If you frequently use your personal vehicle for business, or your business owns a vehicle, there is a good chance you should have commercial auto insurance. Because personal car insurance will not cover vehicles used for business, people across all industries—from construction to pizza delivery—make use of commercial auto insurance to protect themselves, their vehicles, and their businesses.
This guide will cover all of the basics of commercial auto insurance including coverage, requirements, and costs. Whether you are purchasing coverage for trucks and haulers at a construction site, a fleet of taxis, or a personal vehicle used frequently for business travel, this guide will give you the tools to find the right coverage.
If you’re already familiar with commercial auto insurance and just want to compare the best providers, below is a summary of our top recommendations. If you want to learn more about commercial auto insurance or need to refresh your memory on the basics, you’ll find the full guide below.
|Best for Trucking|
Best for Contractors
Best for Rideshare
Nationwide (Best Overall)
Nationwide is our top recommendation for commercial auto insurance. Their base commercial auto policy covers everything you need, and they have several optional extensions to choose from. The company really stands out in customer satisfaction and financial strength ratings, receiving nearly A+’s across the board. To top it all off, J.D. Power awarded them with the highest rating they give in Pricing, which means customers are highly satisfied with the value of their respective policies. The combination of their several coverage options, elite customer satisfaction ratings, and strong financial strength makes it easy for us to recommend Nationwide as the top overall insurance company for commercial auto insurance. Read our full review of Nationwide commercial auto insurance for more details.
Progressive (Best for Truckers)
We recommend Progressive for truck insurance. Progressive is flexible and accommodating in that they have customized coverage available and offer many discounts with their policies. They are highly specialized in the area of truck insurance, offering many different packages—including motor truck cargo insurance and trailer interchange insurance—to name a few. They carry an A+ rating in financial strength from A.M. Best and an A- rating in customer satisfaction from the BBB. Progressive scored highly overall for us, but their truck insurance policies really stood out from the rest, which is why they are our top pick for truckers. For more information, read our full review of Progressive commercial auto insurance.
Farmers (Best for Contractors)
We rate Farmers as our top commercial auto insurance company for contractors. With Farmers, contractors can get coverage for their business vehicles and the tools they transport inside them. And while they have flexible policy options in the area of commercial auto insurance generally, their policy options for contractors and subcontractors go above and beyond. In addition to being a large, well-established, and diverse firm, Farmers has good to excellent financial strength ratings as well, receiving an A, A2, and A+ by A.M. Best, Moody’s, and S&P, respectively. Farmers is a good choice for commercial auto insurance overall, but their expertise in tailoring policies for contractors means they’re our top choice for the construction industry. For more information of Farmers, read our full commercial auto policy review.
For anyone who does not know much about commercial auto insurance or needs a refresher, this guide will make you an expert. Here’s a summary of what we will cover. Click to jump ahead to relevant sections:
- Nationwide (Best Overall)
- Progressive (Best for Truckers)
- Farmers (Best for Contractors)
- Geico (Best for Rideshare)
Understanding Commercial Auto Insurance Coverage
Before choosing an insurer, wise buyers should spend some time researching the coverage options and learning about the commercial auto insurance market. This section will cover the basics of commercial auto insurance, including the coverage, costs, and requirements. Afterward, we’ll review all of the top providers and what makes them stand out. Also, if you want to learn more about other forms of construction insurance policies, make sure to check out our complete guide to the different types of construction insurance.
What is Commercial Auto Insurance?
Commercial auto insurance is sometimes called, business auto insurance or commercial vehicle insurance, but all of these terms refer to the same type of coverage – protection related to business-owned or operated vehicles.
The coverage provided by commercial auto insurance is similar to the coverage provided by personal auto insurance policies, except it is specifically for vehicles being operated for business purposes. Specific policies exist for the many types of commercial vehicles, including trucks, cement mixers, and many types of trailers.
How Does Commercial Auto Insurance Work?
A business owner can purchase commercial vehicle coverage for a single vehicle or for an entire fleet. Before purchasing a policy, the business must define what coverage it needs and to what extent. He or she will work with a representative from the insurance company to determine the following elements of the policy:
- Coverage – the types of incidents, damages, and expenses that will be covered
- Policy limit – the maximum amount of money that the insurer can be required to pay on the policy
- Deductible – the out-of-pocket amount that the company must pay toward a claim before coverage becomes available
- Monthly Premium – the monthly cost of retaining the policy
Businesses should look for balanced policies that combine adequate coverage and policy limits with reasonable deductibles and monthly premiums.
