How Much Does Commercial Insurance Cost?

As a small business owner, you always have an eye on the bottom line. If you can cut costs, you may be able to bring your customers better prices, increase your profits, and even raise your employees' wages. At Direct Auto & Life Insurance, we love helping our customers save money, which is why we're here to help you understand how you can better prepare for and budget for commercial auto insurance, a necessary expense if your business involves vehicles. From factors that could raise your rates to ones that could lower them, read on to find out how much commercial auto insurance could cost your small business.


Factors That Could Influence Your Commercial Auto Rate

Similar to the premium you pay for your personal auto policy, there are many factors that could impact the cost of your commercial auto insurance policy too. In general, the following elements tend to influence your commercial auto insurance rate, though they may vary by insurance company, state, and business.

  • Driving distance - The more you and your employees drive, the higher your risk for an auto accident. If your vehicle or fleet of vehicles is driven under a certain mileage on an annual basis, you could see a reduced premium. Fewer miles means less risk. For example, a flower delivery truck that only delivers to a handful of cities may cost less to insure than a truck that delivers throughout an entire state.

  • Driving location - If your business operates in an area where there tends to be more crime, theft and vandalism, your insurance rate could be higher than a business operating in a rural area. That same flower delivery truck may cost less to insure if it delivers flowers in rural Tennessee than if it delivers flowers in the heart of Dallas, Texas.

  • Amount and type of coverage - There are a variety of commercial auto insurance coverages for you to choose, from the most basic coverages like Bodily and Property Damage Liability, to optional coverages like Permissive Use and Medical Payments. The greater your coverage limits and the more coverage you have, the greater cost. Additional insurance requirements could apply for vehicles that transport people for a fee (like limousines) or for vehicles that transport hazardous materials.

  • The type of vehicle - If your car or truck has more features, more permanent attachments (like a toolbox) or is newer, it could be costlier to replace. This increased cost is likely to be reflected in the cost of your commercial policy.

  • How the vehicle is used - Insurance rates are generally cheaper for vehicles used for construction and farming. Vehicles that transport people tend to be slightly more expensive, and heavy duty cargo vehicles dealing with loads in excess of 10,000 lbs tend to be the most expensive to insure. As your business's liability risk goes up, so could the cost of coverage.

  • The driving records of your operators -This may be one of the most important factors when it comes to estimating the cost of commercial auto insurance, and for a few reasons. First, your insurance company may have specific underwriting guidelines for drivers operating heavy duty trucks and tractor trailers. Second, employees with poor driving records may cost you more to insure, or may prevent you from getting the insurance you need altogether.


Lowering Your Commercial Auto Insurance Costs

While the cost of commercial auto insurance varies greatly depending on your business and the insurance company you choose, there are generally a handful of ways you could potentially reduce your commercial auto insurance costs.


  • Choose a higher deductible - Usually, the higher the deductible you choose, the lower your premium will be for some coverages.

  • Store your vehicles in a secure area - Parking your vehicles in a locked or secure area may help deter theft, which could help you qualify for lower premiums.

  • Hire drivers with good driving records - Drivers with fewer violations tend to cost less to insure.

  • Look for vehicles that are safe, reliable, and not too costly to repair - Safety features like airbags, a backup camera, and an automatic braking system could help lower your overall premium.

  • Invest in GPS tracking of your vehicles - Your insurance company may offer a discount if your business has GPS tracking systems installed in its vehicles, as these systems could lower the chance of claims due to vehicle theft, improve driver's behavior, and discourage misuse.

The Average Cost of Commercial Auto Insurance

Getting a quote is one of the easiest steps you can take to better understand how much commercial auto insurance could cost your small business. It's time to stop wondering, "How much is this going to cost me?" Call 1-877-GO-DIRECT (1-877-463-4732) or visit a Direct Auto location near you to see just how affordable a commercial auto insurance policy could be. Our friendly and experienced agents can help you understand how your quote is calculated, plus how you may be able to lower the cost of auto insurance with discounts and flexible payment plans. Stop wondering and start getting answers. Call today!

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*Commercial auto insurance produced by Right Choice Insurance Agency, Inc. and Direct General Insurance Agency, Inc. d/b/a Direct Auto & Life Insurance as agents for Titan Indemnity Company, a Nationwide Insurance Company & its affiliates. Not available in all stores. Pay plans, discounts and coverages subject to terms and conditions.

The Cost of Commercial Auto Insurance
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