Commercial Auto Insurance in Texas
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Commercial auto insurance in Texas

Commercial auto insurance covers the cost of bills and expenses if a business-owned vehicle is involved in an accident. It's required for any vehicles used for work purposes in Texas.

Who needs commercial auto insurance in Texas?

Any Texas company that uses vehicles for business purposes must have commercial vehicle insurance, whether it’s the owner’s personal vehicle or a fleet of vehicles owned by the business.

Your personal auto insurance policy covers you while driving to and from work, but not while making deliveries, picking up supplies, and other work-specific uses. A business auto policy would cover you and your personal vehicle in case you’re at fault for an accident during a work-related errand.

Any vehicles you own solely for work purposes must be covered by a commercial auto insurance policy, whether you own a single pickup truck, a food truck, or a fleet of semi-trucks and tractor trailers.

Why is commercial auto insurance important?

Your business could be in legal and financial jeopardy without commercial auto insurance coverage. In Texas, any business that has its own vehicles must at least carry auto liability insurance.

If one of your business vehicles is at fault in an accident, you could face an expensive lawsuit or settlement. You’d likely have to pay for damage to the other vehicle or property, medical bills, lost wages, pain and suffering, plus other related costs.

Additionally, you could face severe penalties for not owning auto insurance. If you are cited for not having insurance, you may receive a fine of over $175, an annual surcharge of $250 for three years following your first offense, and see an increase in your auto insurance rates. For a repeat offense, the fine can increase to up $1,000 as well as receiving an annual surcharge of $250 for three years, and the state may impound your vehicle.

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How does commercial auto insurance work in Texas?

All vehicles in Texas are required to have a minimum amount of auto liability insurance coverage, whether they’re for personal or business use. These liability limits are:

  • $30,000 in bodily injury liability or death liability per person
  • $60,000 in bodily injury liability or death liability to more than one person
  • $25,000 in property damage per accident

Your insurance agency might recommend higher liability coverage limits based on the types of vehicles you own and how they’re used. Texas state law also requires personal injury protection (PIP) for any policies with liability coverage. However, you can sign a waiver to decline this coverage from your auto insurance company.

Semi-trucks and other motor vehicles with a Texas Department of Transportation serial number may have additional liability coverage requirements, depending on the type of vehicle and how it’s used.

You can see if your business needs these additional requirements by checking your USDOT number or docket number with the Federal Motor Carrier Safety Administration.

How much does commercial auto insurance cost?

Person calculating the cost of commercial auto insurance with trucks in background.

Your cost is based on a few factors, including:

  • Number of vehicles
  • Vehicle type and value
  • Level of risk involved
  • Claims history
  • Employee driving records
  • Policy deductible and limits

Commercial auto insurance costs a median of $142 per month. 44% of Insureon small business customers pay less than $125 per month for their policies.

What if I use my personal vehicle for work?

If you’re using your own vehicle for work-specific activities, your personal auto policy wouldn’t cover you in the case of an accident. That’s why many small business owners purchase hired and non-owned auto insurance (HNOA). This liability policy covers accidents in personal, leased, and rented vehicles used for work purposes.

If you or an employee gets into an accident while driving a personal car for a work errand, your HNOA coverage would help pay for any claims or lawsuits against your business. It’s worth noting that this would not cover damage to the vehicle used by your business.

What else does commercial auto insurance cover?

While every Texas business owner must meet the minimum requirements for business auto insurance, this mandate only applies to liability coverage. This can protect you if one of your vehicles causes an accident, but it does not insure you against a mishap caused by someone else.

It’s worth considering these other commercial auto coverage options to make sure you’re fully protected:

  • Uninsured/underinsured motorist coverage insures you against personal injuries and damage involving a company vehicle, in case whomever caused the accident is unable to cover the full cost of damages.
  • Medical payments coverage pays for medical expenses if employees and passengers are injured in a company-owned vehicle, regardless of who is at fault.
  • Personal injury protection (PIP) coverage is similar to medical payments coverage, and is included with all auto policies in Texas. PIP will pay for you and your passengers’ medical bills, but it also can pay for other things such as lost wages and nonmedical costs. If you don’t want PIP, you will need to inform your auto insurer in writing.
  • Collision coverage helps pay for the cost of repairing or replacing your company vehicle if it’s damaged in an accident, regardless of who was at fault.
  • Comprehensive coverage covers the costs of non-collision damages such as vandalism, theft, flood, or fire.
  • Towing and labor coverage covers the cost of roadside assistance for company-owned vehicles.
  • Loading and unloading coverage insures against the physical damage of equipment and materials during transport, loading, or unloading.
  • Rental reimbursement coverage is recommended for when your car is stolen or being repaired after an accident. This coverage pays for you to rent a car, and with some policies, it will also pay for taxis or ride-hailing services.

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Insureon makes it easy for business owners in Texas to compare commercial auto insurance quotes online. Complete one easy application to review quotes specific to your business and industry from leading U.S. insurers. Start an application for a commercial auto insurance quote today.

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