Once a business purchases a commercial auto insurance policy, the policyholder begins to pay monthly premiums (and possibly some fees at the beginning of the contract term). In return, the insurance company agrees to pay for any damages, repairs, and medical or legal expenses associated with a covered incident, as described in the policy terms.
After a collision, break-in, or other covered incident, the policyholder must call the insurance company to “file a claim” and report the losses incurred. All insurance companies will require that you inform them within a few days of the incident, and failure to report the claim in a timely manner could lead to the claim being denied.
If the total damage assessed exceeds the policy deductible and the incident is indeed covered, then the insurer is obligated to pay for damages up the policy’s limit. For most commercial auto insurance companies, the policy limit applies to all costs on the policy, even if multiple losses are incurred from separate incidents. If a company needs higher limits, they may purchase excess liability coverage or an umbrella policy, which is separate of the commercial auto insurance policy, but will kick in once the policy limit of the commercial auto policy is hit.
When it comes time for the insurer to “settle the claim” or pay for covered losses, not all insurers follow the same protocol. For example, in the case of an accident:
- Some insurance providers will require that you use one of their certified auto repair shops to assess and repair damages. Often, they will make payment directly to the shop and bill you for the deductible. This situation is actually ideal and involves the fewest transactions and prevents the shop from over-charging you.
- Other insurers will require that you get multiple price estimates from different auto repair shops if they are not a part of the insurer’s approved shop network.
- Depending on the extent of damages, some insurers may send representatives to evaluate the damages and estimate the cost of repair before approving repair estimates from a shop.
- Some insurers will also only reimburse costs after they’ve been paid by the policyholder, sending payment after the repairs have been made. This can be inconvenient, if not detrimental, for business, depending on its cash flow. It’s best to avoid policies that are structured this way.
There are no laws that dictate how the insurance provider will handle claims, so make sure to review each provider’s method of settling claims and make sure that the process works for your business.
Who Needs Commercial Auto Insurance?
Regarding the third point, if an employee-owned vehicle is only used to commute to and from work or a job site, and for an occasional meeting with clients, then a personal auto insurance policy may suffice. However if the vehicle is used frequently for commuting, offsite meetings, and other business activities, it likely needs to be covered by a commercial auto insurance policy. If the vehicle does qualify as a business vehicle, a personal auto insurance policy may actually exclude coverage for an incident while the vehicle is being used for business. If you are unsure about your particular situation, it’s best to consult an agent.
The exact type of coverage needed will depend specifically on how the vehicle is used for business; but in general, if the vehicle is used for business, it will require some type of commercial auto insurance policy.
Minimum Commercial Auto Insurance Requirements
If a vehicle does need commercial auto insurance coverage by law, what are the requirements? Most states require that any registered vehicle must be covered with liability insurance to pay for the cost of bodily injury or property damage to others. Each state’s commercial auto insurance requirements will vary slightly, but states will usually require that businesses meet at least the same minimum requirements as passenger vehicles.
In California, to meet minimum requirements, drivers must carry personal auto insurance policies that cover at least $15,000 for injury/death to an individual, $30,000 for injury/death to multiple individuals, and $5,000 for damage to property. Drivers must carry proof of insurance and make it readily available to law enforcement.
In New York, the liability coverage requirements for auto insurance policies are much higher. For each driver, the limits must be at least $25,000 for injuries to one individual, $50,000 for injuries to multiple individuals, $50,000 for the death of one individual, $100,000 for death to multiple people, and $10,000 for property damage. New York also requires drivers to carry no-fault and uninsured motorist insurance. New York’s auto insurance requirements are among the most stringent in the country.
The Department of Motor Vehicles offers a resource to find auto insurance requirements by state for passenger vehicles (keep in mind that business requirements may be slightly higher):
Separately, if your company transports products or people across state lines, your business will be subject to “Federal Motor Carrier Insurance” requirements, imposed by the Federal Motor Carrier Safety Administration (FMCSA).
Lastly, it is actually possible to avoid purchasing commercial auto insurance by fulfilling the financial obligation that commercial auto insurance does. In California, there are three possible ways to meet the requirement, which are (1) a $35,000 cash deposit with the California Department of Motor Vehicles, (2) a Certificate of Self Insurance from the DMV, or (3) a surety bond of $35,000. A commercial auto insurance policy has advantages over these options in terms of convenience and up-front costs.
What Does Commercial Auto Insurance Cover?
Commercial auto insurance policies cover a broad range of costs that may result from a number of different incidents. This section explores the details of commercial auto insurance coverage.
