Commercial auto insurance is essential for businesses using vehicles, but costs can be high. The single biggest mistake people make while shopping for commercial car insurance is approaching only the companies that are most heavily advertised.
And the first insurance company that comes to mind is not necessarily the one that will offer you the best rate. Follow these tips to get the best rates.
What Affects Your Rate
Commercial Auto Insurance
Commercial auto insurance is complex, and the cost can vary significantly based on several factors, including the number of vehicles a company owns, the cost of the vehicles, where the vehicles are garaged, the business operations, the coverages included, the limits on the policy, and the driver history.
It also helps to accurately classify your business use because insurers price policies based on how vehicles are used, such as service calls, deliveries, or transporting people or goods.
Get Quotes From Multiple Insurers
The single most critical factor in getting a cheaper rate is shopping around for as many quotes as you can, because different insurance companies charge different rates for the same coverage, and their competitiveness differs tremendously by customer location.
Only by obtaining several quotes that are specific to your situation and location will you be able to discover the cheapest rate that is available to you. Go for at least four quotes from different insurers, and compare coverage details, not just prices.
Work With Independent Agents
Approach more than one independent agent and have them quote your insurance with the companies they represent. In that situation, you’ll have agents competing for your business, and if you have several vehicles, you would have the opportunity to get the best possible rate for the coverage that you have.
Compare the Same Coverage on Every Quote
Commercial auto insurance is unique in that, unlike many other types of insurance, like property or liability coverage, it really does not have a lot of moving parts, and all of the coverages should be equivalent.
There are a few moving parts, like your liability limit and the deductible on your comprehensive and collision coverage. Make sure the limits are the same, and the deductibles are the same across quotes, and in most cases, it will be the company that can offer you the best pricing.
Find a Specialist for Your Industry
Depending on what type of business you are in, you can find a specialist who does a good job on your type of business, and they will be a lot more reasonable on cost than those who are not specialists. For example, nonprofits or churches might use 15-passenger vans, which are viewed by some insurance companies very negatively because of the potential for a catastrophic rollover.
While some insurance companies understand that 15-passenger vans are no higher risk and can insure them very cheaply. If you’re a contractor, you can get great rates on your vehicles if you deal with a company that knows how to insure contractors.
Keep Your Drivers’ Records Clean
Check employee driving records before you hire. When hiring an employee who will drive a company vehicle or use their own vehicle as part of their job, perform a Department of Motor Vehicles screening, because the driving records of employees impact your premium.
Moving violations and accidents significantly increase premiums, so implement a driver safety program for employees. Having employees with good driving records listed on your commercial auto policy will help keep your premium low, while employees with poor driving records can put the entire future of your business at risk.
Frequently Asked Questions
How many quotes should you get for commercial auto insurance?
Go for at least four quotes from different insurers; fewer than that will not do the job.
Why do insurance rates differ between companies?
Different insurance companies charge different rates for the same coverage. In addition, insurance companies’ competitiveness differs tremendously by customer location.
How can hiring affect your commercial auto premium?
The driving records of employees impact your premium. Having employees with good driving records listed on your commercial auto policy will help keep your premiums low.
What factors affect the cost of commercial auto insurance?
The cost can vary significantly based on several factors, including the number of vehicles a company owns, the cost of the vehicles, where the vehicles are garaged, the business operations, the coverages included, the limits on the policy, and the driver history.
Can a higher deductible lower your premium?
If your business can afford higher out-of-pocket costs for claims, higher deductibles reduce monthly expenses.
Making Sure You Get the Best Rate
When running a business, things move fast, and keeping your vehicles protected is an important part of keeping things moving.
Try to go with the business, the agent, and the company that understands what you do, and in most cases, you will get the best rate available for your type of business.
