Commercial Auto Insurance
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Frequently asked questions about commercial auto insurance

Commercial auto insurance is required for business-owned vehicles. Find out how to get a policy, what type of coverage you need, and the answers to other frequently asked questions.

Commercial auto insurance requirements and coverage

How do I know if I need commercial auto insurance?

There are a lot of factors to consider before deciding if you need to purchase commercial auto insurance. If your business owns the vehicle, you likely need this coverage. You'll also need to research the laws in your state to make sure you're in compliance. Learn more about how to get the right auto insurance for your vehicle.

Is commercial auto insurance required by law?

Commercial auto insurance is required by law in every state, except for New Hampshire and Virginia. Even in the states where it is not required by law, drivers can still be held liable for damages. Find commercial auto insurance laws in your state.

Vehicles that are used but not owned by your business, such as employee vehicles or a leased truck, can be covered by hired and non-owned auto insurance (HNOA). This policy is not required by law. However, personal auto insurance policies typically exclude business use, which makes this policy essential for businesses that rely on a non-owned vehicle.

What does commercial auto insurance cover?

Commercial auto insurance helps cover the cost of accidents involving vehicles owned by your business. That includes medical bills, property damage, and legal expenses if you’re sued.

Some policies include protection against vehicle theft, vandalism, and other types of damage. You can choose to add different types of coverage to your policy, such as collision or comprehensive coverage.

Another coverage to consider is personal injury protection (PIP) insurance, which is an add-on to your commercial auto policy that provides medical payments (MedPay) coverage after a car accident, regardless of who was at fault. State laws determine whether PIP coverage is required.

It should be noted that commercial auto insurance coverage only applies to "automobiles," which are defined as vehicles primarily used for travel on public roads. Machinery and earthmoving gear that can be driven but primarily designed for use off of public roads are considered "mobile equipment."

Businesses in need of coverage for these types of vehicles will likely need to add a mobile equipment endorsement to their auto insurance policy.

How much commercial auto insurance do I need?

Each state sets its own requirements for minimum commercial auto insurance coverage. That includes a certain amount of bodily injury liability coverage, property damage liability coverage, and uninsured motorist coverage.

You can purchase the minimum amount of coverage to meet state requirements, or purchase more if you want to be able to make higher claims on your policy.

There are a few strategies you can use to save on your commercial auto premium, such as improving safety practices and choosing lower limits. You can also consult with an insurance agent on your business insurance needs, including finding affordable car insurance policies.

Do rideshare and delivery drivers need commercial auto insurance?

Rideshare and contract delivery drivers face unique risks that can make it hard to find coverage.

Insureon does not currently provide coverage for this type of driving, unless you’re an employee of a restaurant, grocery store, or similar business. In this case, the employer could purchase hired and non-owned auto insurance to protect employees from liability.

If you work as an independent contractor for a rideshare or delivery company, ask your personal auto insurance agent about extending your coverage.

Do I need commercial auto insurance for my personal vehicle?

Commercial auto insurance only covers vehicles owned by a business. However, your personal auto insurance policy likely excludes business use.

Hired and non-owned auto insurance is the appropriate policy for vehicles your business uses but does not own. This policy is not required by law.

Do independent contractors need commercial auto insurance?

Commercial auto insurance for independent contractors provides protection if they get into an accident while driving a business vehicle.

Regardless of whether you are self-employed or not, every state requires this coverage for vehicles that are registered to a business, or the ability to compensate someone in case of an auto accident.

If you are self-employed, your personal auto insurance might not cover you when you drive your own vehicle for business use. If you drive your personal vehicle for work, you should consider hired and non-owned auto insurance (HNOA). Even when it's not required by law, an independent contractor might purchase this coverage to safeguard against common lawsuits.

How to buy commercial auto insurance with Insureon

How quickly can I get commercial auto coverage with Insureon?

Our online application for commercial auto insurance takes just a few minutes to complete. The application requires some basic information about your business, including where it’s located, the number of employees, and estimated revenue for the upcoming year.

In most cases, we’ll deliver multiple quotes from top U.S. carriers as soon as you finish the application. Look them over and pick the policy that works best for you. A licensed Insureon agent is available to assist you throughout the process.

Once you purchase a policy, you can access your account and obtain proof of insurance. Typically, it takes between 24 and 48 hours to complete the process and gain insurance for your business.

What happens if I need to buy more insurance later?

It’s easy to add insurance at a later date. Your insurance agent can adjust the coverage amount on your policy, and provide assistance if you need to purchase additional policies.

What happens if I cancel my policy?

If you cancel your policy early, you run the risk of paying more for coverage down the road. Insurance companies typically charge higher rates to businesses that start and stop coverage. You also leave your business exposed to potential risks if you cancel your coverage.

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Compare commercial auto insurance with other policies

Commercial auto vs. hired and non-owned auto insurance

Hired and non-owned auto insurance protects vehicles that your business uses but does not own. That includes your employees’ personal vehicles and vehicles leased by your business. Commercial auto insurance is required by law; hired and non-owned auto insurance is recommended but not required.

Read more about how hired and non-owned auto insurance differs from commercial auto insurance.

Personal auto vs. commercial auto insurance

Personal auto insurance covers accidents that occur only while you are using a vehicle for personal reasons. That includes your commute and travel unrelated to your job. You can check with your insurance company to see if they’ll extend coverage for occasional business use.

Commercial auto insurance provides coverage for business-owned vehicles. Sole proprietors who drive their own vehicle for business purposes likely need this policy. 

Hired and non-owned auto insurance provides liability coverage for vehicles that your business operates but does not own. That includes employee-owned vehicles and vehicles rented or leased by your business.

In addition, lease gap insurance is an endorsement you can add to your commercial auto policy that covers the total loss of a leased or financed vehicle.

Learn more about the difference between personal and commercial auto insurance and when each policy will protect you in an accident.

Updated: May 22, 2024
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