Different Types of Vehicles
As discussed above, commercial auto insurance policies can cover vehicles owned by either individuals or businesses, as well as various types of vehicles that are common to different industries. These include:
- Passenger Cars
- Vans, Pickup Trucks, and SUVs
- Cement Trucks, Haulers, Cranes
- Tow Trucks
- Box Trucks
- Dump Trucks
- Food Trucks
- Delivery Vans
- Tractor Trailers
- Stake Trucks
- Semi Trucks
- Refrigerator Trucks
- Utility Trucks
Coverage also exists for many types of vehicles not shown here, but note that coverage will likely be more difficult to find (and possibly more expensive) for highly specialized vehicles and industries.
Bodily Injury Liability
Bodily injury liability coverage is an essential component of commercial auto insurance. It covers costs associated with bodily injury to others in an incident when an employee (or other covered driver) is at fault. The covered costs could include medical and rehab costs, lost wages, legal expenses, and even funeral costs in fatal accidents.
We discussed above that many states require a minimum amount of bodily liability insurance. For example, bodily liability requirements in California and New York are $30,000 and $50,000, respectively. Most commercial auto insurers offer limits that are significantly higher.
It is also important to remember that the quoted limits for liability policies apply to each vehicle on the policy.
Property Damage Liability
Property damage liability coverage pays for the cost of damages to the property of others after an incident caused by a covered driver. If another person’s vehicle or property is damaged, this policy will cover the costs to repair or replace. Damaged property could include buildings, vehicles, fences, mailboxes, landscaping, and more.
Property damage liability coverage is required in most states; however, the required limits are much lower than those for bodily injury liability. In California, the required coverage limit is $5,000, and in New York, the limit is $10,000—just fractions of the bodily injury liability requirements.
Because property damage liability and bodily injury liability are insurance requirements in most states, this coverage is typically grouped with bodily injury liability to form one vehicle liability insurance bundle.
Physical damage protection covers the cost of replacement and repair of vehicles and property owned by the policyholder after a covered incident. There are multiple subcategories of physical damage coverage, which define the types of incidents and damages that are covered. The types of physical damage coverage are:
- Collision – covers the cost of damages when damages occur from a collision or roll.
- Comprehensive – covers the cost of damages from anything other than a collision, including theft, fire, weather, and vandalism.
- Limited Comprehensive / Fire and Theft with Combined Additional Coverage (CAC) – usually intended for large trucks and construction vehicles and is a limited version of comprehensive coverage, covering a narrower range of incidents.
Physical damage coverage only covers damages to the policyholder’s vehicles, so it is not required in most states. However, it is a useful component of any auto insurance policy to help avoid the high costs of repairing or replacing a vehicle after an incident or theft.
Medical payments coverage pays for the costs related to injury of the policyholder, company employee, or any passengers of a covered vehicle in an accident. Covered costs include medical bills, lost wages, and even funeral expenses. Most states won’t require this form of insurance but it is essential if costly medical bills are to be avoided after a serious, covered accident.
Sometimes, health insurance of the injured party will cover the costs after an accident, but not always. Medical payments coverage will always apply, even if the injured party is at fault for the accident.
Personal Injury Protection
Personal injury protection (PIP) is coverage for the costs associated with bodily injury of the policyholder, employees of the business, and passengers after a covered incident. This coverage is very similar to medical payments coverage with one big difference.
Personal injury protection is sometimes referred to as “no-fault” insurance because fault is not a determining factor of who covers the cost of medical payments. Whether the accident was the fault of the driver or a third party, expenses associated with injury will be covered under PIP.
PIP insurance is actually required in several “no-fault states,” which are
New Jersey, North Dakota, New York, Florida, Kansas, Kentucky, Hawaii, Pennsylvania, Utah, Michigan, Massachusetts, and Minnesota.
PIP is usually only available in no-fault states, and most, if not all, insurers will only allow businesses to carry either personal injury protection or medical payments coverage at the same time.
Uninsured Motorist / Underinsured Motorist
Uninsured and underinsured motorist insurance is coverage designed to cover the costs associated with bodily injury of the policyholder, employee, or passengers after an incident with a person who isn’t insured. After an accident, the insurance provider of the at-fault-driver will pay for medical costs and property damage for every party. If the at-fault-driver isn’t insured, then this coverage will pay for the damages and medical costs.
Even though liability insurance is required in most states, according to the National Association of Insurance Commissioners (NAIC), approximately one in every eight drivers is uninsured, which means there is a fairly high risk of accidents with uninsured drivers.
In addition to the key commercial auto insurance policies that nearly all insurers will offer, some companies will offer add-on policies or coverage extensions, which increase the coverage that the policy provides. The coverage additions can add protection against new situations and risks.
