Rental Truck Insurance: Cost And Coverage Explained

Commercial auto insurance is a significant investment for business owners. The cost of insuring a rental truck depends on several factors, including the type of truck, the business's location, the number of vehicles insured, and the driving history of the employees.

For example, the national average monthly cost for commercial truck insurance in the United States ranges from $767 for specialty truckers to $1,041 for transport truckers. However, commercial truck insurance costs can vary between $2,000 to $18,000 per vehicle per year, depending on the specifics of the business and the level of coverage required.

Small businesses, on average, pay $147 per month or $1,762 annually for commercial auto insurance. This cost can be reduced by bundling policies, maintaining a clean driving record, and increasing the deductible.

It is important to note that commercial auto insurance rates can vary across different states and insurance providers. Therefore, it is advisable to shop around and get quotes from multiple insurance companies to find the best coverage at a reasonable cost.

How much does commercial auto insurance cost?

The cost of commercial auto insurance varies depending on several factors, including the type of vehicle, the number of vehicles, the value of the vehicle(s), the business's location, and the driving history of the employees who will be operating the vehicle(s).

In 2023, the national average monthly cost for commercial auto insurance through Progressive ranged from $257 for contractor autos to $1,041 for for-hire transport trucks. However, Progressive is not the only insurance provider, and costs can vary across different companies. For example, another source states that commercial truck insurance can cost anywhere from $800 to $2,000.

Small businesses pay an average premium of $147 per month, or $1,762 annually, for commercial auto insurance. This figure is based on the median cost of policies purchased by Insureon customers from leading insurance providers.

NEXT, another insurance company, offers commercial auto insurance for as little as $12.50 per month or $150 annually for certain businesses, such as yoga instructors and accountants. However, the cost depends on several factors, including the type of work, the number of vehicles, and the state in which the business operates.

The cost of commercial auto insurance is also influenced by the desired level of coverage. Higher coverage limits will generally increase the cost of the policy. Additionally, the driving records of all drivers will impact the insurance rates, as insurance companies often have specific underwriting requirements, particularly for those operating heavy-duty trucks.

It is worth noting that commercial auto insurance is typically more expensive than personal auto insurance due to the increased coverage. Personal auto policies usually exclude work-related accidents, whereas commercial auto insurance covers both commercial and personal use.

What factors influence the cost of commercial auto insurance?

The cost of commercial auto insurance is influenced by a multitude of factors, some of which are adjustable by the business owner, while others are integral to the business and cannot be changed. Here are the key factors that impact the cost of commercial auto insurance:

• Type of Vehicle Covered: Heavier and larger vehicles, such as semi-trucks and tractors, generally have higher insurance costs due to the increased risk of causing significant damage in an accident. Newer vehicles are also typically more expensive to insure because they are costlier to repair or replace. The number of vehicles in a company's fleet also influences the cost, with larger fleets leading to higher premiums.
• Location and Operating Radius: The distance travelled by commercial vehicles plays a significant role in determining insurance costs. Longer distances and regional or interstate travel tend to result in higher insurance rates. This is because longer trips and unfamiliar routes increase the risk of accidents. Additionally, individual states have varying commercial truck insurance rates, so the location of the business can impact the overall cost.
• Type of Cargo: Different types of cargo carry different levels of risk. Heavier or more dangerous cargo will likely lead to higher insurance rates, as they can cause more damage in an accident. It is important to note that certain types of cargo, such as explosives, pharmaceuticals, and livestock, are typically excluded from standard commercial truck insurance policies and require additional coverage.
• Driving History: The driving records of the individuals listed on the policy significantly impact insurance premiums. A history of accidents or violations can lead to a dramatic increase in insurance costs, especially for larger vehicles. Maintaining a clean driving record is one of the best ways to keep insurance costs down.
• Amount of Coverage and Deductible: The amount of coverage required is directly proportional to the cost of the policy. Higher coverage limits result in higher monthly premiums. On the other hand, choosing a higher deductible can help lower the cost of monthly premiums, but it also increases the financial risk for the business in the event of an accident, as they will need to pay more out of pocket before the insurance policy kicks in.

While these are the primary factors influencing the cost of commercial auto insurance, it is worth noting that other factors, such as the age and gender of the drivers, the safety features of the vehicles, and the industry of the business, can also have an impact on the overall cost.

How can you reduce commercial auto insurance costs?

