Haris Ashley
The cost of commercial auto insurance varies depending on several factors, including the type of work, the number of vehicles, the state where the business operates, and the driving history of the employees. Small businesses pay an average premium of $147 per month or $1762 annually. The national average monthly cost for commercial auto insurance through Progressive ranged from $215 for contractor autos to $1125 for for-hire transport trucks. NEXT, another insurance company, offers commercial auto insurance starting at $12.50 per month or $150 annually for businesses such as yoga instructors and accountants.
| Characteristics | Values |
|---|---|
| Average monthly cost | $135-$188 |
| Average annual cost | $1,620-$2,256 |
| Average cost for small businesses | $147 per month or $1,762 annually |
| Average cost for yoga instructors and accountants | $12.50 per month or $150 annually |
| Average cost for business auto customers | $226 per month |
| Average cost for contractors | $215 per month |
| Average cost for for-hire transport trucks | $1,125 per month |
| Average cost for tow truck businesses | $534 per month |
What You'll Learn
The average cost of commercial auto insurance
The type of work you do influences the cost of insurance. For example, a mortgage broker's insurance will likely be lower than that of a roofing contractor, as the nature of their work involves less driving. Similarly, jobs that include driving to job sites, such as carpenters, tend to have higher insurance costs.
The number of vehicles is another critical factor. The more vehicles a business owns, the higher the insurance cost. Additionally, the make, model, and year of the vehicles, as well as how often and how many miles they are driven, impact the premium.
The state where the business operates also matters. Small businesses in areas with a higher risk of natural disasters, higher property prices, and more crime tend to pay more for insurance.
The cost of commercial auto insurance is also influenced by the business's loss and claims history. A business with a history of claims or accidents may see an increase in their premium.
The coverage limits and deductible chosen will also affect the premium. Higher coverage limits will increase the cost, while opting for a higher deductible will lead to a lower premium.
It's worth noting that commercial auto insurance is required by law in most states and is essential for businesses that own vehicles to protect themselves from accidents, theft, and damage.
Insurance Gaps: Hidden Costs Revealed
You may want to see also
How much you'll pay per month
The cost of commercial auto insurance varies depending on several factors, including the nature of your work, the number of vehicles, their value, and their business use. The cost of insurance is also influenced by the state in which you operate, with more populated areas and those at risk of natural disasters generally having higher premiums.
Small businesses pay an average premium of $147 per month, or $1,762 annually, for commercial auto insurance. However, this can vary significantly depending on the specific circumstances of your business. For example, 37% of small businesses pay less than $100 per month, while 26% pay between $100 and $200 per month.
The type of coverage you choose will also impact the cost. Auto liability coverage, which is required by law in most states, is the lowest-cost option and provides limited coverage for physical damage to other vehicles or property, and medical expenses from bodily injuries to another party. Comprehensive coverage includes all that is covered under auto liability coverage, plus theft and damage due to weather, vandalism, or fire. Additional endorsements like uninsured motorist coverage will further increase your premium.
The cost of commercial auto insurance is also influenced by the number of vehicles you have, how often you drive, the miles you drive, and the make, model, and year of your car. If your work involves driving to job sites or transporting clients, your insurance costs will likely be higher.
Your driving history and record of losses and claims will also impact your insurance fees. A longer period of driving without an incident will generally result in lower insurance rates.
To give a few examples of the cost of commercial auto insurance for specific professions:
- The average monthly rate for business auto customers, including cleaning services, restaurants, and shops, is $226.
- The average rate for contractors, subcontractors, and independent tradespeople, including carpenters, electricians, landscapers, and painters, is $215 per month.
- The average monthly commercial truck insurance cost varies by vehicle and load type. For-hire transport trucks have an average monthly premium of $1,125, while for-hire specialty trucks cost an average of $736 per month to insure.
- The average monthly cost for a new tow truck insurance policy is $534.
Gap Insurance: Why You Still Owe
You may want to see also
Variables that factor into the cost
The cost of commercial auto insurance is determined by a multitude of factors, each of which contributes to the overall risk assessment that insurance providers use to calculate premiums. Here are some of the variables that factor into the cost of commercial auto insurance:
Nature of Work
The type of work you do and how you use your vehicles will impact the cost of insurance. For example, a mortgage broker who drives less for work will likely pay less than a roofing contractor, who drives more frequently and to different job sites. Carpenters, who drive to work on other people's property, may face higher insurance costs due to the increased risks associated with their profession.
Number of Vehicles
The number of vehicles you own or insure under your business will also affect the cost of insurance. For instance, a cleaning company with three cars will have a higher insurance cost than a solo cleaner with only one car.
Mileage and Driving Frequency
How often you drive and the number of miles you drive are important factors in determining insurance costs. More time spent on the road increases the risk of accidents, which will be reflected in higher premiums. Additionally, factors such as the make, model, and year of your vehicle can influence the cost of insurance.
