Be careful. It can prove to be a costly choice to risk adequate coverage to get the cheapest commercial auto insurance. Learn about various factors that influence your commercial auto insurance cost to make sure you're both fully covered and maximizing your savings!
How much does commercial auto insurance cost?
This is a common question among small business owners, and it's one of the most difficult to answer. Ultimately your premium depends on your specific business situation, and there are many different factors used to calculate your final rate. You can find estimated rates online, but always remember they're just estimates.
In general, vehicles used in work environments tend to have more exposure, making their insurance premiums more expensive than typical personal auto policy premiums. For example, a carpet cleaning van may travel to multiple jobsites a day hauling a heavy, expensive and permanently attached vacuum system. Personal vehicles usually aren't used for these kinds of risks, and this is why insuring them is usually less expensive.
Commercial auto insurance cost factors
Basic factors that influence the cost of your commercial auto insurance include:
Industry / profession - Not all businesses carry the same level of risk. An excavating business with multiple commercial vehicles has much higher exposure than an accounting firm that occasionally uses a car for running errands.
Location - You could expect to pay more to insure a commercial vehicle driven in a large city than a vehicle driven in a rural area. Additionally, areas with above average claims are typically priced higher.
Vehicles - Your vehicle's year, size and use will influence your premium. For example, an older delivery van occasionally used by a bakery will generally be less expensive to insure than a new cargo van used more frequently by a company that transports expensive cargo. And coverage choice matters. If you choose to carry physical damage coverage, your vehicle's value will be factored into your premium.
Driving history - Most insurance companies run a motor vehicle report for all drivers with access to your listed commercial vehicles. Drivers with multiple accidents or violations will have a negative impact on your premium. It's common for your carrier to take the past three years of your driving history into account.
Coverage needs - Your commercial auto insurance cost will increase with more coverage. For example, a $1 million liability policy will have a significantly higher premium than a policy with state minimum liability limits.
You might also find these factors helpful in making cost-effective business decisions including negotiating business contracts, hiring employees and buying vehicles.
Getting the cheapest commercial auto insurance
There are several ways to get the cheapest commercial auto insurance for your situation. These include:
Maintain a clean driving record
Your driving history has one of the largest impacts on your premium, and even a small moving violation can significantly affect your rate. Therefore, your rates could stay lower if you and your employees practice safe driving habits. You could see your insurance rates improve over time as long as you and your employees keep your driving records free of accidents and violations.
Adjust your coverage limits and deductibles
Lowering your liability coverage from 300 CSL to 100 CSL, for example, is one way to save on your commercial auto premium. You may also increase your physical damage deductibles as well. Keep in mind, that by reducing your limits you are reducing your coverage, and that by increasing your deductibles you are increasing what you pay out of pocket at the time of a covered loss. Be sure you're comfortable with the amounts you select prior to buying a policy.
Discounts are the easiest way to get cheap commercial auto insurance. We offer multiple ways to save. Our most common discounts include:
- Continuous auto insurance
- Business insurance discount
- Commercial driver's license (CDL)
- Business owner experience
- Pay your policy in full
Learn more about how these discounts, and others, can help you save on your commercial auto policy.
Finding cheap commercial auto insurance is easier than you think! We have licensed professional experts who can help you find the best combination of price and coverage specific to your business. Call us today, or start a quote online.