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Best Commercial Auto Insurance for 2024

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Quotes available through: Insureon
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  • Commercial auto insurance is legally required for company vehicles in all states except New Hampshire and Virginia. However, drivers in these states are still responsible for any damages they cause.
  • Commercial auto insurance protects you and your employees when using company-owned vehicles.
  • Commercial auto policies include several types of coverage, such as bodily injury liability and property damage liability.
  • Commercial insurance can cover various types of vehicles: cars, pickup trucks, delivery vans, refrigerated trucks, and box trucks.
  • If you regularly drive for work or certain business-related activities, buying commercial auto insurance is important to ensure protection of yourself and company assets.
  • To find the right commercial auto insurance policy, visit our online tool to see plans and get same-day coverage.

Whether you run a small home business or operate a chain of grocery stores, if you utilize business vehicles it’s important to have the right amount of insurance coverage to stay protected.

Ensuring you have the best business insurance policy for your line of work will prevent you from having to pay thousands or even millions of dollars to settle a lawsuit, repair damaged property, or reimburse someone for injury-related medical expenses.?

We created this guide to help you understand how commercial auto insurance works, who needs it, and how it can protect your venture against significant losses.

Advertiser Disclosure
Company Name
Types of Insurance Offered
AM Best Financial Strength Score
View Plans
Progressive
Progressive
Commercial Auto
A+ (Superior)
National General
National General
Commercial Auto
A+ (Superior)
The Hartford
The Hartford
Commercial Auto - BOP - General Liability - Professional Liability - Workers' Comp - Sole Proprietors - Fidelity Bond
A+ (Superior)
Commercial Auto - BOP - General Liability - Workers' Comp - Sole Properietors
A+ (Superior)
Liberty Mutual
Liberty Mutual
Commercial Auto - BOP - General Liability - Workers' Comp - Sole Proprietors
A (Excellent)

What types of vehicles are covered by commercial auto insurance?

Commercial auto insurance covers several types of vehicles such as:

While this list is extensive, it’s important to note that certain types of machinery and equipment vehicles, like forklifts, are not included under most commercial auto insurance policies.

What’s covered by a commercial auto insurance policy?

Commercial insurance combines several coverage options into one policy.

Here’s what you need to know about each type of insurance:

1

Bodily injury and property damage liability coverage

Bodily injury liability is a type of business insurance that covers the medical bills of people injured in an auto accident caused by you or one of your employees. For example, if one of your delivery drivers hits another car while driving a business vehicle, your bodily injury liability coverage would pay for X-rays, medication, and other medical services related to the other driver’s injuries. Property damage liability coverage is a type of business insurance that covers property damage caused by you or one of your employees. For example, if you back into someone else’s shed with your company vehicle, your commercial auto insurance policy will pay for the repairs. If the damage is extensive, your insurance may pay to replace the shed. Note that you can’t use commercial insurance to cover damage that occurs when you’re driving your personal vehicle for non-business reasons.

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2

Drive other car coverage

Commercial vehicles are versatile, but there may come a time when you need to rent, borrow, or lease a different automobile. If so, consider getting “drive other car coverage”. This type of insurance extends your commercial auto coverage to a vehicle that isn’t owned by your company. For example, if you have to borrow an employee-owned vehicle, drive other car coverage will cover the cost of repairs if you get into an accident.

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3

Medical payments (MedPay) coverage

Medical payments coverage, also known as MedPay, pays your medical expenses if you’re injured in an auto accident. It also covers medical expenses for your passengers. For example, if you and an employee get into a serious accident while riding in a commercial vehicle, MedPay coverage will cover the cost of X-rays, lab tests, surgery, and other related medical services.

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4

Collision coverage

Collision coverage pays to repair or replace your commercial vehicle if it’s damaged in an accident. The good thing about collision insurance is that it covers a wide range of scenarios. For example, if someone hits your parked car and leaves the scene of the accident, your collision coverage will pay for the repairs. Collision coverage also applies when you hit a telephone pole or another stationary object.

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5

Comprehensive coverage

Comprehensive coverage pays for expenses arising from non-collision claims. For collision coverage to apply, your vehicle has to collide with something, whether it’s a guardrail, a curb, or another automobile. That’s not the only way to damage a business vehicle, however, so you need extra coverage to protect your assets. Comprehensive coverage may pay for repairs related to hail damage, fire damage, theft, and other non-collision claims.

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6

Personal injury protection (PIP)

PIP covers accident-related medical expenses without regard for who caused the accident. In some cases, this type of insurance also covers lost wages, funeral expenses, and/or the cost of hiring someone to perform household services while you’re recovering from your injuries. Some states require PIP coverage, so check with a licensed insurance agent to determine if you need to add it to your policy.

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7

Rental car coverage

If you rent a vehicle, it’s important to purchase rental car coverage beforehand. This type of insurance pays for repairs in the event your rental is stolen, vandalized, or damaged in an accident. For example, if you scratch the side of the vehicle while trying to park in a tight space, your rental car coverage will pay a body shop to fix it.

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8

Uninsured motorist (UM) coverage

When you drive on public roads, there’s always a chance that you’ll encounter someone who doesn’t have any auto insurance. If an uninsured driver hits you, they probably won’t be able to cover your medical bills or pay for the damage to your vehicle. UM coverage covers any property damage and/or medical bills arising from an accident involving an uninsured motorist.

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9

Underinsured motorist (UIM) coverage

Even if a driver has insurance, there’s no guarantee that they’ll have enough insurance to cover your accident-related expenses. In other words, they may be underinsured. Like other coverage options, UIM insurance gives you extra protection. If you get into an accident with an underinsured motorist, your UIM coverage will cover your expenses, ensuring that you don’t have to pay them out of your own pocket.

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What’s not covered by commercial auto insurance?

