Commercial auto insurance is a crucial consideration for any business that owns and operates vehicles, from an independent plumber with a single van to companies with large fleets. Because commercial auto insurance is available from a wide variety of insurers, it can be confusing and difficult to figure out what kind of policy is best for your company.
To determine the best commercial auto insurance companies, AdvisorSmith considered a number of factors, including financial strength ratings from AM Best and Standard & Poor’s, customer satisfaction data from several J.D. Power studies, complaint ratings from the National Association of Insurance Commissioners, available features and options, and availability of information and ease of use of the insurers’ websites. We scored insurers out of a total of five points and only included those companies that scored 3.5 or higher.
The Best Commercial Auto Insurance Companies
|1||Progressive Commercial||5.0 / 5.0|
|2||Liberty Mutual||4.9 / 5.0|
|3||The Hartford||4.7 / 5.0|
|4||Geico||4.7 / 5.0|
|5||Auto-Owners||4.6 / 5.0|
|6||Travelers||4.6 / 5.0|
|7||Erie Insurance||4.5 / 5.0|
|8||State Farm||4.5 / 5.0|
|9||Allstate||4.4 / 5.0|
|10||Cincinnati Financial Group||4.4 / 5.0|
|11||Chubb||4.4 / 5.0|
|12||Nationwide||4.4 / 5.0|
|13||Great American||4.2 / 5.0|
|14||Farmers Insurance||4.0 / 5.0|
|15||CNA||3.8 / 5.0|
|16||Hiscox||3.7 / 5.0|
*Not all insurance companies provide coverage in all states.
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AdvisorSmith found and rated the top commercial auto insurance companies on a five-point scale, based on financial strength, customer satisfaction, ease-of-use, and a number of other factors. While many insurers were evaluated, only those with a score of over 4.5 are listed below.
5.0 / 5.0
Progressive Commercial is one of the top commercial auto insurers in the nation, with extensive experience insuring commercial vehicles. Progressive boasts an AM Best rating of A+ and a Standard and Poor’s rating of AA. With customizable coverage for autos, trucks, and trailers, Progressive offers a number of benefits, including online quotes and claims and a variety of discount options.
Progressive also offers Snapshot ProView, a program that helps users follow safe driving habits, with reductions to premiums for safer drivers. Businesses with three or more vehicles can also take advantage of free fleet management tools. The Smart Haul program provides similar benefits to for-hire truckers who use an electronic logging device.
4.9 / 5.0
Liberty Mutual is one of the largest property and casualty insurers globally and received A ratings from both AM Best and Standard & Poor’s. Liberty Mutual has a variety of commercial products tailored to small businesses, and the company was ranked above average in J.D Power’s customer satisfaction study for small commercial customers.
Liberty Mutual offers benefits to its commercial customers, including risk control services that can provide safety training for drivers. For larger fleets, tools to monitor drivers’ habits with telematics information are available. Liberty Mutual also offers an app through which you can send photos of damaged vehicles and receive an estimate.
4.7 / 5.0
The Hartford is a popular commercial insurer that has been given an A+ rating by both AM Best and Standard & Poor’s. The Hartford offers services such as analyses of your company’s driving records and recommendations on strategies to improve safety. If you use telematics systems, you may be able to use The Hartford’s FleetAhead program to help you identify potential causes of accidents and potentially save on your premium costs.
The Hartford offers online claims reporting and works through a network of agents and brokers to sell its commercial coverage.
4.7 / 5.0
Geico earned an A++ rating from AM Best and an AA+ rating from Standard & Poor’s, indicating that it is in an extremely strong financial position. The insurer’s parent company ranked second in J.D. Power’s most recent customer satisfaction survey for large commercial insurers and was ranked 13th in J.D. Power’s 2020 U.S. auto insurance claims satisfaction survey.
Geico provides convenient online auto insurance quotes and online policy access. It can customize policies for fleets of all sizes and covers most types of vehicles, including cars, vans, and trucks; however, it does not cover semi-trucks and tractor-trailers.
In addition to offering most standard auto insurance coverage options, Geico offers the option of combined single limits for liability coverage. Rather than having separate limits (maximum amounts of money that the insurer will pay for a single claim) for bodily injury claims and property damage claims, this type of policy gives a single limit that provides the same amount of coverage for an occurrence, regardless of property damage or injuries.
4.6 / 5.0
Auto-Owners Insurance has a financial strength rating of A++ from AM Best. The company boasts high customer satisfaction ratings, coming third in J.D. Power’s 2020 survey of auto insurance claims satisfaction.
It’s important to be aware that Auto-Owners Insurance is available in just 26 states. The company works through independent agents only, so you’ll need to contact an agent to get a quote from Auto-Owners. Auto-Owners policies automatically cover recently purchased vehicles. Policy options include roadside assistance coverage, loan or lease gap coverage, and more.
Auto-Owners Insurance offers many discount options, including discounts for companies with multiple policies through the insurer, policies paid in full, and fleets monitored by telematics. There are also seasonal discounts available for vehicles used in farming.
