Commercial Auto Insurance: Best Options for Small Businesses

You may need commercial car insurance if you carry work equipment, regularly drive to visit clients and more.

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Updated Jan 13, 2023 · 2 min read

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Commercial auto insurance covers vehicles used for business purposes, whether or not they’re owned by your company. The coverage is a must for small-business owners who drive to work sites or to meet clients, deliver goods, haul tools or supplies or have employees who drive their vehicles.

Commercial car insurance is separate from rideshare insurance and personal auto insurance, though you can often bundle these to save money. You may also be able to package this coverage with other types of business insurance, including general liability and commercial property insurance.

Top commercial car insurance providers

Many of the household names in consumer auto insurance also offer commercial policies. Below are some high-rated consumer car insurance companies that also offer commercial policies. NerdWallet’s business insurance ratings are based on each company’s financial strength, complaints relative to its size, digital features and customer service availability.

Allstate

4.5

NerdWallet rating

Pros:

You can get a quote online.
You can buy other business insurance coverage, including a business owner’s policy, directly from Allstate.

Cons:

Claims must be filed over the phone.

Why we like it: Allstate is among the top 10 providers of commercial car insurance by market share in the U.S., according to the Insurance Information Institute, and it earned high marks from NerdWallet for its low number of complaints filed with state regulators relative to its size. Read NerdWallet’s review of Allstate business insurance.

State Farm

3.5

NerdWallet rating

Pros:

State Farm ranked highest in overall customer satisfaction in consumer research firm J.D. Power’s annual small-business insurance study in 2022.
Insurance agents sell virtually every type of business insurance coverage.

Cons:

Limited online features for commercial insurance customers.

Why we like it: When it comes to customer satisfaction, State Farm is atop the heap. That’s a testament to the insurer’s focus on one-on-one service, with a vast nationwide network of State Farm agents who handle tasks that include providing an initial quote, purchasing a policy and filing a claim. Read NerdWallet’s review of State Farm business insurance.

Progressive

4.0

NerdWallet rating

Pros:

Commercial auto insurance can cover dual personal and business use.
Coverage available for semitrailers.
You can get a quote online.

Cons:

Progressive sells other types of business insurance, but they’re policies from other insurance companies.
Claims must be filed over the phone.

Why we like it: Progressive is the largest commercial auto insurer in the U.S., according to the Insurance Information Institute. It offers a range of discounts to help you lower your premium, including the option to bundle your commercial car insurance with your personal policy, as well as other types of business insurance. Read NerdWallet’s review of Progressive business insurance.

Geico

4.0

NerdWallet rating

Pros:

You can get a quote online.
You can report a claim online.

Cons:

No coverage for semitrailers.
Geico sells other types of business insurance, but they’re policies from other insurance companies.

Why we like it: Geico has been insuring automobiles for more than 70 years. The insurer offers several ways to lower your rate, including bundling commercial and personal auto insurance or combining your coverage with other business insurance. Read NerdWallet’s review of Geico business insurance.

What is commercial auto insurance?

Commercial car insurance covers vehicles used for business purposes, whether by you or an employee. Any accident-related expenses that arise from injuries, deaths or property damage are covered up to the policy limits.

Commercial auto insurance is sometimes confused with rideshare insurance, which is typically required if you’re a rideshare or delivery driver.

A commercial auto insurance policy typically includes:

Liability coverage, including bodily injury and property damage liability, to pay for injuries, deaths or property damage if a driver causes an accident while working. This coverage may also pay legal fees.
Medical payments, no-fault or personal injury protection, to pay for the medical expenses of the driver and any passengers in an accident, regardless of fault.
Uninsured motorist coverage to pay for injuries and sometimes property damage caused by an uninsured or hit-and-run driver. This coverage may also include underinsured motorist coverage if the at-fault driver doesn’t have enough car insurance coverage to cover all expenses.
Comprehensive and collision coverage to pay for vehicle damage from theft, vandalism, flood, fire and damage if a work vehicle is hit by an object or another car.

Commercial policies could include other coverage, like towing and labor, rental reimbursement and lease gap coverage, but they generally don’t cover tools or other items you’re carrying in the vehicle. A business owner’s policy — which contains commercial property insurance protections — can cover tools owned by the company, while a home or renters insurance policy covers personal belongings in the vehicle.

» MORE: Learn more about the cost of commercial car insurance

Do you need commercial auto insurance?