Below is a list of additional commercial auto insurance policies and coverage that many insurance providers offer:
- Roadside Assistance – this is a feature that some insurance providers allow businesses to include on their commercial auto insurance policies. It gives policyholders and employees the ability to phone for roadside help if a covered vehicle breaks down.
- Hired and Non-Owned Auto – this coverage covers rental vehicles and employee-owned vehicles while they are being used for business purposes.
- Named Insureds Coverage – this coverage may go by different names from different insurers, but its purpose is to provide coverage for specific individuals within the company regardless of the vehicle they drive. If they need to borrow, or rent a vehicle, this coverage will apply the same level of coverage that their normally-insured vehicle has.
- Motor Truck Cargo – this coverage is intended for businesses and sole proprietors in the business of transporting cargo, freight, or goods for others. The coverage protects the property being transported in the case of a covered incident where the property is damaged or lost. Companies who use this coverage may also benefit from motor truck general liability insurance, which is broader coverage for businesses in that industry.
- Non-Trucking Liability – this type of coverage is for truck drivers who occasionally use their leased trucks for personal reasons. Typically, a commercial auto insurance policy won’t cover a work-truck when it is not being used for business. This coverage fills that gap.
- Rental Reimbursement – this coverage reimburses policyholders if they must rent a vehicle while their primary automobile is being serviced or repaired.
Many other optional coverages and policy extensions exist for commercial auto insurance customers. Customers in specialized industries should seek insurers who offer coverage extensions or specialized policies that matches their particular needs.
What Doesn’t Commercial Auto Insurance Cover?
Commercial auto insurance can cover most driving incidents and vehicles for the majority of businesses. However, there are some grey areas and excluded situations that buyers should be aware of.
One obvious exclusion is for damages or injuries that are intentional. If someone covered on the policy uses a covered vehicle to intentionally harm another person or to damage property, the insurance company is not liable for damages and expenses. In fact, if this is done to deceive the insurance company, it is known as insurance fraud, an illegal offense that comes with severe financial and possibly criminal penalties.
Property of Others
Another very common exclusion standard to commercial auto insurance policies is property belonging to others that is in the possession or care of a covered individual. If a covered person is driving a car belonging to someone who isn’t on the policy, it will not be covered. The same is true for any equipment, tool, or personal items belonging to others. Some insurers will offer coverage extensions to protect the property and automobiles of others while they are in the possession of an insured.
One other common situation that is not covered by commercial auto insurance is accidents that occur when an employee is driving their personal vehicle to run business errands. This isn’t exactly an exclusion of commercial auto insurance policies because privately owned vehicles are not the responsibility of commercial auto insurance. As we mentioned above, it is possible to extend commercial auto coverage to include this with hired and non-owned auto coverage, but that won’t be included unless requested by the buyer.
Damages Exceeding Policy Limits
Commercial auto insurance policies all specify maximum coverage limits, which specify the absolute maximum amount of money that the insurer will pay out toward claims on the policy. Any damages accrued that exceed the coverage limit will not be covered. One way to add additional coverage beyond the limits of the commercial auto insurance policy is to purchase an excess liability (or umbrella) policy, which extends coverage of commercial auto and other common insurance policies for businesses.
Commercial Auto vs Personal Auto Insurance
Commercial auto insurance works very similarly to personal car insurance with some specific differences that make it more suitable for business purposes. We’ve covered most of the details of commercial auto insurance. Here’s a summary of how commercial auto compares with personal car insurance policies:
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Commercial Auto Insurance Costs
As for most forms of insurance, the costs of commercial auto insurance are not cut and dry. However, they can be estimated with greater precision than other types of policies. Most major insurance providers offer commercial auto policies, and similar ones at that, so the rates are generally competitive between providers.
The cost of an insurance policy is captured in its monthly premiums. The more coverage, the higher the monthly premiums will be. A basic policy for a passenger vehicle that merely meets the state requirements will be significantly cheaper than, for example, a policy with over $1 million in coverage that protects specialized construction vehicles like cement mixers and dump trucks.
How Much Does Commercial Auto Insurance Cost?
Construction contractors can expect to pay anywhere from $1,500 to $3,000 per year to insure their trucks because of the risk exposure on most job sites. High-cost construction vehicles that are rented or leased can be significantly more expensive to insure; it depends on the size, use, and value of the vehicle.
