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How Much does Commercial Auto Insurance Cost by States?

If you run a business and use a vehicle for the business, you will need a commercial auto insurance policy to protect you and the vehicle. You personal auto insurance doesn’t cover you nor the vehicle during these situations. Let’s see how much a commercial auto insurance policy costs.

How Much does Commercial Auto Insurance Cost?

The cost for your commercial auto policy depends primarily on the liability limits you select, type of vehicle you are insuring, driving history, and various coverages you elect to purchase. The average costs for commercial auto insurance are $900 – $1,200 a year, but these numbers can vary wildly based on several different factors. A spotty driving record, larger vehicles, larger operating areas, and speedy deliveries are all factors which could raise the price of your commercial auto insurance. Below, we’ll get into some specific examples that will show you just how much commercial auto insurance could cost your business. 

>>MORE: Why Do You Need Commercial Auto Insurance?

Factors that Determine How Much Commercial Auto Insurance Costs

As stated above, many factors can affect the cost of your insurance. Some key elements that could affect the price are:

  • Vehicle make, model and year
  • Cost of vehicle when new
  • Gross vehicle weight–large trucks typically cost more to insure
  • Driving records for anyone driving the vehicle
  • Type of business (deliveries, trucking, transportation, etc.)
  • Your claims history
  • Coverage options specific to your plan, including limits and deductibles
  • Number of Commercial Autos being insured in your business.  

According to a U.S. News & World Report from last year, Maine has the lowest prices for most commercial auto insurance customers, followed by New Hampshire, Ohio, Virginia and Idaho. These are the cheapest five states to purchase commercial auto insurance. The average auto insurance customer in Maine will pay about $861.37 per year for coverage, according to the study. 

Other states where it is relatively cheap to purchase commercial auto include: North Carolina, Iowa, Washington, Indiana and Alaska. On the other hand, the most expensive states to insure a car in the United States are: Michigan, Louisiana, California, New Jersey, and New York. But even if you live in one of the expensive states, don’t panic. Rates can vary quite a bit, even within a state. Insurance premiums are usually based on zip code, so even if your state is not one of the cheapest, you still may be able to find cheap rates depending on where you’re located.

Why do Commercial Auto Insurance Costs Vary by States?

There are many reasons why some states (and areas within states) have higher or lower auto insurance premiums than others. Specific laws, economics, weather, population density, and average income are a few of the reasons why rates vary state to state. Below, we’ll go over some of the differences in laws from state to state, and see why some states cost more than others. 

Commercial Auto Insurance Costs in Florida

Commercial auto insurance rates in Florida typically fall in the middle. Insurance laws in Florida require a minimum amount of coverage:

  • $10,000 of Personal Injury Protection (PIP) and
  • $10,000 of property damage liability.

For a full coverage policy, the average cost of car insurance in Florida was $3,370 per year, or $281 per month. Because Florida is such a large state, drivers can expect a wide range of rates, depending on where they are located. Some auto insurance quotes in the same Florida city can differ by more than $1,000 in annual premiums from company to company. So be sure to shop around. 

Commercial Auto Insurance Costs in California

The average cost of commercial car insurance in California is $1,713 per year — 20% more than the national average. In California, any business that uses company-owned cars or trucks must carry commercial auto insurance. Again, because California is so large, rates will vary from zip code to zip code, and from insurance company to the next. Auto insurance in California can be expensive, so it’s important that California business owners compare several different types of commercial auto insurance quotes before selecting a policy.

Different types of vehicles will have different insurance coverage requirements as mandated by state law. For regular company cars, the  liability minimums are the same as passenger cars:

  • $15,000 for bodily injury per person
  • $30,000 for bodily injury per accident involving two or more injured parties
  • $5,000 in property damage coverage per accident

For large commercial trucks and vehicles like as buses, semi-trucks and construction vehicles, the rates will usually be higher, determined by:

  • The size and weight of the vehicle
  • The type of cargo the vehicle will transport (trucks that haul hazardous materials will have higher liability requirements)
  • The vehicle’s intended use (e.g., deliveries, interstate commerce, construction, transportation)
  • The vehicle’s passenger capacity if the vehicle will be used to transport passengers

It’s important to consult with a business lawyer or insurance professional knowledgeable about the commercial auto insurance regulations in California before you decide on a purchase. 

Commercial Auto Insurance Costs in Georgia

Like most states, all business-owned vehicles in Georgia must be covered by commercial auto insurance. Georgia requires minimum coverage of $25,000 bodily injury liability per person, $50,000 bodily injury liability per accident, and $25,000 property damage liability per accident. Georgia has relatively inexpensive commercial auto insurance rates, with the average commercial auto insurance cost in Georgia at $1,388 per year, 2.8% lower than the national average. 

Commercial Auto Insurance Costs in Massachusetts

Auto insurance is typically inexpensive in Massachusetts. The average car insurance premium in Massachusetts is $1,201 per year — 15.8% less than the US average.

Massachusetts law requires almost all vehicles driven on public roads to be insured, so most businesses and other organizations in the state that have vehicles need to carry business auto insurance. This includes the following:

  • Transportation businesses (e.g. taxis, chauffeurs, etc.)
  • Delivery businesses (e.g. home deliverers, courriers, etc.)
  • Trade businesses (e.g. landscapers, plumbers, etc.)
  • Construction businesses (e.g. homebuilders, commercial contractors, etc.)
  • On-site food service businesses (e.g. caterers, food trucks, etc.)
  • Nonprofits with buses (e.g. religious organizations, senior care centers, etc.)

Businesses that rent vehicles from another company might need a form of business auto insurance. Personal vehicles will need commercial auto insurance if they are used for commercial purposes. For examples, restaurants whose drivers make deliveries may need special coverage. 

Drivers who offer rideshares might need to supplement their personal coverage with commercial coverage. This can vary from company to company, so be sure to check with your company. 

Commercial Auto Insurance Costs in New York

The average auto insurance costs $1,582 per year in New York — nearly 11% more than the national average

In New York, commercial auto insurance requires the exact same minimum coverage that personal insurance requires. These coverages include: $10,000 in property damage liability. $25,000 in bodily injury for an individual, $50,000 in death coverage for an individual, and $100,000 in death coverage for two or more people.

In New York State, it is illegal use your personal auto insurance to cover a commercial vehicle. You must purchase a separate commercial policy for your vehicle if you use it for business, even if you already have personal coverage for your vehicle. 

Commercial insurance is required for vehicles such as:

  • Construction vehicles
  • Pick-up trucks used for work purposes
  • Delivery vehicles (even pizza delivery vehicles)
  • Any licensed vehicle that is used for work purposes

Final Thoughts:

Though it may seem confusing, it’s relatively easy to check prices in your home state and compare rates. Remember, even if you have personal auto insurance, if you have a business or employees, chances are good you’ll need commercial auto insurance as well. Fortunately, there are many insurance companies that can help you find the best rate for your business, and make sure you stay insured against unforeseen damages or liability. 

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