Location
The state or region where you operate your business can significantly impact insurance costs. For example, a small business owner in Miami is likely to pay more for insurance compared to someone in a small town in Minnesota due to factors such as natural disasters, property prices, and crime rates.
Loss and Claims History
Your record of losses and claims will influence your insurance fees. If your business has a history of backing over mailboxes, for example, you may see an increase in your premium at renewal time.
Coverage Limits and Deductibles
The coverage limits you choose will impact the cost of your insurance. Higher coverage limits will provide more protection but will also result in higher premiums. On the other hand, choosing a higher deductible can help lower your insurance costs. The deductible is the amount you pay before your insurance coverage kicks in.
Driving History
The driving history of anyone operating a company vehicle is a crucial factor. A clean driving record with no claims or incidents will generally result in lower insurance rates. Conversely, a history of collisions, speeding tickets, or severe infractions like DUI convictions will lead to higher premiums.
Gap Insurance Tax in New York
You may want to see also
How to reduce commercial auto insurance costs
The cost of commercial auto insurance varies depending on several factors, including the type of work, the number of vehicles, driving history, and location. To reduce commercial auto insurance costs, consider implementing the following strategies:
Risk Management Techniques
Provide regular driver training to improve skills, teach defensive driving techniques, and promote safety awareness. This can significantly reduce the likelihood of accidents and subsequent insurance claims. Additionally, establish a rigorous maintenance schedule for your commercial vehicles, including regular inspections and repairs, to identify potential issues and reduce the risk of accidents.
Safety Equipment and Technology
Install safety equipment such as GPS tracking devices, dash cams, and telematics systems in your commercial vehicles. These technologies can help monitor driver behaviour and identify risky driving patterns, potentially leading to insurance discounts.
Multi-Vehicle Discounts
If you have multiple vehicles, consider insuring them under a single policy to qualify for a multi-vehicle discount, resulting in lower premiums.
Good Driver Discounts
Encourage and reward your drivers for maintaining a clean driving record with no at-fault accidents or traffic violations. This can make them eligible for good driver discounts offered by insurance companies.
Policy Bundling
Bundle your commercial auto insurance with other policies, such as general liability or property insurance, from the same provider. This strategy can lead to significant discounts on your premiums.
Higher Deductibles
Opting for a higher deductible can lower your insurance costs. A deductible is the amount you pay before your insurance policy starts contributing. However, ensure you have enough funds set aside to cover the deductible in case of an accident.
Acura Leases: Gap Insurance Included?
You may want to see also
How commercial auto insurance cost is calculated
The cost of commercial auto insurance is calculated based on several factors, including the nature of the business, the number and type of vehicles, driving history, and the level of coverage required.
Nature of the Business
The type of work done by the business influences the cost of insurance. For instance, a mortgage broker's insurance costs will likely be lower than a roofing contractor's as the former involves less driving for work. Similarly, jobs that require driving to various job sites will generally have higher insurance costs. The location of the business also matters; a small business in Miami will likely pay more for insurance than one in a small town in Minnesota due to the higher risk of natural disasters and higher property prices and crime rates.
Number and Type of Vehicles
The number of vehicles a business owns or insures will impact the cost of commercial auto insurance. For example, a cleaning company with three cars will pay more than a solo cleaner with one car. The make, model, and year of the vehicles are also taken into account when calculating insurance costs.
Driving History
The driving records of the business owner and employees will influence insurance costs. A history of claims, collisions, and speeding tickets can result in higher premiums. Additionally, the number of years driven without an incident will impact insurance rates, with longer periods of incident-free driving resulting in lower costs.
Level of Coverage
The level of coverage chosen will also affect the cost of commercial auto insurance. Higher coverage limits will increase the cost of the policy. This includes choosing coverage for a wider range of damage, such as collision coverage or comprehensive coverage for repairs.
Other Factors
Other factors that can influence the cost of commercial auto insurance include the vehicle's parking location, the presence of safety and anti-theft features, and the amount of the deductible.
Commercial auto insurance costs can vary significantly depending on these factors, with monthly costs ranging from under $75 to over $200, and an average of around $150 per month for small businesses.
Utah's Vehicle Insurance Laws: Owner Security
You may want to see also
Frequently asked questions
Small businesses pay an average premium of $147 per month, or $1,762 annually. However, the cost varies depending on factors such as the number of vehicles, their value, and their business use.
The cost of commercial auto insurance varies depending on the profession. For example, contractors and subcontractors pay an average of $215 per month, while businesses that use vehicles for commercial and personal errands, such as cleaning services and restaurants, pay an average of $226 per month.
The cost of commercial auto insurance is influenced by several factors, including the type of work, the number of vehicles, how often and how far they are driven, the state where the business operates, the business's record of losses and claims, the coverage limits, and the driving history of the employees.
Businesses can reduce the cost of commercial auto insurance by keeping their risk level low, choosing the right limits and deductible, and bundling multiple policies together.
