Commercial Auto Insurance Requirements By State - Find Out More!

If you own or operate a vehicle for business purposes, you need commercial auto insurance. Commercial auto insurance protects you and your business from the financial consequences of accidents involving your vehicle. It covers bodily injury and property damage liability, as well as medical payments, uninsured/underinsured motorist, collision, and comprehensive coverage.

Commercial auto insurance is different from personal auto insurance in several ways. First, commercial auto insurance typically has higher liability limits than personal auto insurance, because business vehicles face more risks and potential lawsuits. Second, commercial auto insurance covers a wider range of vehicles, such as trucks, vans, buses, trailers, and taxis. Third, commercial auto insurance covers more drivers than personal auto insurance, such as employees, contractors, and customers.

Having commercial auto insurance can benefit your business in many ways. It can help you comply with state and federal regulations, avoid fines and penalties, protect your assets and reputation, and attract and retain customers. In this article, we will explain the commercial auto insurance requirements by state, the factors that affect commercial auto insurance rates, and how to compare and shop for commercial auto insurance.

Commercial Auto Insurance Requirements By State

The first step to getting commercial auto insurance is to determine if your vehicle qualifies as a commercial vehicle. Generally speaking, a vehicle is considered a commercial vehicle if it is used for any of the following purposes:

• Transporting goods or passengers for a fee
• Hauling tools or equipment for your trade or profession
• Delivering goods or services for your business
• Driving to multiple locations for your business
• Displaying a business name or logo on your vehicle
• Leasing or renting your vehicle to others

If your vehicle meets any of these criteria, you need commercial auto insurance. The next step is to find out the minimum liability limits for commercial auto insurance in your state. Liability coverage pays for the damages and injuries that you cause to others in an accident. Each state has its own minimum liability requirements for commercial vehicles, which are usually higher than those for personal vehicles.

The table below shows the minimum liability limits for commercial auto insurance by state as of 2021. Note that these are only the minimum requirements and you may need higher limits depending on your business type and size.

State	Minimum Liability Limits
Alabama	$25,000 per person/$50,000 per accident for bodily injury; $25,000 per accident for property damage
Alaska	$50,000 per person/$100,000 per accident for bodily injury; $25,000 per accident for property damage
Arizona	$15,000 per person/$30,000 per accident for bodily injury; $10,000 per accident for property damage
Arkansas	$25,000 per person/$50,000 per accident for bodily injury; $25,000 per accident for property damage
California	$15,000 per person/$30,000 per accident for bodily injury; $5,000 per accident for property damage
Colorado	$25,000 per person/$50,000 per accident for bodily injury; $15,000 per accident for property damage
Connecticut	$20,000 per person/$40,000 per accident for bodily injury; $10,000 per accident for property damage
Delaware	$25,000 per person/$50,000 per accident for bodily injury; $10,000 per accident for property damage
Florida	$10,000 per person/$20,000 per accident for bodily injury; $10,000 per accident for property damage
Georgia	$25,000 per person/$50,000 per accident for bodily injury; $25,000 per accident for property damage
Hawaii	$20,000 per person/$40,000 per accident for bodily injury; $10,000 per accident for property damage
Idaho	$25,000 per person/$50,000 per accident for bodily injury; $15,000 per accident for property damage

Indiana	$25,000 per person/$50,000 per accident for bodily injury; $25,000 per accident for property damage
Iowa	$20,000 per person/$40,000 per accident for bodily injury; $15,000 per accident for property damage
Kansas	$25,000 per person/$50,000 per accident for bodily injury; $25,000 per accident for property damage
Kentucky	$25,000 per person/$50,000 per accident for bodily injury; $25,000 per accident for property damage
Louisiana	$15,000 per person/$30,000 per accident for bodily injury; $25,000 per accident for property damage
Maine	$50,000 per person/$100,000 per accident for bodily injury; $25,000 per accident for property damage
Maryland	$30,000 per person/$60,000 per accident for bodily injury; $15,000 per accident for property damage
Massachusetts	$20,000 per person/$40,000 per accident for bodily injury; $5,000 per accident for property damage
Michigan	$20,000 per person/$40,000 per accident for bodily injury; $10,000 per accident for property damage
Minnesota	$30,000 per person/$60,000 per accident for bodily injury; $10,000 per accident for property damage
Mississippi	$25,000 per person/$50,000 per accident for bodily injury; $25,000 per accident for property damage
Missouri	$25,000 per person/$50,000 per accident for bodily injury; $25,000 per accident for property damage
Montana	$25,000 per person/$50,000 per accident for bodily injury; $20,000 per accident for property damage
Nebraska	$25,000 per person/$50,000 per accident for bodily injury; $25,000 per accident for property damage
Nevada	$25,000 per person/$50,000 per accident for bodily injury; $20,000 per accident for property damage
New Hampshire	No minimum liability requirements (but proof of financial responsibility required)
New Jersey	$15,000 per person/$30,000 per accident for bodily injury; $5,000 per accident for property damage
New Mexico	$25,000 per person/$50,000 per accident for bodily injury; $10,000 per accident for property damage

