Why Is Commercial Auto Insurance So Expensive?


Commercial auto insurance is one of those things that we take for granted. We know that it’s important to have it, and we usually don’t even think about it. But if something bad happened while we were driving our company car, we’d really be in trouble. Why is commercial auto insurance so expensive? And how can you save money on your policy? In this blog post, we’ll explore these questions and more. We hope that by understanding the reasons commercial auto insurance is so expensive, you can find ways to save money on your policy.

The History of Commercial Auto Insurance

The history of commercial auto insurance is a long and complicated one. In general, commercial auto insurance rates are much higher than personal auto insurance rates because commercial vehicles are typically driven in more hazardous environments, have heavier hitting capacities, and are driven by larger fleets.

Commercial auto insurance was first developed to protect businesses from the financial consequences of crashes involving their vehicles. Prior to the development of commercial Auto Insurance, business owners would often bear the entire cost of car accidents that impacted their business. This led to a number of wrecks that resulted in huge financial losses for businesses.

In 1938, The Automobile Club of America (ACA) formed an insurance committee to study the issue of crash prevention for businesses. The committee came up with the idea of developing Commercial Auto Insurance as a way to help businesses cover the costs associated with car accidents. The first policies were issued in 1941 and initially only covered losses due to collisions between automobiles and other vehicles on highways.

Over time, Commercial Auto Insurance has evolved into what it is today- a specialized type of insurance designed specifically for use by businesses. Today, Commercial Auto Insurance covers a wide range of risks that could impact a business’s operations- from car accidents involving drivers who are not employees or contractors, to property damage caused by collisions between business vehicles and pedestrians or cars parked on company property.

The high cost of Commercial Auto Insurance is generally due to the fact that these policies tend to have higher levels of coverage than personal auto insurance policies. This includes coverage for property damage, comprehensive and collision insurance, as well as liability insurance.

While Commercial Auto Insurance is still commonly used by businesses, it is also increasingly being offered to consumers as an option for buying car insurance. This is due in part to the fact that Commercial Auto Insurance policies tend to have lower rates than personal auto insurance policies, and also because many commercial drivers are required to carry liability insurance.

Factors That Affect Rates

Commercial auto insurance is expensive because there are a variety of factors that affect rates. These factors include the type of vehicle being insured, the location of where the vehicle is located, and the driving record of the policyholder. Each factor can have a significant impact on rates.

How to Minimize Your Risk

Commercial auto insurance is expensive for a reason: It’s designed to protect you and your business. Here are five ways to minimize your risk:

  1. Set up a company policy. Commercial auto insurance is often tailored to protect businesses of all sizes, so it’s important to get coverage that reflects your specific needs. Look into policies offered by your regional insurer or through an online provider.
  2. Make sure your vehicle meets safety standards. A properly maintained vehicle will reduce your risk of accidents, making commercial auto insurance less necessary. Inspect cars and trucks regularly for mechanical problems, such as improper brakes, fuel lines, tires or lighting systems. Report any issues to the manufacturer or dealership immediately.
  3. Insure employees and contractors properly. All drivers who use your business’ vehicles should have valid driver’s licenses and be insured under your policy—even if they don’t work for you full time. This includes employees driving company vehicles during their breaks or while grocery shopping – even if they aren’t driving company property at the time! Encourage contractor drivers to carry adequate liability coverage in case of an accident on their personal vehicle(s).
  4. Plan for unexpected events. Don’t forget about uninsured motorists and road debris, which can cause serious accidents on busy highways – even in suburban areas! Make sure you have enough financial resources to cover any potential losses from these types of accidents.
  5. Review your policy regularly. Keep up to date on changes in law, which can impact your coverage. Check with your insurer to find out what changes have been made recently and whether they may affect you.

How to Shop for Auto Insurance

Auto insurance rates can vary a lot depending on your geographical location, your driving record, and the type of vehicle you drive. To get an accurate quote, it’s important to shop around. There are several ways to find the best rates.

One way to save money on your auto insurance is to compare quotes from multiple companies. You can do this online or by calling multiple insurers. By comparing prices, you’ll be able to find the best deal for your needs.

You can also try finding a policy that covers both your personal and commercial vehicles. This will give you more protection in case of an accident. Make sure you read the fine print of any policy you’re considering, as some do not cover certain types of vehicles or drivers.

Finally, make sure to have up-to-date insurance documentation in case of an accident. This includes your driver’s license, proof of liability insurance (if required), and car registration documents. Having this information handy will help speed up the process of getting necessary documentation from other drivers involved in the accident.


There are a lot of factors that contribute to the high cost of commercial auto insurance. Age, location, and type of business can all affect rates. Some things you can do to decrease your premium include keeping detailed records of accidents and incidents, maintaining a clean driving record, and preforming regular safety inspections. You also can consider obtaining supplemental insurance such as property damage liability or medical payments coverage. Whatever you do, make sure to talk to an insurance agent about your specific situation so you can get a quote that reflects your unique risks.