If you regularly use your car for work — with the exception of commuting — you’ll need a commercial auto policy. You should consider commercial car insurance even if you’re an independent contractor or self-employed full or part time.

You’ll likely need a commercial policy if you:

Drive for cash. Driving friends to a concert or grabbing food for a co-worker is covered by a personal policy, but transporting people or goods for money is not.
Log high mileage for work, such as regular visits to store locations or job sites.
Transport items for work purposes, like heavy tools or equipment.
Have employees driving on your behalf. It’s your responsibility to insure work-related driving, whether or not you own the vehicle.

If you use your car only occasionally for business, your personal policy may offer enough coverage. Check out the scenarios below to see when you may need a commercial policy and when a personal policy is sufficient.

Personal auto insurance	Commercial auto insurance
Grabbing morning doughnuts for co-workers.	Delivering pizzas to paying customers.
Driving friends to a concert.	Driving clients to a work event.
Taking weekend road trips.	Driving to multiple job sites a day.
Commuting to the construction site where you're working.	Hauling tools and equipment to the construction site where you're working.

» MORE: What small-business owners should know about commercial car insurance

How to get commercial auto insurance quotes and buy coverage

Follow these steps to get commercial auto insurance.

Decide which vehicles and drivers you need to insure. You’ll probably need U.S. Department of Transportation or vehicle identification numbers for each vehicle and driver’s license information for each driver to get quotes.
Determine how much coverage you need. Insurers typically recommend carrying $1 million in liability protection, according to the Insurance Information Institute. How much collision and comprehensive coverage you need may depend on the size of your fleet, the age of your vehicles and other factors.
Get multiple quotes. Comparing business insurance quotes can help you ensure you’re getting the coverage you need for the best price. You can get quotes online in minutes from Progressive, Allstate and Geico or from online business insurance companies.
Buy a policy. Some providers will connect you with an agent to complete your purchase. In other cases, you may be able to buy your policy online on your own.

» MORE: Best business auto loans

Frequently Asked Questions

What is the difference between commercial auto insurance and personal auto insurance?

While commercial and personal policies have similar types of coverage, there are some significant differences. Commercial auto policies are usually tax-deductible and come with higher liability limits because business vehicles need more protection. They also can cover vehicles not owned by the company, for instance if an employee drives their car for work.

How much is commercial auto insurance?

The median cost of commercial auto insurance is $142 per month, according to Insureon, an online marketplace for small-business insurance. But the cost of your policy will depend on the vehicle type, the driving record of all drivers, how the vehicle is used and coverage limits, among other factors.

Where can you buy commercial auto insurance?

Most well-known insurers offer commercial auto insurance, including Geico, Progressive, State Farm, Allstate and Liberty Mutual. Because these policies are typically more expensive than those for personal auto coverage, getting several quotes is the best way to find affordable rates.

Article sources

NerdWallet writers are subject matter authorities who use primary, trustworthy sources to inform their work, including peer-reviewed studies, government websites, academic research and interviews with industry experts. All content is fact-checked for accuracy, timeliness and relevance. You can learn more about NerdWallet's high standards for journalism by reading our editorial guidelines.

1. Insurance Information Institute. Top 10 Writers Of Commercial Auto Insurance By Direct Premiums Written, 2021.

Methodology

Business insurance ratings methodology

NerdWallet’s business insurance ratings reward companies that offer small-business owners reliability and ease of use. Ratings are based on weighted averages of scores in several categories, including financial strength, customer complaint data, shopping experience and customer service. Learn more about how we rate small-business insurance companies.

These ratings are a guide, but insurance policy details and prices can vary widely from business to business and provider to provider. We encourage you to shop around and compare several insurance quotes.

NerdWallet does not receive compensation for any reviews. Read our editorial guidelines.

Insurer complaints methodology

NerdWallet examined complaints received by state insurance regulators and reported to the National Association of Insurance Commissioners in 2018-2021.

To assess how insurers compare to one another, the NAIC calculates a complaint index each year for each subsidiary, measuring its share of total complaints relative to its size, or share of total premiums in the industry. To evaluate a company’s complaint history, NerdWallet calculated a similar index for each insurer, weighted by market shares of each subsidiary, over the three-year period.

Our star ratings consider ratios for both general liability insurance and commercial property insurance. When an insurer sells policies that are underwritten by several different insurance companies, we consider the NAIC complaint ratios of all the underwriters.