New York	$25,000 per person/$50,000 per accident for bodily injury; $10,000 per accident for property damage
North Carolina	$30,000 per person/$60,000 per accident for bodily injury; $25,000 per accident for property damage
North Dakota	$25,000 per person/$50,000 per accident for bodily injury; $25,000 per accident for property damage
Ohio	$25,000 per person/$50,000 per accident for bodily injury; $25,000 per accident for property damage
Oklahoma	$25,000 per person/$50,000 per accident for bodily injury; $25,000 per accident for property damage
Oregon	$25,000 per person/$50,000 per accident for bodily injury; $20,000 per accident for property damage
Pennsylvania	$15,000 per person/$30,000 per accident for bodily injury; $5,000 per accident for property damage
Rhode Island	$25,000 per person/$50,000 per accident for bodily injury; $25,000 per accident for property damage
South Carolina	$25,000 per person/$50,000 per accident for bodily injury; $25,000 per accident for property damage
South Dakota	$25,000 per person/$50,000 per accident for bodily injury; $25,000 per accident for property damage
Tennessee	$25,000 per person/$50,000 per accident for bodily injury; $15,000 per accident for property damage
Texas	$30,000 per person/$60,000 per accident for bodily injury; $25,000 per accident for property damage
Utah	$25,000 per person/$65,000 per accident for bodily injury; $15,000 per accident for property damage

Vermont	$25,000 per person/$50,000 per accident for bodily injury; $10,000 per accident for property damage
Virginia	$25,000 per person/$50,000 per accident for bodily injury; $20,000 per accident for property damage
Washington	$25,000 per person/$50,000 per accident for bodily injury; $10,000 per accident for property damage
West Virginia	$25,000 per person/$50,000 per accident for bodily injury; $25,000 per accident for property damage
Wisconsin	$25,000 per person/$50,000 per accident for bodily injury; $10,000 per accident for property damage
Wyoming	$25,000 per person/$50,000 per accident for bodily injury; $20,000 per accident for property damage

 

In addition to the minimum liability limits, some states also require commercial vehicles to have other types of coverage, such as personal injury protection (PIP), uninsured/underinsured motorist (UM/UIM), and cargo coverage. You should check with your state’s department of motor vehicles or insurance to find out the exact requirements for your commercial vehicle.

Besides the mandatory coverages, you can also add optional coverages to your commercial auto insurance policy to enhance your protection. Some of the common optional coverages are:

• Medical payments: This covers the medical expenses of you and your passengers in an accident, regardless of fault.
• Collision: This covers the damage to your vehicle caused by a collision with another vehicle or object.
• Comprehensive: This covers the damage to your vehicle caused by events other than collision, such as fire, theft, vandalism, or weather.
• Rental reimbursement: This covers the cost of renting a replacement vehicle while your vehicle is being repaired after a covered loss.
• Towing and roadside assistance: This covers the cost of towing and emergency services if your vehicle breaks down or gets stuck on the road.
• Gap insurance: This covers the difference between the actual cash value of your vehicle and the amount you owe on your loan or lease if your vehicle is totaled in an accident.

Depending on your business needs and preferences, you can customize your commercial auto insurance policy with the coverages that suit you best.

Factors That Affect Commercial Auto Insurance Rates

Commercial auto insurance rates vary depending on several factors. Insurance companies use these factors to assess the risk level of insuring your commercial vehicle and charge you accordingly. Some of the factors that can affect your commercial auto insurance rates are:

• Your vehicle type: The type of vehicle you drive can influence your commercial auto insurance rates. Generally, larger and heavier vehicles cost more to insure than smaller and lighter ones. This is because larger and heavier vehicles can cause more damage and injuries in an accident. Also, vehicles that are more expensive or rare cost more to insure than vehicles that are cheaper or common. This is because expensive or rare vehicles have higher repair or replacement costs.
• Your vehicle usage: The way you use your vehicle can also affect your commercial auto insurance rates. Generally the more you drive your vehicle, the higher your rates will be. This is because more driving means more exposure to accidents and claims. Also, the purpose of your driving can influence your rates. For example, if you use your vehicle to transport goods or passengers for a fee, you may pay more than if you use your vehicle to deliver goods or services for your own business.