Factors that Affect the Cost of Coverage
The cost of a commercial auto insurance policy depends on a number of factors. Some are out of the buyers control and some can be adjusted to affect the total cost of coverage. Below is a summary of the factors that underwriters use to determine the total cost of a commercial auto insurance policy:
- Type and value of vehicles – The more valuable a vehicle is, the more expensive it is to insure. Also, vehicles designed to transport people are more expensive to insure. Buses, taxis, and limousines face increased bodily injury liability so businesses must pay higher monthly premiums to insure these types of vehicles.
- Number of vehicles – More vehicles means higher total cost of coverage. If the business is insuring a fleet, they may be able to achieve discounts for purchasing coverage in bulk.
- Risk profiles of insureds – Underwriters will consider a number of things about each driver who will be listed on the policy. Factors like driving history, age, gender are used to approximate the risk profile of each driver so the insurer can determine the probability of an incident. The number of drivers won’t normally affect the cost of the policy, but adding drivers could affect the average risk profile of the insured drivers.
- Location and mileage – In very high traffic areas, like New York City, the likelihood of damage to a vehicle is much higher than in rural and suburban areas. Similarly, the more miles driven, the greater the risk of an accident. Anything that adds risk will drive up costs. Additionally, businesses that frequently cross state lines are subject to federal insurance minimums and also face higher risk because of the miles traveled.
- Vehicle purpose and coverage included – The purpose of your business vehicle typically determines the coverage you need to purchase. Which components you need to insure your business vehicle depend on the state liability requirements and whether any additional coverage is needed for the vehicle. For some vehicles and locations, certain risks, like theft and weather damage are not as likely. Business owners should consider the risks associated with each vehicle before purchasing general coverage for all vehicles on the policy.
- Policy limit and deductible – Businesses who want policy limits above the minimum requirements must pay higher monthly premiums. Commercial auto insurance policies will typically allow limits into the millions of dollars. The deductible on the policy is also a major factor in determining the premiums. High deductibles will lower the premiums, but increase out-of-pocket costs if a covered loss does occur.
Adjusting the coverage included, the limits, and the deductibles can affect the price of the policy. Buyers will need to strike a balance between coverage and cost to find the ideal policy for their business vehicles.
Finding Cheap Commercial Auto Insurance
Commercial auto insurance can actually be fairly cost-efficient if the buyer chooses and plans wisely. There are several steps that business owners can take to make sure that their commercial auto insurance policies are fairly priced.
First and foremost, a clean driving record is the number one factor that can bring down the cost of the policy.
Because the coverage limit has such a large impact on the policy’s cost, it’s worth closely evaluating the amount of coverage you need. Keeping limits unnecessarily high will add to the monthly premium. We do not recommend lowering coverage limits only for the sake of saving money. However, it is worth taking a close look at the realistic potential costs associated with an incident and lowering the coverage limit to a suitable level for the risk.
Increasing the deductible on a commercial auto insurance policy is another way to keep costs down. Of course, if the deductible is higher, this “saved money” comes out of your pocket in the event of a covered loss. That said, if you perceive the risk of accident to be low for your business and employees, high deductibles can be a good option for lowering cost.
Lastly, many insurance providers offer discounts to drivers who meet various criteria.
- Clean driving record discount – Typically, insurers will lower the base cost of the policy for a clean driving record, but they may also offer discounts for hitting certain milestones, like “no accidents for 3 years.”
- Experience discounts – Some insurance providers will offer a discount to experienced commercial drivers. This may include truck drivers who’ve had their commercial driver’s licenses for a certain amount of time, or tow truck drivers with 3+ years of experience.
- Full payment discount – Often, insurers will give a small discount to policyholders that pay off their annual premium balance at the beginning of the coverage period.
- Bundled policy discount – Many insurance providers incentivize businesses to purchase more of their business insurance policies from them by offering a discount for “bundling” multiple insurance policies. Sometimes these are referred to as multi-line discounts.
- Auto payment discount – Some insurers will offer small discounts for setting up automatic payments each month, ensuring they get paid regularly.
- Safety feature discounts – Many providers like to incentivize their policyholders to drive safely and take various safety precautions. Vehicles with certain safety features may trigger discounts with insurers.
- Professional association discounts – Some insurers will give discounts to policyholders who are a part of various organizations. Some organizations that insurers find favorable and offer discounts for include the Restoration Industry Association (RIA), the Building Trades Association (BTA), the Painting and Decorating Contractors of America (PDCA), and many more. It’s always worth asking the insurance company for which organizations they may offer discounts.
Taking safety precautions, keeping a safe driving record, and being smart about coverage limits and discounts are the best ways to keep the costs down on a commercial auto insurance policy. Always ask potential insurance providers what discounts they offer and how you can lower the cost of the policy. Insurance agents can actually be very forthcoming with this information.
