Any business that owns vehicles needs commercial auto insurance, but it can be expensive. Commercial auto insurance costs an average of anywhere between $750 to $1,200 a year per vehicle. The type of vehicle matters when calculating cost. The average cost of insuring a semi-truck, for example, is $1,575 a year.
To know how to lower your commercial auto insurance rates, it’s important to first understand what affects the cost.
Why is Commercial Auto Insurance Expensive?
Certain commercial vehicles require more insurance due to their size or the type of cargo they carry. More coverage means higher premiums. Other factors that influence the cost of your commercial auto insurance includes:
• Distance being traveled
• Driver experience
• Company’s claims history
• Vehicle make and model
• Value of the vehicle
• Number of vehicles on the policy
• Purpose of use for the vehicle
Even if the insured (the business owner who owns the policy) has a good driving record, that won’t always mean that your commercial auto insurance rates will be low. The drivers you employ can also affect your commercial auto insurance rates. Inexperienced drivers or drivers with a bad record can hike up your insurance rates. If your company has a long history of insurance claims, your premiums are also likely to be higher.
For some vehicles, high insurance premiums are inevitable due to the nature of their use. Vehicles that transport hazardous substances will cost more to insure due to the danger they present.
Ways to Lower Your Commercial Auto Insurance Rates
Considering what affects your commercial auto insurance rates, you can take measures to lower them.
1. Conduct extensive background checks on all drivers
2. Choose a higher deductible. You’ll have to pay more if an accident does occur, but your monthly premiums will be lower.
3. Get quotes from multiple insurance companies to find the best price
4. Ask about discounts
5. Pay in full. Some insurance companies provide discounts to business owners who pay in full.
6. Set up an auto draft. An auto draft can also earn you a discount and cuts out any possible filing or processing fees.
7. Bundle your business policies
8. Invest in anti-theft devices for vehicles
9. Purchase vehicles with high safety ratings
10. Trim extra coverage
Although more coverage means higher premiums, it’s still important to have enough auto insurance to protect your company’s commercial vehicles.