Cost of Commercial Auto Insurance in Texas
The cost of commercial car insurance in Texas is not fixed; it is determined by some factors, including:
The gross weight of the vehicle: Trucks weighing over 10,000 GVW require specialized commercial auto insurance, which is slightly more expensive than the average one.
Cost of a new vehicle: The more valuable your commercial vehicle is, the higher the cost of insuring it.
Type of vehicle and use: The cost of insuring a delivery vehicle is typically higher than that of a food truck. This is because a delivery vehicle is on the road more often than a food truck, and the probability of getting involved in an accident is higher.
Number of vehicles in the fleet: The more vehicles that need to be insured, the the more expensive the policy.
Model and year of production of the vehicle: A new model vehicle is more valuable, and the probability of it being stolen is high; therefore, insuring it is more costly.
Coverage options: Commercial auto insurance will increase depending on the amount of coverage on your policy.
Claims history of a business: A business with a history of filing multiple claims will have a higher premium because insurers consider it riskier to insure.
In spite of the factors that affect commercial car insurance rates in Texas, the coverage type is also a major cost determinant. The various types of commercial auto insurance in Texas and their premium range include:
- Comprehensive Insurance:
This package covers damages to your commercial vehicle from causes other than accidents. It covers damages caused by fire, storm, hurricane, vandalism, etc. A comprehensive insurance policy in Texas costs about $12 - $16 monthly with a coverage limit of $1 million per occurrence. With Texas being very prone to hurricanes, this policy will go a long way in sharing the burden, if it ever arises.
- Collision Insurance:
Collision insurance provides collision coverage for your commercial vehicle in the event of an accident. The average cost for collision insurance is roughly around $25 - $34 per month per $1 million of coverage.
- Liability Insurance:
With Texas being an at fault state, this policy offers liability protection to the third party. It provides property damage liability and offers bodily injury liability coverage, resulting from an auto accident caused by your commercial vehicle. Liability is considered the minimum coverage car insurance for both Private and Commercial auto insurance in Texas. This coverage costs about $50 - $58 monthly per $1,000,000 of coverage. If you are looking for cheap coverage, pure liability is the lowest possible option.
- Uninsured/Underinsured Motorist Insurance:
This commercial insurance covers medical expenses and other bills for the driver and passengers, in the event of an accident caused by an uninsured/underinsured driver. This package costs about $6 - $9 per month with a coverage limit of $1,000,000 per accident.
- Personal Injury Protection Insurance:
This coverage covers the medical expenses of the driver of a commercial vehicle and passengers, regardless of who's at fault. The majority of delivery and livery vehicles in Texas carry personal injury protection coverage. The price of this coverage is about $33 - $42 monthly with a coverage limit of $1,000,000 per occurrence.
- Gap Insurance:
If your commercial vehicle is gotten on a lease, gap insurance protects the lender from incurring any loss, if the vehicle is totaled. Gap insurance costs about $16 - $25 per month for a coverage limit of 5% of the loan value.
- Medical Payments Insurance:
This policy covers the medical expenses incurred by the driver while driving a commercial vehicle. This coverage is about $8 - $17 monthly with a coverage limit of up to $25,000 per occurrence.
- Hired and Not Owned Liability Insurance:
If your business strongly depends on leased or hired vehicles, and one of the vehicles is involved in an accident, this coverage will cover the medical expenses of the driver and vehicle repairs. This coverage costs about $125 - $135 per month.
- Inland Marine Insurance:
This coverage indemnifies loss to products or equipment that is transportable on land. This policy costs about $8 - $17 monthly per $5,000 of coverage.
Consult with a licensed commercial auto Texas insurance agent to get personalized quotes on how much commercial auto insurance will cost you.
Is Commercial Auto Insurance More Expensive than Personal Auto?
Commercial auto insurance tends to be more expensive than private auto, usually due to higher coverage limits - especially for Liability coverage, where it protects the business’ exposure to being sued. Do not forget that if you lease a vehicle in the name of the business, regardless of use, it must be covered with commercial auto insurance, which will be more expensive than personal auto coverage.
How Much Should I Pay for Commercial Auto Insurance in Texas?
The cost of a policyholder’s commercial car insurance in Texas is determined by the liabilities associated with the business and how much risk the insurance company is willing to cover. The amount is determined by different variables like:
Where the Vehicle is Parked: Where the commercial vehicle is parked during and after business hours will greatly affect the cost of the insurance policy. For instance, if the business-owned delivery truck is usually parked overnight in a company garage, the business may be expected to pay less for the commercial auto insurance coverage, than if the vehicle was always parked along the busy road, being exposed to many more risks.