Finding The Best Commercial Auto Insurance Company
There are several commercial auto insurance policies available to business owners through different brokers and insurance companies. The insurance company’s policy you choose will be what determines the coverage you receive, the amount you pay, and your experience as a customer. Throughout the course of our research, we analyzed several underwriters. Below, we cover what we believe are the most important things to consider when comparing commercial auto insurance companies.
The coverage options that the insurer offers might be the most important factor to consider when you’re purchasing commercial auto insurance for your business. Most insurance companies, though not all, will be capable of providing the general coverage that most people need for the business they conduct. It’s important to understand the limits and flexibility of particular companies and particular policies and to find the one that can be best tailored to your business. Several strategies exist to evaluate the coverage options of a provider without going through the hassle of getting a detailed quote.
First, read over the company’s commercial auto policy information that they provide on their website. This can take some time, as not all insurance companies do a great job of explaining their coverage options, especially when the coverage is slightly more nuanced, as is the case for commercial auto. If a company offers great optional policy extensions or has a very extensive base policy, they tend to advertise those things on their website. On the other hand, if they don’t provide much on the topic, it could mean they don’t have all that much to offer. Use the information they provide to assess their policy because it’s a good indicator of how much they value customers of their commercial auto policies.
J.D. Power also gives some insight into each insurer’s policy offering in their insurer studies, but the best way to learn about an insurer’s coverage options is to call and ask a representative. In talking with a company rep, you not only learn about the policies they offer, but you get a taste of the experience of working with this insurer. Some insurance providers automate much of their customer service, which can be frustrating when you are a customer. The best insurers will treat callers with respect and make sure to address all of their issues before hanging up the phone.
Apart from the company’s ability to offer you coverage suited for your needs, what could be more important than customer satisfaction? Customer satisfaction ratings will illustrate how customers feel about their experience and coverage with the various insurance companies. You’ll likely want to be able to navigate a useful website or speak to friendly and informative representatives on the phone when you call. The way information gets to you and the way the company interacts with you throughout the span of your relationship with them should be a major consideration.
There are multiple third-party companies that evaluate insurer reputations with their customers. The Better Business Bureau and J.D. Power are the most well known and trustworthy sources for this information.
We only reviewed companies that earned strong scores in customer service from at least one of these organizations—the BBB or J.D. Power. The customer service experience defines a policyholder’s relationship with the insurer.
Underwriter Financial Strength
The financial strength of the underwriting company is a factor that we value when choosing a provider. It’s difficult to imagine that your insurance provider could be unable to pay the value owed to you in the event of a covered loss. Still, the financial stability of a company reflects more than just their potential; it also illustrates their track record as a company.
Many of the companies we discuss below are public companies, whose financial information is publicly available for anyone interested in viewing it. If financial strength of the insurer is a sticking point for you, you can view a company’s financial documents and determine for yourself how stable and trustworthy that company is.
Fortunately, however, third-party companies review insurer debts and financial details to establish “financial strength ratings” and “stability outlooks” for insurance companies. There are several companies that do this called financial rating agencies. In our analysis, we took into consideration only the most established and trustworthy financial rating agency reports. These financial rating agencies are:
- A.M. Best – Founded in 1899, A.M. Best is a Nationally Recognized Statistical Rating Organization (NRSRO) in the United States. They focus solely on rating companies in the insurance industry.
- Moody’s Investor Service – Moody’s was founded in 1909 and is a bond credit rating business. They are also considered a NRSRO in the United States. Moody’s Investor Service is a branch of the larger Moody’s Corporation.
- Standard & Poor’s – Standard & Poor’s Financial Services LLC (S&P) is a financial services company, and another NRSRO, who provides issuer credit ratings across the financial services industry.
These companies can give some great insight into a company’s financial environment, which saves you from having to do it yourself. Each of the financial rating agencies assigns simple ratings that provide you with a gauge of a company’s financial outlook. All of the companies that we recommend are very strong according to these major rating agencies.
Pricing can be difficult to evaluate when comparing commercial auto insurance providers. Most of the time, insurers won’t (or simply can’t) provide enough insight into pricing until they get information from you. This means you usually need a quote before you can be certain of what you’ll need to pay for the coverage you seek from a particular provider. In many cases, getting a quote can be a time consuming process that requires a great deal of information and documentation.