There are several ways to reduce commercial auto insurance costs. Here are some strategies to help you save money on your policy:

• Shop around for quotes: Compare rates from multiple insurance providers to find the best value for your needs. Prices can vary significantly between companies, so getting quotes from at least three insurers will help you find the most affordable option.
• Adjust your coverage: Opting for higher deductibles can lower your premium substantially. For example, increasing your deductible from $200 to $1,000 could save you 40% or more on your policy. Just ensure you have enough money set aside to pay the deductible if needed.
• Safe driving record: Maintaining a clean driving record is one of the best ways to keep insurance costs down. Accidents and violations, especially in large commercial vehicles, can lead to a drastic increase in insurance rates.
• Discounts: Take advantage of available discounts such as the Commercial Driver's License (CDL) discount, business experience discount, paid-in-full discount, or bundling multiple policies with the same insurer.
• Reduce coverage on older vehicles: If your commercial vehicle is older, consider dropping comprehensive and/or collision coverage. Purchasing this type of coverage may not be cost-effective if your vehicle is worth less than ten times the premium.
• Improve your credit rating: In many cases, insurance companies use credit-based insurance scores to determine insurance premiums. Improving your credit score can help lower your insurance costs.
• Review your policy regularly: Insurance needs may change over time, so it's important to review your policy at each renewal to ensure you're not paying for coverage you no longer need.
• Choose the right vehicle: Insuring heavier or newer vehicles can be more expensive due to higher repair or replacement costs. Opting for a smaller, lighter vehicle with good safety features may help reduce your insurance costs.
• Bundle insurance policies: Many insurance companies offer discounts if you purchase multiple types of insurance, such as homeowners and auto coverage, from them. Bundling can often lead to significant savings on your overall insurance costs.

What is the average cost of commercial auto insurance?

The average cost of commercial auto insurance varies depending on several factors, including the type of vehicle, the number of vehicles, the business's location, and the driving history of the employees.

For small businesses, the average premium is around $147 per month or $1,762 annually. However, this can range from less than $100 per month to over $200 per month, depending on the number of vehicles and the type of coverage chosen.

For commercial trucks specifically, the cost can vary significantly depending on the type of truck and the nature of the business. For-hire transport trucks have a higher average cost, ranging from $767 to $1,041 per month, while specialty trucks, such as garbage trucks or log haulers, have a lower average cost of around $767 per month.

Other factors that can influence the cost of commercial auto insurance include the value of the vehicle, the driving records of the employees, the distance travelled, and the structure of the insurance policy.

It is worth noting that commercial auto insurance rates can vary across different insurance providers, and bundling multiple policies or taking advantage of discounts can help reduce the overall cost.

What determines your commercial vehicle insurance rates?

Several factors determine the cost of commercial vehicle insurance. Here are the key factors that influence your insurance rates:

• Driving records of all drivers: Insurance companies often have specific underwriting requirements, especially for those driving heavy-duty trucks such as tractor-trailers. A history of claims, collisions, and speeding tickets can lead to higher premiums. Hiring qualified, skilled, and claims-free drivers can help lower your insurance rates and reduce risks.
• Value of the vehicle: The value of your vehicle, including cars, trucks, vans, taxis, or limousines, can impact your insurance rates. The more features and higher value your vehicle has, the higher your premiums are likely to be.
• Policy structure: Insuring your commercial vehicles under one insurance company is often more cost-effective than purchasing separate policies. Insurance companies often offer bulk discounts, especially if you have a large fleet.
• Driving location and distance: The distance you and your employees drive impacts your insurance rates. Longer distances and higher mileage increase the risk of accidents, which is a key factor in calculating commercial insurance rates. Additionally, parking your vehicle in high-crime or accident-prone areas may result in higher insurance rates.
• Type of vehicle and business: The type of vehicle and the nature of your business can affect your insurance rates. For example, a food truck, a tow truck, or a construction vehicle with valuable equipment may have higher insurance rates due to increased risks and potential for costly claims.
• Coverage limits and deductible: Higher coverage limits will result in higher insurance rates. Choosing a higher deductible can help lower your insurance costs, but it's important to ensure that the deductible is affordable when needed.
• Industry and state regulations: Your industry and the state in which your vehicle is registered can impact your insurance rates. Different states have varying coverage requirements, and certain industries, such as contractors or landscapers, may have higher insurance rates due to the nature of their work.

Frequently asked questions