You’ve heard of commercial auto insurance and been told that you need it, but what actually counts as a commercial vehicle? Can any car or truck be insured with commercial auto insurance?
In general, yes. Basically, any vehicle used for business purposes or owned by a company can be considered a commercial vehicle. Even personal vehicles may be considered commercial. This includes:
- Pickup Trucks
- 18 Wheelers
- Semi-Trailer Truck
These vehicles can be on their own or part of a fleet, which is a group of commercial vehicles owned by a company. There are vehicles that are made to be commercial vehicles, however, and commercial trucks have a rating system depending on their weight. For example, a Class 1 commercial truck weighs 0-6,000 lbs. The weight of a commercial vehicle factors heavily into the cost of commercial auto insurance. It may also restrict the use of certain vehicles.
States have different requirements for commercial vehicles. A lot of vehicles, such as large trucks and trailers, require specific certifications. Other regulations concern interstate commerce, farm trailers and intrastate transportation of petroleum. Be sure to check with your state about regulations and requirements for commercial vehicles.
Do I Need Commercial Auto Insurance?
If your company owns or uses commercial vehicles, you’ll need commercial auto insurance. States also have requirements on the amount of insurance your commercial vehicles must carry. In Texas, these requirements are:
- $500,000 for carriers that seat 16-26 people
- $5 million for carriers that seat 27 or more people
- $300,000 for vehicles carrying 26,000 lbs. or less
- $500,000 for vehicles carrying more than 26,000
- $1-$5 million for vehicles carrying hazardous materials
How Much Does Commercial Auto Insurance Cost?
Premiums for commercial auto insurance vary depending on a variety of factors such as the weight of the vehicle, the distance traveled, credit history and claims history of the company, industry and more. It’s important to perform a background check on drivers sharing company vehicles to ensure they are trustworthy and have a clean driving record to avoid claims and higher premiums.
On average, small businesses may pay anywhere between $750-$1,200 a year per vehicle. Semi-trucks cost an average of $8,000-$12,500 a year to insure. Keep in mind that it also matters how much coverage you purchase for each vehicle. Speak with an insurance agent about your businesses’ unique commercial auto insurance needs.