One of the only insights into pricing you can find without acquiring and comparing quotes is the data that J.D. Power provides in their insurance industry studies. One of the metrics that they survey insurance customers on is their satisfaction with the pricing of their policies. We use this information to assess pricing for the companies we recommend. However, not all companies we recommend are on the favorable end of this spectrum, because sometimes higher quality policies are more expensive. Additionally, the ratings often encompass larger pools of information and do not speak directly to specific types of coverage such as commercial auto insurance. Still, the information that is provided can be a useful starting point if pricing is a primary concern.
Best Commercial Auto Insurance Providers
And now, our comprehensive list of the best commercial auto insurance providers of 2019. In order to determine the top list of commercial auto insurance companies, we researched all of the top commercial auto insurance providers.
Once our research was complete, we rated each company on the following factors: (1) coverage options, (2) financial strength of the underwriting company, (3) company reputation, customer service, and claims support, and lastly, (4) pricing.
Nationwide (Best Overall)
Nationwide is our top recommendation for commercial auto insurance. Founded in 1926, it has ascended to the eighth largest auto insurance company in the country and currently employs over 32,000 people. The company generated over $46 billion in U.S. revenue in 2017. They score very well in all of our categories, and there’s little they can’t do.
Nationwide’s commercial auto policy covers all the bases. It includes coverage for physical damage, liability, medical payments, collision and comprehensive insurance, and uninsured and underinsured motorist insurance. They offer a variety of add-on options as well, including roadside assistance and coverage for rental reimbursement, among many others.
Nationwide really stands out in its customer satisfaction ratings. J.D. Power awarded Nationwide as the top insurer in their 2018 U.S. Small Commercial Insurance Provider Study. The study went on to rate them as “Among the Best” in Claims, Policy Offerings, and Billing and Payment, the highest possible rating in each of those categories.
The J.D. Power study also rated Nationwide as “Among the Best” in pricing. This does not necessarily mean that their prices are the lowest among its competitors. The study emphasizes customer satisfaction in terms of value. Customers in this study felt as though they were getting great coverage for the prices they were paying.
Nationwide is also rated very high in terms of its financial strength. Over 90 years of growth and development as a company has landed them with an A+ financial strength rating from A.M. Best as well as an A1 and an A+ from Moody’s and S&P, respectively.
The extensive coverage options, elite customer satisfaction ratings, and strong financial strength in this 90+ year old insurance company makes it easy for us to recommend Nationwide as the Top Overall Insurance Company for Commercial Auto Insurance.
Progressive (Best for Truckers)
We recommend Progressive Insurance for your truck insurance needs. Progressive insures several types of trucks in all 50 states and can provide customized coverage for customers’ trucks. To top it off, they have an abundance of discounts available with their policies.
Founded in 1937, Progressive has ascended to the third largest auto insurance company in the country and currently employs over 30,000 people. They assist customers with filings by completing part of the process for their customers, offer a number of unique customer service options, and have several discounts available in many of their policy options. Famous for its voluntary pay-as-you-drive insurance program titled “Snapshot,” Progressive leads the pack in usage-based insurance. They have a plethora of more-nuanced discount opportunities as well. For example, if a customer’s business has been in operation for at least three years, that customer is eligible for a discount.
What sets Progressive above the rest in truck insurance is the highly specialized nature of their truck insurance coverage. In addition to many of the coverage options that most commercial auto insurance providers bring to the table, such as liability protection and driver protection, Progressive offers customized coverage for motor truck cargo insurance and trailer interchange insurance, among other specific trucking needs.
Motor truck cargo insurance covers the cargo being hauled by a for-hire truck driver. Recent trends show that more and more risk managers are requiring this type of coverage on the part of for-hire drivers. If a truck’s cargo is damaged in a collision or is dumped onto the highway, motor truck cargo with Progressive covers the driver’s liability or the cost to clean up debris after a spill.
Trailer interchange insurance covers liability resulting from physical damage done to a trailer while in a truck driver’s possession (that the truck driver does not own) when he is operating under a trailer interchange agreement. Collision, theft, and vandalism are all covered by this type of insurance.
Progressive was recently tagged with an A+ financial strength rating by A.M. Best. Moody’s and S&P rated them at Aa2 and AA respectively, all indicating Progressive is financially strong. The Better Business Bureau gives Progressive an A-. Additionally, they were rated as “About average” (831/1000) in customer satisfaction in J.D. Power’s 2018 U.S. Insurance Shopping Study, which indicates the company is competitive in terms of pricing, the main factor in that study.
Not only is Progressive a large insurance provider with an abundance of coverage options and unique benefits, it is well equipped to fulfill nearly all commercial auto insurance needs. Its specialization in truck insurance, however, is arguably its greatest strength. Progressive is our choice for Best Insurance Company for Truckers.
