How to Find Cheap Auto Insurance for Your Small Business

Last Updated on May 28, 2022

As a small business owner, you are concerned with your overhead.

Therefore, you might think that you can save by reducing your auto insurance coverage or relying on personal auto insurance for your company vehicles.

The only caveat is that personal auto insurance policies do not cover business vehicles, and furthermore if you have employees driving that vehicle you need proper coverage.

The Insurance Information Institute lists the various types of insurance coverage every business, big or small, should have. One bolded on that list is business vehicle insurance, because they too recognize that personal insurance policies use fine print exclusions for company-used vehicles.

What is Commercial Auto Insurance?

small business car insuranceCommercial or business automobile insurance policies protect company cars – even if you have a single vehicle that only you drive. It works to protect vehicles transporting employees, equipment, and products. You ensure all work vehicles, vans, trucks, and SUVs associated with your company from damage and collision.

If your employees drive their personal vehicles for company projects and work, you still need commercial coverage. In this case, you will purchase a non-owned auto liability policy that protects your business in the event your employee causes an accident, and their personal automobile insurance does not cover the incident.

What if I Use My Vehicle for Business Partially, but Still Personally?

Even if you used your personal vehicle for a minuscule amount of business-related time, you still should have a commercial policy in place.

Read the fine print of your personal auto insurance policy, and you will see that business uses, including delivery, transporting, and specific errands all disqualify your coverage. Likewise, if your personal vehicle is too business-like, such as a tow truck or pick-up with a toolbox and permanent ladder rack affixed to the bed, your insurer might classify that car as business; not personal.

Tips for Finding Cheap Auto Insurance for Your Small Business

Now that you know the reasons you need commercial automobile insurance, the next step is to gather some quotes and get the best deal.

You might notice you get an array of prices from various insurers but knowing how to get the most savings and understanding the reasons behind their quotes might help you walk away with a great deal and the coverage you need.

The Area Where You Operate Business Affects Rates

Just like personal auto insurance, your zip code does affect the rates you are offered. Naturally, the higher the population or in metropolitan cities, you will find higher rates – because with those population numbers comes an increased risk for accidents, theft, and vandalism.

You cannot escape your zip code but do know it is a factor insurance companies consider.

Consider How Much Coverage You Need

Coverage limits can be confusing. You want enough coverage to protect your business and any vehicle investments you make, but you also do not want more coverage than necessary.

At the very minimum, you need what the state requires for insurance coverage. Please realize that this coverage is often too little for serious accidents, but it will provide you with some coverage.

Just make sure your policy includes bodily injury, collision, and comprehensive. You may want rental vehicle and medical payments too, especially if the car you cover is essential for doing your work.

Uninsured and Underinsured Coverage

While not required, you should consider underinsured and uninsured motorist coverage. These policies do raise your rate, but in the event your company vehicle is struck by an uninsured motorist (or in a hit and run accident), you have coverage.

Discounts for Paying in Full

Most insurance companies will offer discounts if you pay for the years’ worth of insurance upfront rather than in monthly installments. Ask each insurance company the discount (if applicable). Some companies will offer discounts if you pay a six-month premium in full too, which saves you from paying an entire year but still unlocks discounts.

Look at Your Current Business Insurer

Your business may already have workers’ compensation or general liability coverage, which means the first place you should go for a quote is the company managing those policies. You may receive a bundled discount for adding a commercial auto insurance policy to your list of services, which saves even more.

Company Credentials

How long has your business been in business? Are the people using your vehicle’s screened and do you have copies of their driving records?

The fewer risks you pose to an insurer, the cheaper your commercial policy can be. If you have drivers with no accidents or citations on their records, and you have several years in business (proving you are a stable entity), you may lower your premiums.

Use a Combination of Online Search Tools and Local Brokers

These days, everything is online. While you wait for an appointment with an insurance broker, get a few quotes from online websites. These allow you to compare policies from different companies based on your coverage and zip code.

Then, meet with an insurance broker (or two) in person. Discuss the quotes you received online, see what they can offer you, and then take your time comparing them all.

Be cautious with your online quotes. Make sure you read any disclaimers or coverage exclusions carefully, because purchasing a policy online may result in being underinsured.

Combine with a Businessowners Policy (BOP)

Some small businesses may be able to include coverage in a BOP they already have. However, the coverage through a BOP may not be comprehensive enough, depending on how you use your company vehicle.

Bottom Line: Know the Factors and Look for Savings Opportunities

When you know what plays a role in determining your price quote, and you look for savings opportunities, you can find cheaper commercial auto insurance.

Regardless of how much it costs, realize that driving without commercial insurance will ultimately cost your company much more in the end. The only way to indeed save is to find an adequate, but affordable, policy for your company vehicles through a trusted insurance company.

James Shaffer
James Shaffer James Shaffer is a writer for and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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