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Not every business can be stationary. Some actually require some wheels to take care of business.
If this is the case for your business, you need commercial auto insurance.
And if that is the case for you, we know you’re probably worried about what it might cost you.
We get it -- purchasing and maintaining vehicles for your business is already expensive enough, so a pricey insurance policy on top of it can be pretty painful. But, that’s all the more reason to have a thorough business auto insurance policy -- you want those expensive vehicles (and their drivers) to be covered if there was ever some sort of costly accident.
Lucky for you, we write business auto insurance policies all the time here at Berry Insurance, so we can give you some insight on pricing as it relates to commercial auto insurance.
In this article, we’ll give you an estimate on what commercial auto insurance can cost, get into the factors that influence it, and give some real examples of insurance premiums for Massachusetts drivers.
How much is commercial auto insurance?
We know you’re here to learn how much your business auto insurance will cost. So you may be disappointed to find out … we can’t really give you a straightforward answer.
But wait! Don’t go anywhere.
It’s not that we have anything to hide, but commercial auto insurance is complex, and the cost can vary significantly based on several factors (which we will get into more below).
But we can give you an estimated range of what you could expect to spend, based on some of the policies we’ve issued. We’ve seen policies range from $1,500 for a private passenger vehicle to $100,000 for a larger company with many work vehicles.
Commercial auto insurance is typically more expensive than a personal auto policy due to the extra risks your business assumes by using your vehicles to transport goods or services. In addition, a commercial auto policy offers much higher coverage limits, and will protect not only your business, but your employees while driving for your business.
What factors influence the cost of commercial auto insurance?
Number of vehicles:
This is pretty straightforward. A company with just one commercial vehicle will pay a lot less than a company with 100 commercial vehicles.
More cars on the road translates to a higher risk of having a claim -- simple as that. So your commercial auto insurance price will directly correlate to the number of vehicles your company has.
Vehicle types:
The make, model, and year of any company vehicles will also play a role in the company’s insurance premium.
Insurance carriers rate every type of vehicle based on average cost of repair, safety features, claims history, availability of parts, etc.
In general, newer, higher cost vehicles will cost more to insure, so if you use higher-end vehicles, you can expect your premium to reflect it.
Vehicle use:
When applying for commercial auto insurance, your agent will ask you questions about how you intend to use your vehicle -- how often it will be used, what sort of operations it will be used for, the materials you may transport, etc.
The answers to these questions will help the insurance carriers assess how much risk is associated with your company’s driving.
If your employees drive often, use the vehicles for more risky operations, or transport expensive materials, you should expect your insurance to cost a little more.
Driving records:
When it comes to driving, if those driving your business vehicles have had accidents or violations in the past, insurance companies will consider them more likely to have one again.
Massachusetts follows a Safe Driver Insurance Plan, which is a point system used to assign individuals a score based on their previous driving experience. If your drivers have clean driving records – ones without any accidents, tickets or violations – then your company’s auto insurance will be priced lower.
For more on how the drivers you hire can affect your policy, read this article: How Does Choosing the Right Drivers Affect Your Commercial Auto Policy?
Prior claims:
If you’ve ever had any claims on your business auto insurance, your carrier will consider you more of a risk to have another and will charge you more because of it.
Coverages and limits:
Each type of insurance has limits. These amounts are the total amount the insurance carrier would pay out if you were to have a claim.
And each policy actually has several different limits corresponding with the separate coverages within the policy.
With commercial insurance, these coverages include compulsory bodily injury, personal injury protection, optional bodily injury, property damage, auto medical payments, uninsured motorists, underinsured motorists, collision, limited collision, specified perils, comprehensive, loss of use, towing and labor.
You and your insurance agent will decide what coverage limits your company needs, and generally, with higher limits, you can expect a higher cost.
Deductibles:
Another factor that influences the price of commercial auto insurance is your deductible. A deductible is the amount you would have to pay out before an insurance carrier paid you any claim money. And usually you have a few deductible options for you to choose from.
With commercial auto insurance, you can generally choose between $300, $500, $1,000, and $2,000
The higher your deductible, the lower your premium will be.
Your insurance carrier:
Each insurance carrier rates cost differently, so the cost of a policy can vary based on the carrier it’s quoted with. We’ve seen home insurance quotes for the same business vary by several hundred dollars.
That’s why we always stress working with an independent agent (like us) who can shop your insurance around with all the carriers they work with to get you the right coverage at the right price.
MA commercial auto insurance premium examples:
You know the factors that influence price, but you probably still don’t have a clear idea of what exactly that means for you.
So to help give you some more insight, we’ll give you some specific examples of some of the commercial auto insurance policies we’ve issued recently.
- An attorney with one private passenger vehicle and a $1,000 deductible: $1,543
- A commercial refrigeration and air conditioning system company with 4 business vehicles including 3 SUVs and a utility trailer with a $500 deductible : $6,265 per year
- A carpentry contractor with 6 vehicles including 4 vans, a personal SUV and 1 utility trailer with a $1,000 deductible: $7,537
- An HVAC and plumbing contractor with 26 business vehicles and a $1,000 deductible : $32,353 per year
- An asbestos testing company with 19 business vehicles including a cargo van and a utility trailer) and a $500 deductible : $61,864 per year
Find the right business auto policy at the right price with the right agency
If you’re looking for the right price for your commercial auto insurance, you’ll want to make sure you’re working with a reputable insurance agent.
You’ll want to work with someone who won’t oversell you on insurance to make some extra money. Conversely, you also don’t want to work with somebody who will provide you the minimum coverages to make the quote more appealing (because then you could be stuck with a huge out of pocket expense down the road.)
The right agent can help you pick the right coverages that will fully protect your vehicles and employees without loading you with unnecessary coverages and overcharging you.
That’s why research is important. At Berry Insurance, we pride ourselves at being transparent and honest while providing high quality insurance. We also like to help people find the right agent for them (whether it be us, or another one of the reputable agencies in the area.)
So as you begin your search for your insurance agency, check out this article: What to Look For when Selecting an Insurance Agency or Company.