A standard commercial auto policy typically has these exclusions:

Property handling:
Your auto policy won’t cover accidents that occur while you’re loading or unloading one of your business vehicles. For example, if you run an electrician business and an employee drops a heavy tool kit on his foot while unloading your truck, your auto insurance won’t cover his medical expenses.

Pollutants:
Even the most comprehensive policy won’t cover claims linked to pollutants. For example, many companies transport hazardous chemicals in their trucks. If a truck carrying one of these chemicals tips over, the chemical may seep into a nearby pond. Your auto insurance won’t cover any claims related to the leak.

Mobile equipment:
This type of insurance doesn’t cover mobile equipment that isn’t designed to be driven on public roads. For example, tractors, backhoes, forklifts, etc. Therefore, if you have a business in the construction industry and an employee gets into an accident with a backhoe, your commercial auto insurance policy won’t cover related expenses.?

Property stored in the vehicle:
Tools, merchandise, and other items stored in the company vehicle are usually excluded from a commercial auto policy but can be covered with an add-on or a separate inland marine insurance policy. With an inland marine policy, if merchandise is damaged or stolen while in transit, your insurance can reimburse you.

Racing:
Your insurance company won’t pay any expenses related to accidents caused by racing or other high-risk activities.

Hired/non-owned autos: This coverage is specifically made for leased vehicles. A standard commercial policy won’t cover any bodily injury or property damage expenses arising from an accident in a leased vehicle.

Who needs commercial auto insurance?

Every business owner that has at least one company vehicle should have a commercial auto insurance plan. This is especially true if you have a fleet of company vehicles operated by employees.

Even if you don’t own a business, you may need commercial auto insurance if you drive for a ride-sharing service, use your vehicle to deliver goods, or drive to multiple job sites every day.

If you use your car for work-related tasks but not specifically for commercial purposes you likely do not need commercial auto insurance. For example, if you stop to buy breakfast for the office once per week you likely do not need commercial auto coverage.?

If you aren’t sure what type of insurance is right for you, an agent can help.

How much does commercial auto insurance cost?

Our partner Insureon states that small businesses pay around $146 per month for commercial auto insurance. This is based on internal sales data from a range of different types of businesses.?

Many factors affect the cost of commercial auto insurance, such as the type of vehicle you have, the size of your business, the number of vehicles you own, and your location.

Your insurance company will also want to know about any industry-specific driving risks involved in your work. Standard vehicles are the cheapest to insure, while taxis, limousines, and semi-trucks are the most expensive.?

Try our pricing tool to find out how much commercial auto insurance could cost you.

Is commercial auto insurance worth it?

Commercial auto coverage is not only worth it, it’s a necessary coverage for businesses that own or operate commercial vehicles.?

Without commercial auto insurance, you can end up owing thousands of dollars in property damage and/or bodily injuries. Depending on the severity of the accident, some claims can exceed $1 million.

Discover your ideal policy in minutes Unlock plans from over 30 top providers, now! Suitcase and Shield With Checkmark GET PRICES

Other types of business insurance you may need

If you’re a business owner, you need several types of insurance to protect you against significant losses.?

You should consider buying general liability insurance. Although your commercial auto policy includes liability coverage, it only applies to auto-related claims. A general liability policy covers you when a third party injures themselves or their belongings on your property. For example, if someone sues you after falling in your showroom, a liability policy will pay your legal expenses.

Commercial property insurance covers your building, on-site tools, and equipment. For example, if you have a store that’s been damaged by lightning, fire, or wind, your property insurance will cover the cost of the repairs, less your deductible and any other out-of-pocket costs.

Workers’ compensation insurance is required in most states and covers medical expenses and lost wages for employees who get injured on the job. For example, if you run a deli and one of your employees cuts a finger with a meat slicer, your workers’ comp policy would pay for their treatment and follow-up care.

Commercial Auto Insurance FAQs

What is the difference between commercial and personal auto insurance?

Personal auto insurance may not be enough to cover you when you are operating a company vehicle. On top of this. a commercial auto insurance plan can cover a whole fleet of vehicles and your employees that operate them.

Limits on commercial auto insurance are usually much higher and these policies often include certain types of specialty coverage not found on a personal auto insurance policy.

Do I need commercial auto insurance to drive for Uber, Lyft or another ride-share service?

Whether you need commercial auto insurance to drive for Uber or Lyft depends on the rules set by your insurance company. Some insurers require you to purchase a separate commercial insurance policy if you plan to drive for Uber, Lyft, or a similar service.?

Other companies allow you to add a ride-share endorsement to your personal auto insurance policy. An endorsement changes the original terms of your insurance contract, ensuring that you’re covered while you wait for ride-share customers.?

Before you start driving for a ride-sharing service, we recommend speaking to an insurance agent who understands the market and can help address your specific needs.

Who is covered to drive my commercial vehicle?

Commercial insurance typically covers the business owner, employees, and the business owner’s family members when operating a company vehicle. Note that for events to be covered, you must be using the vehicle for work-related reasons. A commercial policy won’t cover you if you get into an accident while driving your personal vehicle to the grocery store, for example.

Leigh Morgan
Leigh Morgan Personal Finance

Leigh Morgan is a seasoned personal finance contributor with over 15 years of experience writing on a diverse range of professional legal and financial topics. She specializes in subjects like navigating the complexities of insurance, savings, zero-based budgeting and emergency fund development.

In the last five years, she’s authored over 300 articles for credit unions, digital banks, and financial professionals. Morgan is also the author of “77 Tips for Preventing Elder Financial Abuse,” a book focused on helping caregivers protect the elderly from financial scams.

In addition to her writing skills, she brings real-world financial acumen thanks to her previous experience managing rental properties as part of a $34 million real estate portfolio.

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