It seems there are as many different options of Business Auto Insurance as there are business vehicles on the road, but we can break down the categories using a few simple metrics.

Rating Metrics

The first consideration is whether we are talking about private passenger vehicles or trucks. Regular cars used in business are one category. Trucks are then categorized by weight:

  • up to 10,000 pounds
  • 10,000 to 20,000 pounds
  • 20,000 to 45,000 pounds
  • and higher than 45,000 pounds fully laden

There is a direct correlation between size and cost: the heavier the truck the higher the premium.

The “use” classification of the vehicle is another factor that recognizes how the vehicle is used during the day, such as whether it’s on the road or sitting in a parking lot or on a job site. There are three categories here:

  • Service – for vehicles that are usually parked most of the day, such as a contractor going to the same job site every day
  • Retail – for vehicles that deliver things to retail customers
  • Commercial – for vehicles that deliver products or visit multiple commercial locations during the day

Another factor considered in determining rate is the “territory,” This factor reflects the relationship between road density and accident frequency. Urban territories have higher rates because there are more vehicles on the road than in suburban or rural areas. This category considers the “garaging” location, that is where the vehicle spends the night, as its primary reference point. A corollary to territory is the radius driven from the main garaging location, with an under 50 mile radius being the smallest, 50-250 the next area, and an over 250 mile radius for longer distance driving.

Fleet vs. Non-fleet

When a company owns five or more vehicles they are insured as a “fleet.”  A fleet will cost less to insure than five cars written with five different companies because experience develops a better predictive credibility.  Greater predictability, used by projecting past losses into the future, is a tool underwriters use to predict future losses. With fleets programs especially, we encourage driver and vehicle safety programs to reduce claims frequency, inherently keeping future insurance costs down.


Business Auto coverage is similar to Personal Auto coverage, with a combination of liability coverage( when you’re at fault and cause damage to someone else) and physical damage coverage (collision and comprehensive) regardless of fault.

One exception to the structure of a business automobile insurance policy is with liability. This refers to your legal obligation to other drivers if you are at fault in an accident. The personal auto policy breaks down different amounts for when you damage someone else’s property (like their car) versus when you injure someone (bodily injury). Rather than have separate amounts for each of these, a commercial policy usually provides a single limit of insurance for any kind of liability. The most common combined single limit amount is $1 million.

Similar to Personal Auto insurance, with commercial vehicles you have the option of ensuring them for damage to the vehicles themselves, whether you’re at fault or not. Thus, collision and comprehensive coverage (everything other than collision, including theft or vandalism) are available for purchase, and whether your opt to include this on your policy or not is still dictated in part by any financing entity that often requires this coverage.

A Business Auto policy will also include coverage for employees or others when someone else is at fault but has no insurance, as well as optional coverage for medical benefits that are needed in the event of an accident..