Brokers for Commercial Auto Insurance
Commercial auto insurance is offered by a wide variety of insurers, and this is one coverage area where it would be wise for business owners to shop around. Because coverage is generally quite similar between insurers and there is a much lower need for customizing this coverage for small businesses, insurers will want to compete on price for your business. A great way to compare prices is to use an online broker that can compile quotes from various insurers. Below, we’ve highlighted a few of the top brokers that offer commercial auto insurance.
CoverageSmith is a leading online broker specializing in insurance for small businesses. The company provides a modern, tech-enabled solution for businesses, allowing them to quickly get the insurance they need, completely online, from some of the most trusted insurance carriers in the world, including Chubb, The Hartford, AIG, and CNA.
CoverWallet is an online broker backed by Aon, an insurer with an A rating from AM Best. The company provides online quotes, assessments to help you understand what types of insurance your business needs, and online claims processes. CoverWallet also provides information and reading material on commercial auto liability. It may be possible to manage your pre-existing insurance policies through CoverWallet.
Embroker is backed by Munich Re, a financially strong insurer with an A+ rating from AM Best and an AA- rating from Standard & Poor’s. Embroker offers online quotes and claims, in addition to assistance that is available 24/7 via live chat, email, or phone. Embroker also provides a personal account manager who can help with insurance needs.
How much does commercial auto insurance cost?
The premiums for a commercial auto insurance policy vary widely and depend on a number of factors. While most small businesses will pay less than $2,500 per vehicle per year, there is a great deal of variance.
Factors that may influence your premium include:
- Number of vehicles
- Make, model, and age of vehicles
- Cost of vehicles
- Primary use of vehicles
- Driving history
- Claims history
- Coverage limits and deductibles
For many businesses, a minimum of $500,000-$1 million in commercial auto liability is appropriate. To supplement this liability, a commercial umbrella policy may also be appropriate to provide strong protection for your business.
What does commercial auto insurance cover?
Commercial auto insurance provides coverage for both liability and property. For vehicles that your business owns or leases, liability coverage is required for minimum amounts by most states. Property coverage protects the value of the vehicle your business owns or leases. If you have a lease or loan on your vehicle, the leasing company or bank may require you to have property coverage.
The liability component of commercial auto insurance consists of bodily injury liability, property damage liability, and pollution cleanup. Commercial auto liability coverage protects your business if you or one of your employees causes injury or damage to another party while driving and are deemed to be at fault for the crash. The insurer will also help pay for the legal fees to defend your business in court.
- Bodily injury liability provides coverage for your business if you or your employee is at fault for causing a crash that physically injures pedestrians, drivers, passengers in other vehicles, or passengers in your vehicle. Expenses covered include medical expenses, legal fees, loss of income, pain and suffering, and funeral costs.
- Property damage liability provides coverage if you are at fault for a crash while driving and damage others’ property. The property can be another vehicle or any other property, such as a building or fence.
- Combined single limit (CSL) liability is offered by some insurance companies instead of separate bodily injury and property damage liability. For example, if a policy has a combined single limit of $500,000, that is the maximum the insurer will pay for all bodily injury and physical damage claims combined.
- Pollution cleanup coverage provides funds for cleanup costs if you or your employee is at fault in an accident that causes the covered vehicle to leak pollutants. This coverage only applies in situations where property damage or bodily injury covered by the policy has occurred. It covers pollutants that are part of the vehicle’s normal operation, such as gasoline, motor oil, or coolant. Pollution cleanup coverage also applies in situations where pollutants are released due to a covered vehicle damaging, upsetting, or overturning a container holding the pollutants.
Commercial Auto Property
The property component of commercial auto insurance, also known as physical damage coverage, protects the value of your vehicle. There are two coverages: collision and comprehensive.
- Collision coverage pays for physical and mechanical damage to your vehicle when it hits or is hit by an object or another vehicle.
- Comprehensive coverage pays for any losses to your covered vehicles that are not covered by collision coverage. This may include theft, vandalism, falling objects, fire, glass breakage, and flooding.
- Specified causes of loss coverage is a more limited version of comprehensive coverage. This coverage specifies the risks covered, rather than offering broad, all-risks coverage, and it is also generally less expensive, given the narrower scope of coverage. Covered causes of loss typically include theft, fire, explosion, lightning, windstorm, hail, earthquake, flood, and vandalism.
In order to determine the best commercial auto insurance companies, AdvisorSmith considered a number of factors that reflect an insurer’s financial strength, customer satisfaction, and ease-of-use. Using our own proprietary scoring algorithm, we weighted the various factors based upon what we believe to be important for small and midsize business owners. These factors included carrier ratings from AM Best and Standard & Poor’s, customer satisfaction data from several J.D. Power studies, complaint ratings from the National Association of Insurance Commissioners, an evaluation of each insurer’s policies, options, and website features, and more. Our algorithm outputted a score out of five total points. While we considered a number of insurers, we only included in this article those companies that scored 3.5 or higher.
The AdvisorSmith rankings are based upon our editorial team’s quantitative and qualitative analysis, and they are intended to serve only as a guide for our readers. We encourage our readers to conduct their own research when selecting a commercial auto insurer, shop and compare quotes, and make a decision based on their own unique business needs.
