The average price of commercial auto insurance is $1,762 per year or $147 a month. This insurance covers businesses against financial losses involving vehicle accidents, damages, and liability, which personal auto insurance does not cover. Commercial auto insurance is necessary for businesses since personal policies do not cover work vehicles. According to the Insurance Information Institute, 80 percent of small businesses use vehicles daily which makes them vulnerable. Prices depend on business type, car and location. For example, trucking insurance costs between $8,000 and $12,500 a year and landscaping companies are charged approximately $180 a month. IT firms spend approximately $198 per month (Forbes Advisor, 2025). Commercial insurance offers greater liability limits and is specifically designed for business use. Personal auto insurance covers personal use but businesses are at risk without commercial coverage.

What is the Average Cost of Commercial Auto Insurance?

Here are the three main factors that affect commercial auto insurance costs:
  1. National Average: The monthly premium is between 100 and 180 dollars. Businesses are paying an average of $1,200 to 2,160 per year. Premiums vary based on the level of coverage, use of the car and based on risk factors. Different companies and regions produced different results.
  2. By Vehicle Type: Cars and vans cost $600 to $2,400 per year. Pickup trucks cost between $1,200 and $3,000 each year. The premiums are the highest on heavy-duty vehicles such as semi-trucks, which are between $8,000 and $12,500 annually, because they are riskier and valuable.
  3. By Industry: More risky industries such as construction and delivery, are charged a premium of more than $170 per month. These industries contain greater vehicle utilization and accident probabilities. Less risky industries are less paid because the work conditions are safer and less exposed to vehicles.

What are the Factors That Affect Commercial Auto Insurance Rates?

Here are the six main factors that influence commercial auto insurance premiums:
  1. Number of Vehicles: Single vehicle policies are cheaper than fleet policies. Companies that have multiple cars are charged more due to the increased risk of accidents and claims with the increase in the number of cars, increasing the overall risk to the insurers.
  2. Vehicle Type & Use: Big heavy cars or cars that are used in delivering and transportation services attract higher insurance premiums. Service or light vehicles are often cheaper since they are less exposed to accidents or damage.
  3. Driving Records of the Employees: Employers that have safe drivers enjoy lower insurance rates. Nonetheless, motorists who have committed traffic offences or recorded accidents increase the premiums charged by the insurers because they are more likely to make claims in the future.
  4. Location: The rates of insurance depend on the state and area type. The premiums tend to be higher in an urban area due to traffic, theft and risks of accidents than in a rural area, which generally attracts lower premiums.
  5. Coverage Level: Liability-only coverage is cheaper than full coverage, which has collision and comprehensive coverage. Companies that opt to have full coverage incur more premiums since it includes more risks and damages.
  6. Claims History: Repeated claims in the past result in increased premiums because insurers consider such businesses to be risky. A clean claims record demonstrates reliability and businesses can obtain lower insurance rates in the long term.

What are the Types of Coverage in Commercial Auto Insurance?

Here are the five main types of coverage in commercial auto insurance:
  1. Liability Coverage: The liability coverage covers injuries and damage of the property of third parties caused by the business vehicles. It insures the companies against lawsuits and monetary damages in the event of accidents involving the business or its drivers.
  2. Collision Coverage: Collision insurance covers the cost of repairs or replacement of business vehicles involved in an accident with other vehicles or objects. This assists businesses in saving huge out-of-pocket costs following crashes of their commercial vehicles.
  3. Comprehensive Coverage: Comprehensive coverage covers non-accidental damage like theft, vandalism, fire, or natural disaster. It includes the loss due to unforeseen circumstances, which do not entail collisions as well as damage to company vehicles.
  4. Uninsured/Underinsured Motorist Coverage: This coverage is utilized to cover the business when the at-fault driver does not have adequate insurance. It assists in covering the repair expenses, medical expenses and damages not covered by the insurance policy of the other driver.
  5. Medical Payments Coverage: Medical payments insurance covers medical expenses of drivers and passengers injured in accidents of business vehicles, no matter who is at fault. It pays hospital expenses, physician appointments and other treatment expenses.

How to Lower the Cost of Commercial Auto Insurance

Here are five ways to lower commercial auto insurance costs:
  1. Shop Around & Compare Quotes: Asking multiple insurance companies to provide their quotes assists in getting the cheapest provider. Rates and coverage options comparison is a sure way of ensuring businesses receive competitive prices that align with their unique insurance requirements and budget.
  2. Bundle Policies: When commercial auto insurance is combined with other policies, such as general liability or business owner, it usually attracts discounts. Bundling is cost-effective and convenient to handle all the business insurance under a single location.
  3. Hire Safe Drivers: Defensive driving and screening of employees on their driving records reduces the chances of accidents. Insurers also have favorable rates to companies that have a good safety record and those that have good drivers, which leads to lower insurance premiums.
  4. Increase Deductibles: Choosing a larger deductible lowers monthly premiums. Companies incur higher out-of-pocket payments in the event of a claim but reduce their daily insurance costs, a balance between risk and cost.
  5. Install Safety Features: GPS tracking, anti-theft equipment installed on vehicles, or telematics enhance security. Insurance agencies provide discounts to businesses that adopt safety technology since the features minimize the risk of theft or accidents.

What are the Common Mistakes Businesses Make with Commercial Auto Insurance?

Here are three common errors businesses make with commercial auto insurance:
  1. With Personal Auto Policies: Personal auto insurance does not cover business-related vehicle use. Personal policies of work vehicles expose businesses to rejected claims and losses in case of accidents in the line of business.
  2. Select Minimum Coverage Only: Choosing state minimum coverage alone puts businesses at risk. These minimums are not usually full accident coverage (such as property damage or injuries), so they result in costly out-of-pocket payments at the time of a severe incident.
  3. Failing to Update Policy: Businesses usually neglect updating policies with the addition or removal of vehicles and drivers. This error results in gaps in coverage where certain vehicles or drivers remain uninsured, exposing them to the possibility of claim denials and financial responsibility.