• Your driving history: Your driving history can have a significant impact on your commercial auto insurance rates. Insurance companies look at your past driving record to determine how likely you are to file a claim in the future. If you have a history of accidents, violations, or claims, you may pay more than if you have a clean driving record. Also, if you have any drivers on your policy who have a poor driving history, they may increase your rates as well.
• Your location: Your location can also affect your commercial auto insurance rates. Insurance companies consider the traffic conditions, road quality, weather patterns, crime rates, and accident statistics in your area to calculate your rates. If you live or operate in an area that has high traffic congestion, poor road maintenance, severe weather, high crime rates, or frequent accidents, you may pay more than if you live or operate in an area that has low traffic congestion, good road maintenance, mild weather, low crime rates, or rare accidents.
• Your coverage and deductible: Your coverage and deductible can also influence your commercial auto insurance rates. Coverage refers to the types and amounts of protection that you have on your policy. Deductible refers to the amount of money that you have to pay out of pocket before your insurance kicks in. Generally, the more coverage and lower deductible you have, the higher your rates will be. This is because more coverage and lower deductible mean more financial responsibility for the insurance company. Conversely, the less coverage and higher deductible you have, the lower your rates will be. This is because less coverage and higher deductible mean less financial responsibility for the insurance company.

How to Compare and Shop for Commercial Auto Insurance

Now that you know the commercial auto insurance requirements by state and the factors that affect commercial auto insurance rates, you may wonder how to compare and shop for commercial auto insurance. Here are some steps to help you find the best commercial auto insurance policy for your business needs and budget:

• Get a commercial auto insurance quote: The first step to compare and shop for commercial auto insurance is to get a quote from an insurance company or an agent. A quote is an estimate of how much you will pay for a certain policy based on your information and preferences. You can get a quote online, over the phone, or in person. To get a quote, you will need to provide some basic information about yourself, your business, your vehicle, and your desired coverage and deductible. You can also ask for discounts that may apply to you, such as multi-policy, multi-vehicle multi-policy, multi-vehicle, safe driver, or loyalty discounts.
• Compare commercial auto insurance policies and providers: The next step to compare and shop for commercial auto insurance is to compare different policies and providers. You should compare not only the price, but also the coverage, deductible, customer service, reputation, and financial strength of each policy and provider. You can use online tools, such as comparison websites, reviews, ratings, and testimonials, to help you compare different options. You can also ask for referrals from your friends, family, or business associates who have commercial auto insurance.
• Choose the best commercial auto insurance policy for your business needs and budget: The final step to compare and shop for commercial auto insurance is to choose the best policy for your business needs and budget. You should choose a policy that provides adequate coverage for your vehicle and your business activities, but also fits your budget. You should also choose a provider that offers reliable customer service, fast claims processing, and flexible payment options. You should review your policy carefully before signing it and make sure you understand all the terms and conditions. You should also keep a copy of your policy and your proof of insurance in a safe place.

Conclusion

Commercial auto insurance is a must-have for any business that owns or operates a vehicle for business purposes. It protects you and your business from the financial consequences of accidents involving your vehicle. It covers bodily injury and property damage liability, as well as medical payments, uninsured/underinsured motorist, collision, and comprehensive coverage.

Commercial auto insurance requirements vary by state. Each state has its own minimum liability limits for commercial vehicles, which are usually higher than those for personal vehicles. Some states also require other types of coverage, such as personal injury protection, uninsured/underinsured motorist, and cargo coverage. You should check with your state’s department of motor vehicles or insurance to find out the exact requirements for your commercial vehicle.

Commercial auto insurance rates depend on several factors. Insurance companies use these factors to assess the risk level of insuring your commercial vehicle and charge you accordingly. Some of the factors that can affect your commercial auto insurance rates are your vehicle type, your vehicle usage, your driving history, your location, your coverage, and your deductible.

To compare and shop for commercial auto insurance, you should follow these steps: get a quote from an insurance company or an agent; compare different policies and providers; and choose the best policy for your business needs and budget. You should also review your policy carefully before signing it and keep a copy of it and your proof of insurance in a safe place.

If you are looking for a free commercial auto insurance quote, you can contact us today. We are an independent insurance agency that works with multiple reputable insurance companies to find you the best commercial auto insurance policy at the best price. We can help you customize your policy with the coverages that suit you best and save you money with discounts that apply to you. We can also answer any questions you may have about commercial auto insurance and provide you with excellent customer service. Don’t wait any longer - get a free commercial auto insurance quote from us today!