Farmers (Best for Contractors)
Farmers provides several, flexible commercial car insurance coverage options. In addition to the generally standard flexibility one would expect from a large insurance company, Farmers excels in a few niche areas of the business auto market. Contractors in particular should be sure to consider Farmers for their insurance needs.
Contractors can and should get coverage for their vehicles and the expensive tools they transport with them. Farmers offers coverage for both, but they also go much further, if you need them to. One example is that for subcontractors, Farmers provides tailored policies geared towards contracts that include indemnity agreements requiring primary and noncontributory coverage. Their ability to address these situations with their coverage options in this somewhat complicated area of a contractor’s world illustrates the extent and expertise they have in the area of commercial auto insurance for contractors.
Farmers Insurance Group was founded in downtown Los Angeles in 1928 and is currently the seventh largest insurance company in the United States. Initially providing coverage to rural farmers in California, it has grown and developed to serve as one of the most diverse and accommodating insurance companies in the nation. From financial services to pet insurance, Farmers is a viable and intriguing option.
In addition to being large, well-established and diverse, Farmers has good to excellent financial strength ratings. The company was recently issued A, A2, and A+ financial strength ratings by A.M. Best, Moody’s, and S&P, respectively.
Farmers was also rated as “About average” (836/1000) in customer satisfaction in J.D. Power’s 2018 U.S. Insurance Shopping Study, which evaluates customer satisfaction with regard to the recent purchasing of insurance and emphasizes price above all else. Finally, Farmers was rated “the rest” in J.D. Power’s Small Commercial Insurance Study (2018) with respect to “price.” It is important to remember, however, that the flexibility of the coverage options available through Farmers is often worth the price.
In summary, Farmers rates well with us in commercial auto insurance and is our Top Recommendation for Contractors.
Geico Commercial Auto (Best For Livery Insurance: Uber/Rideshare, Taxi, and Limousine)
Geico is our top recommendation for livery insurance. Livery insurance—for vehicles used by businesses that generate revenue by transporting people—is a subset of commercial auto insurance that functions a little differently depending on who provides the coverage. It is crucial to have for those who plan to transport people for hire. After our research, we feel that Geico is the best choice for livery insurance based on our criteria.
Rideshare drivers for companies like Uber or Lyft may have coverage gaps if they just cary typical auto insurance. Rideshare companies offer only some liability coverage for their drivers and don’t cover the driver’s vehicle damage. Most personal auto policies may not cover damage or injuries that occur while driving for fares either. In fact, your personal auto insurance carrier may cancel your policy over your ride-sharing activities. Livery also encompasses taxis and limousines.
Initially, Geico was not a player in the ridesharing game. They would deny claims by Uber and Lyft drivers and went as far as cancelling some policies. In the last few years, however, the company has taken tremendous strides in this area. Geico offers a hybrid rideshare policy for people who plan to transport people for hire. This policy replaces your personal auto insurance policy and covers you when you’re driving your car on or off the clock. It covers you (the driver), passengers, and property damage to your vehicle (if you have collision and comprehensive insurance). It is limited to the vehicle you drive for ridesharing purposes only, and, per usual, the price is determined on a case-by-case basis.
The biggest benefit (beyond being able to just add livery insurance to your personal auto in this hybrid fashion) is that Geico covers you in all stages of the ridesharing trip, instead of just certain stages of the trip. That is, ridesharing companies like Uber and Lyft break down the driving experience into a few different stages (rideshare app is off; rideshare app is on; driving to pick up; transporting passengers). They will cover occurrences during particular stages of the job only. Geico offers coverage for all stages.
Geico started out providing auto insurance to government employees in 1936. It is now the second largest auto insurer in the United States. They received an A- rating from the BBB, which means they do a good job of keeping their customers happy. Their financial strength ratings are excellent as well. A.M. Best rates them with an A++, and Moody’s pinned them with an AA+ in financial strength. And while Pricing is a difficult metric to fairly portray, J.D. Power’s 2018 U.S. Insurance Shopping Study rated Geico as “About average” (844/1000) in customer satisfaction. The study emphasizes pricing.
Geico is a solid choice for commercial auto insurance coverage. The company rates well in our analysis. And even though they were relatively late to the Uber- and Lyft-related insurance game, Geico has since implemented this hybrid policy that, along with its tremendous experience in auto insurance coverage and strong financial backing, is capable of providing coverage to anyone in this business in 41 states. For this, we rate Geico as the Best for Livery Insurance.