How to Find Cheap Auto Insurance for Your Small Business

Last Updated on April 4, 2023

Finding cheap auto insurance for your small business is easy.

By considering your insurance needs and comparing quotes, you can find the best policy for your small business at a reasonable price.

Keep reading to find out everything you need to know about finding cheap auto insurance for any type of small business.

How Commercial Auto Insurance Works

Many small businesses need auto insurance.

A standard personal car insurance policy does not cover you when driving a vehicle for commercial purposes.

If you have a house cleaning business, for example, and drive your car between homes, then your insurance company could deny any claims because you’re using your car for commercial purposes.

That’s why many small business owners buy commercial auto insurance. Here’s how it works:

• Commercial auto insurance policies protect one or more company vehicles
• A commercial auto insurance company can also protect vehicles transporting employees, employees’ own vehicles used for work purposes, and all types of work vehicles
• Some business owners buy liability-only coverage for commercial vehicles, while others buy full coverage to protect their vans, trucks, and SUVs from accidents, theft, vandalism, and more
• If your employees use their own vehicles for work purposes, then your commercial auto insurance policy could cover employees during work trips; if the employee’s personal auto insurance does not cover a claim, then the employee can make a claim through the commercial auto insurance policy

Many small and large insurance companies offer commercial auto insurance policies. By shopping around and comparing quotes, you can find the best commercial auto insurance policy for your small business needs.

How to Find Cheap Commercial Auto Insurance

The best way to find cheap commercial auto insurance is to:

Consider Your Needs: Some small businesses are over-insured. They spend too much on insurance, or they’re doubly insured in certain areas. Other businesses are underinsured, which exposes them to considerable risk and liability and could cost more in the long run. By considering your needs, you can choose the best car insurance policy for your business at the best price.

Compare 5 to 10 Quotes: Some insurers specialize in insuring your specific type of small business. By working with these insurers, you could save money. Other insurers provide exclusive discounts, have better coverage, or have cheaper pricing overall compared to competitors. By comparing multiple quotes, you can find cheap small business auto insurance.

Take Advantage of Discounts: Commercial auto insurance policies, like personal auto insurance policies, have discounts to save money. You get a discount for paying for your policy in full upfront, for example. You may also get discounts for being an experienced business, installing security systems in your business, using fleet tracking software, bundling your policy with other commercial coverages, and meeting low mileage requirements.

Maintain a Clean Driving Record: The longer you go without an accident, speeding ticket, or another incident, the cheaper your commercial auto insurance policy will be. The same rule applies to your employees. Commercial insurance carriers check the motor vehicle report of any employee with access to your business’s vehicles. If one employee has multiple DUIs, then it could double your commercial insurance premiums. Most commercial insurers consider the previous three years of driving history when calculating premiums.

Buy a Businessowners Policy (BOP): A businessowners policy, or BOP, may be the right choice for your small business. A BOP is a bundle of insurance products to protect your business from liability, damage, theft, vehicle-related incidents, and other claims. Instead of buying multiple insurance products to cover multiple areas of your business, you can save money with a BOP.

Do You Need Commercial Auto Insurance?

Some businesses need commercial auto insurance, while others do not.

Generally, if your business involves driving between job sites, carrying tools or equipment in vehicles, or delivering things to customers, then you need commercial auto insurance.

You also need commercial auto insurance if your business owns any vehicles.

If you answer yes to any of the following questions, then you generally need a commercial auto insurance policy:

• Does your business own one or more vehicles?
• Do you drive to and from job sites?
• Do you carry tools, equipment, or products for your business in company vehicles, your own vehicle, or employees’ vehicles?
• Do you provide trucking and freight transportation using your vehicle? (i.e., you ship vehicles on your truck)
• Do you deliver goods or services to customers using vehicles? (i.e., you drive for Uber Eats, DoorDash, Walmart, or deliver pizzas)
• Do you transport clients or employees using vehicles? (i.e., you drive for Uber or Lyft)
• Do you sell products or food from your vehicle? (i.e., you operate a food truck)

Many businesses are surprised to discover they need a commercial auto insurance policy. If you regularly use your vehicle for work purposes, or if your employees use their vehicles for work purposes, then you may need a commercial auto insurance policy.

What Does Commercial Auto Insurance Cover?

Standard commercial auto insurance coverage includes:

Liability Coverage: Liability coverage includes bodily injury and property damage liability coverage. If you or an employee damage someone’s property or injure someone and are found at fault, then liability coverage covers the cost of compensating the other party. It can cover medical bills, car repair costs, and costs arising from a lawsuit. Virtually every state requires liability coverage, and all commercial auto insurance policies come with liability coverage that meets or exceeds the minimum amount required in your state.

Collision & Comprehensive Coverage: Collision and comprehensive coverage are optional, but they provide added protection to your vehicle after an accident. Collision coverage covers the cost of repairing your vehicle after an accident involving another vehicle, while comprehensive coverage covers damage to the vehicle outside of accidents – including vandalism, theft, fire damage, environmental damage, and collisions with animals.

Medical Payments Coverage: Some commercial auto insurance policies include medical payments coverage. Medical payments coverage covers your medical bills when you are injured in a car accident. It can also cover the medical expenses of your passengers, the medical expenses of employees injured during a work trip, and other similar costs.

Uninsured Motorist Coverage: Millions of drivers in the United States – approximately 1 in 7 nationwide – do not have insurance, according to the Insurance Research Council. If your company vehicle is involved in a hit-and-run collision, or if the other driver does not have insurance, then you make a claim through your uninsured motorist coverage.

Other Coverages: Other coverages that could be bundled in your commercial auto insurance policy include:

• Rental reimbursement coverage, which provides you with up to $100 per day if your car is in the shop
• Towing and labor coverage, which covers towing and other roadside assistance incidents
• Gap coverage, which covers the “gap” between the value of financed or leased vehicles and their actual cash value in a total loss claim

How Much Does Small Business Auto Insurance Cost?

The average small business auto insurance policy costs $167 per month, according to our research, or around $2,004 per year.

In comparison, the average personal auto insurance policy costs around $121 per month or $1,450 per year.

Due to the price difference, many might be tempted to use their personal coverage in lieu of a commercial policy. Just as a commercial policy will not cover personal use, a personal policy will not cover commercial use. If you get into an accident while conducting business and only have a standard personal auto insurance policy, your claim will be denied.

Factors Impacting the Cost of Small Business Auto Insurance

Insurers consider hundreds of factors when calculating small business auto insurance premiums.

Some of the biggest factors affecting the price of your small business policy include the following:

• ZIP code, including the location where you park your vehicle most nights
• Accident history and previous claims
• Number of vehicles or employees
• Value and type of vehicles (like vans, trucks, or cars)
• State insurance laws
• Industry and profession

There’s a big difference in risk between insuring, say, a one-person home-based internet business and a medium-sized home contracting business.

With a small home-based internet business, you might use your vehicle to drive packages to the post office or meet with clients, spending little time on the road overall. With a medium-sized home contracting business, you might have a dozen employees driving hours per day to multiple job sites. Because of this difference in risk, commercial insurance companies charge different rates.

Final Word – Cheap Small Business Car Insurance

Finding cheap auto insurance for your business is easier than ever. With basic research, you can find the optimal auto insurance for your small business.

Visit a commercial car insurance comparison website online or contact commercial insurers in your area to find the best cheap auto insurance for your small business.