It prevents you from spending excessively while getting the best value for money.

Before you buy commercial auto insurance, ensure that you conduct thorough research, and wisely compare quotes from different companies. You can also calculate the average commercial auto insurance rate to know if your company is charging you more, or if the deal is an advantageous one.

Use our free car insurance comparison calculator to know which commercial policy is the most affordable, considering your business requirements.

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Case Studies: Fictional Scenarios Based on Real-World Situations

Case Study 1: Cheap Commercial Auto Insurance

It can use liability insurance to protect a bakery owner. One day, the bakery’s delivery driver accidentally runs a red light and collides with a pedestrian, resulting in injuries and property damage. The injured person may sue the bakery for medical expenses and pain and suffering.

In this case, liability insurance would cover the bakery’s legal defense costs, medical expenses, and the cost of any settlements or judgments up to the policy limit. Without liability insurance, the bakery owner might have to pay these expenses out of pocket, leading to significant financial hardship.

Case Study 2: Cheap Commercial Auto Insurance

It can also provide comprehensive insurance coverage for a fleet of vehicles owned by a plumbing company. One of the plumbing company’s vans is parked near a client’s property when a massive hailstorm hits the area. The van suffers severe hail damage, with broken windows and dented panels.

Thanks to comprehensive insurance, the plumbing company can get the van repaired promptly without facing a substantial financial burden. Without this coverage, they might have to pay for the repairs themselves or even replace the vehicle entirely.

Case Study 3: Cheap Commercial Auto Insurance

It can assist a small package delivery business by offering uninsured/underinsured motorist coverage. Suppose one of the delivery drivers is making a stop, and another driver rear-ends the delivery vehicle and flees the scene, unable to be traced later. The delivery driver sustains injuries that require medical attention.

Since the at-fault driver is uninsured, uninsured/underinsured motorist coverage comes into play. It helps cover the medical expenses and any lost wages for the delivery driver, ensuring that the business doesn’t bear the full brunt of the costs.

Case Study 4: Workers’ Compensation Insurance

It can also be essential for a Cheap Commercial Auto Insurance client. Let’s consider a scenario where a home cleaning company employee is involved in an accident while traveling to a client’s location. The employee fractures their arm, leading to medical expenses and time off work to recover.

Workers’ compensation insurance would cover the employee’s medical costs and provide wage replacement during their absence from work. This not only protects the employee but also safeguards the interests of the commercial auto insurance client from potential lawsuits related to workplace injuries.

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