AdvisorSmith is in no way compensated for any of our reviews.
AdvisorSmith spoke with the following experts to provide critical insight on commercial auto insurance for business owners.
- Professor, Department of Management
- Webster University
- Assistant Professor, Economics
- Seattle University, Albers School of Business and Economics
Q. What can businesses do to lower their commercial auto insurance premiums?
Joseph: There are several considerations that can lower commercial auto insurance premiums.
- Determine the best type of vehicles needed for commercial use. Insuring expensive vehicles will cost more when compared to insuring cheaper models. Though this is common sense advice, it is not followed by large number of businesses. The cost of commercial auto insurance is also dependent on the number of commercial vehicles. Renting vehicles from time to time as needed for projects, businesses can convert fixed costs to variable costs. This practice can lower commercial auto insurance costs and increase operating margins.
- Insuring leased vehicles are more expensive when compared to insuring vehicles that are owned.
- Driving records of employees using these vehicles will also impact cost of insurance. Making sure the employees with clean driving records use the vehicles will lower insurance costs.
- Adjusting the coverages for Liability, Comprehensive, and Property damage limits can save money.
- Another way to lower costs is trimming coverages to meet limits that are required by law and increasing deductibles.
- Shop around. Some companies settle with one or two cost comparisons. The more you shop around, the more options to lower insurance costs.
- Increase deductibles on older vehicles and maintain a good credit history.
Vladimir: In many ways, commercial auto insurance operates like personal auto insurance. When calculating premia, insurers consider such factors as the requested type of coverage, coverage limits, deductible, claim history, credit history, driving distance, type of parking, and probability of vandalism.
Commercial auto insurance adds new factors to this list such as the size of the fleet, types of vehicles operated, types of cargo carried, and number of employees.
From this standpoint, two ways to decrease the cost of commercial auto insurance are improving claim history and driving records and increasing the credit score of the business. However, this approach is slow in producing results. A faster alternative, mainly for business owners who can tolerate higher risk, involves choosing coverage with a higher deductible or more modest coverage limits. Another way to reduce the cost of premia would be to improve the safety of parking areas or install anti-theft devices on the fleet vehicles, or do both. These actions make financial sense if the reduction of the premium exceeds the cost of making such improvements.
In the future, converting the fleet to driverless vehicles could be another way to lower the costs of commercial auto insurance because artificial intelligence is expected to dramatically reduce the accident rate and, therefore, insurance premia.
Finally, comparing quotes from multiple insurance companies and checking for discounts (for example, multi-policy discounts) could help to minimize the costs of insurance.
Q. How should businesses think about balancing risk and affordability when it comes to commercial auto insurance?
Joseph: Investing in risk management can be considered funding business growth. However, when planning and implementing changes to achieve business growth, insurance expenses are sometimes seen as secondary to purchasing new software, equipment, hiring new talent and facilities. In some instances, companies seek to reduce coverages and exposing themselves to losses.
The way to think about insurance in general is to weigh the consequences of no insurance or of being under-insured. When starting a company, entrepreneurs have a tendency to ignore the need to invest in risk management. This is not a good idea. If a business cannot pay to protect itself and its assets and invest in growth, a review of its business model is recommended.
Vladimir: This balance mainly depends on each management’s risk tolerance. Companies should determine their most appropriate combination of policy coverage and limits, deductible level, and premia. At all times, their choices are restricted by each state’s minimum insurance coverage and required limits.
Q. How should business owners think about insuring a vehicle for business versus personal use, especially for sole proprietors?
Joseph: It is cheaper to insure personal vehicles when compared to commercial vehicles. Sole proprietors should consider keeping their personal vehicle insurance coverage. There are IRS rules regarding tracking expenses related to use of personal vehicles for business purposes. Sole proprietors can use their personal vehicles for business use. However, there are limitations.
Consistent use of a personal vehicle for business use can void auto insurances in some instances. When starting a business, these lines are often blurred, but once a business is established, it is better to keep personal vehicle use for business purposes to a minimum and purchase a separate vehicle for commercial use.
The revenue/business model should allow for purchasing and maintaining vehicles for business purposes. If in doubt, sole proprietors should consult with a CPA to determine whether commercial vehicles are better in the long run compared to using personal vehicles and putting themselves at risk. Sole proprietors should consider incorporating their businesses to minimize exposure to liability and protect their assets.
Vladimir: Business owners can consider commercial auto insurance as an obligatory cost of doing business. Indeed, most U.S. states prohibit the operation of commercial vehicles without commercial auto insurance, exactly as they prohibit driving personal vehicles without personal car insurance. Although commercial auto insurance is typically more expensive than personal policies, it comes with additional benefits. After an accident involving one or more commercial vehicles, the insurer will cover the costs of vehicle repairs and legal and medical bills if the coverage is sufficient. This reduces the bankruptcy risk for the insured business.
A related issue is whether commercially insured vehicles need to be owned by the business, rented by the business, or owned or rented by employees. Some commercial auto insurance policies extend their coverage to non-company-owned vehicles.
For sole proprietors, such as rideshare drivers, extensions of personal auto insurance policies could be available at a lower cost than commercial auto insurance.