How Much the Vehicle is Driven: If the business operates in regions that experience heavy traffic, or if the vehicle commutes beyond the average commuting distance, the policy may be more expensive. This is because the risk for accidents increases with time spent on the road.
Driving Records: Whoever drives the vehicle on behalf of the company should have a clean driving record. If the driver has a history of collisions and accidents, it could mean paying higher for the commercial auto insurance policy.
Safety Devices: If the commercial vehicle(s) are equipped with safety gadgets like GPS, The cost of a business liability monthly insurance premium in Texas is determined by: anti-lock brakes, daytime running lights, etc., the cost of commercial auto insurance will be reduced. This is because these features/devices may reduce the severity of an accident.
Coverage Limits: The higher the coverage limits, the higher the policy rates will be, and vice versa. However, selecting lower coverage options to reduce cost will leave the commercial vehicle unprotected and highly vulnerable in the event of a collision or accident. This is because the business would have to cover all or most of the costs of incurred damages.
You can speak to a state-licensed commercial auto insurance professional for more information on the cost of commercial auto insurance in Texas. After assessing your fleet needs, a knowledgeable agent can help you find affordable car insurance for your business.
How to Understand the Cost of Commercial Auto Insurance?
To understand the cost of commercial car insurance in Texas, you will need to understand the various factors that influence it. Similar to private auto insurance, the cost of commercial vehicle insurance depends on:
Deductibles: A deductible is the amount of money a business pays out of pocket in the event of an insured peril. When your business-owned vehicle is involved in an accident, the agreed amount of deductible is deducted from your claim payment. For instance, if you have a $1,000 deductible and your insurer determines that you have incurred a loss of $8,000, you will receive a payout amount of $7,000 (damage minus the deductible. A deductible is a form of risk-sharing between the insured business and the insurer. The higher the amount of your deductible, the lesser your insurance premiums would be. However, if your deductible is very high, you could be cash trapped after a covered peril because you would have to pay majorly out of pocket for any repair or replacement.
Credit Score: The business credit score is one of the main factors used in determining your insurance costs. The better the business's credit, the lower the commercial auto insurance rates.
Coverage Option: There are several coverage options; the more coverage you add to the business’ policy, the higher the insurance policy would be.
Claims History: If the business has a history of requesting claims, the insurance policy might be higher than the average cost because the business will be viewed as a higher risk.
Location: Your commercial auto insurance cost also depends on where the business is conducted. Your commercial auto insurance will typically be on the high side, if the business is located in an area prone to flooding, theft, or if it has bad roads.
An insurance premium is the cost of your insurance per the chosen payment period. In other words, an insurance premium is an amount paid for insurance policies provided by the insurance company. Insurance premiums can be paid annually, semi-annually, or monthly. The insurance company decides how it wants it paid. Insurance companies typically prefer an upfront payment.
For further clarification on what affects the cost of commercial auto insurance, consult a Texas-licensed commercial insurance expert.
What is the Average Cost of Commercial Auto Insurance in Texas?
The average cost for full coverage car insurance in Texas ranges from $600 to $2,400 per year. Generally, an insurance provider considers factors like the vehicle type, claims history, coverage options, and deductibles when determining the cost of your commercial auto policy. Different businesses require different types of coverages, and this majorly affects the cost of your commercial auto insurance premium. For instance, if your business requires a semi truck to carry out business, it means your business would need liability, UM/UIM, collision, inland marine coverage to cover cargo in transportation, etc.
Listed below are the price ranges for the average costs for various types of commercial auto insurance coverages:
| Commercial Auto Insurance Type | Average Annual cost in Texas | Coverage Amount |
| Comprehensive insurance | $150 - $200 | $1,000,000 |
| Collision insurance | $300 - $400 | $1,000,000 |
| Liability insurance | $600 - $700 | $1,000,000 |
| Uninsured/underinsured motorist insurance | $75 - $100 | $1,000,000 |
| Gap insurance | $200 - $300 | 5% of loan amount |
| Personal injury protection insurance | $400 - $500 | $1,000,000 |
| Inland marine insurance | $100 - $200 | $5,000 |
| Medical payment insurance | $100 - $200 | $25,000 |
| Hired and not owned liability insurance | $200 - $300 | - |
However, it is important to engage the services of a commercial insurance agent who will help you select the best commercial auto insurance policy with coverage options that will suit your needs.
How Much is Typical Commercial Auto Insurance?
