How the Type of Vehicle Affects Your Commercial Auto Insurance Costs

Navigating commercial auto insurance can be challenging, especially when considering how your vehicle type impacts your costs. Various factors play a crucial role in determining your insurance premiums, from the size and age of the vehicle to its usage and the specific risks associated with your industry. Understanding these factors can help you to make well-informed choices, effectively control your costs and adequately safeguard your business.

Factors That Influence Commercial Auto Insurance Premiums

The following factors may influence the cost of commercial auto insurance:

• Vehicle size and type—Larger vehicles, such as trucks and vans, typically incur higher insurance costs compared to smaller vehicles like sedans. This is because larger vehicles can cause more damage in an accident, leading to higher claims. Additionally, specialized vehicles, such as those used for transporting hazardous materials, may also attract higher premiums due to the increased risk involved.
• Vehicle age and value—Newer vehicles frequently include advanced safety features that can lower the chances of accidents. However, their higher market value makes them more costly to repair or replace, potentially raising insurance premiums. On the other hand, older vehicles may be less expensive to insure, but they often lack modern safety features, which could result in higher risk evaluations by insurers.
• Usage and mileage—How you use your commercial vehicle and the distance it travels annually are crucial factors. Vehicles that are used frequently or for long distances are more likely to be involved in accidents, thus increasing insurance costs.
• Industry-specific risks—The nature of your business also impacts insurance rates. Industries with higher risks, such as construction or logistics, often face higher premiums due to the increased likelihood of accidents and claims. For example, a construction company’s fleet of heavy-duty trucks will generally cost more to insure than a consulting firm’s passenger cars.

Learn More

For commercial auto insurance near you, contact Universal Insurance Services.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.