Commercial auto insurance policies are always more expensive than private auto insurance. For example, a $45,000 vehicle leased in the business name that someone drives daily with a $500 deductible all around, will cost around $1,800 - $2,500 a year to insure through a TX commercial insurance agent (compared with $1,200-$1,500 per year - if it was registered as a personal vehicle and had private auto coverage).
However, typical commercial auto insurance varies from $600 to $2,400 annually for coverage of up to $1,000,000. The cost of your commercial auto insurance policy largely depends on your:
Type of vehicles owned by the company
Number of vehicles in the fleet
Business type
Coverage type
Claims history
Location, etc.
How Much is Commercial Auto Insurance Premium?
Texas car insurance premiums usually cost between $50 and $200 monthly and may be paid annually. The Texas Department of Insurance can help you get a fair insurance rate by comparing rates and helping you gather some information that will help you understand your insurance policy better.
How Much Does Commercial Auto Insurance Cost?
The cost of your commercial auto insurance depends on your type of vehicle, liability limits, driver’s driving history, and coverage choice. The annual cost of commercial auto insurance per vehicle in Texas ranges between $600 and $2,400. The cost of your commercial auto insurance can be even higher if your commercial vehicle:
Weighs more than 10,000 pounds
Has reported accidents or collisions in the last three years
Requires more speed than normal to offer proper service delivery
How Much is Commercial Auto Insurance Per Month?
Paying your Texas commercial auto insurance premium annually reduces your premium amount, this is because a one-time full payment requires less processing. Commercial auto insurance can also be paid monthly through a premium financing company. The premium financers pay the premium upfront or in full, while the business pays back the loaned amount in monthly installments with an added interest.
The cost of a commercial auto monthly insurance premium in Texas is determined by:
Type of Commercial Vehicle: The type of vehicle used for your business also affects your premium. For instance, the cost of insuring a delivery truck varies from the cost of insuring a car a business owner leases for personal use on a business lease.
Nature of Business: Some businesses are riskier than others. For instance, a truck transporting timber from forests is more prone to accidents than a van that delivers packages within the town.
The Vehicle’s Use: For instance, your insurers may ask if your vehicle is used to deliver packages, transport people or supplies, or carry hazardous materials. If it is used for carrying hazardous materials, your liability risks will be increased, consequently raising the cost of insuring the vehicle.
Premium Financing Interest Rate: By choosing to pay monthly, you may be paying 7.5% - 12% interest in addition to the financed portion of the premium.
Down Payment amount: Usually around 17% (or 2/12th) of the annual premium.
Number of payment months: The most common is 10 months, after receiving the downpayment of 2 months, but it is possible to finance a 1-year policy over 3 years (36 months)
Below is an example of monthly premiums for commercial auto insurance when a business uses premium finance instead of paying the annual price in full.
| Annual Cost of Coverage | $2,000 | $2,000 | $50,000 | $50,000 |
| Down Payment | 17% | 17% | 17% | 17% |
| $340 | $340 | $8,500 | $8,500 | |
| Unpaid Premium Balance | $1,660 | $1,660 | $41,500 | $41,500 |
| Premium Finance Rate | 7.5% | 12.0% | 7.5% | 12.0% |
| Number of Monthly Payments | 10 | 10 | 10 | 10 |
| Estimated Monthly Loan Installment Payment | $171.76 | $175.27 | $4,293.99 | $4,381.66 |
How Much Does a Commercial Auto Insurance Policy Cost?
Although there is no fixed cost on commercial auto insurance in Texas, it is usually between $600 to $2,400. Commercial car insurance policy cost is largely dependent on the risks covered by the insurance company. It is influenced by several variables, including the type of vehicle, the vehicle's value, nature of business the vehicle is used for, safety devices installed in the vehicle, and deductibles. Before purchasing a commercial auto insurance policy, you should try to get at least three commercial auto insurance quotes from different insurance providers. Your insurance agent can help you compare these various car insurance companies. Comparing quotes will help you identify the most suitable commercial auto insurance policy that provides the most comprehensive coverage at the cheapest rates.
Does Commercial Auto Insurance Have High Deductibles?
No. The amount of deductible you pay on your commercial vehicle is your choice. A commercial auto insurance policy comes with a deductible, which is the amount of covered loss that you pay out of pocket before the insurers will pay for a claim. For instance, if your deductible is $500 and your business-owned vehicle was involved in an accident, your insurer will send an adjuster to find out how much it would cost to fix the damage. If after talking with the repair facilities the adjuster says it will cost $4,000 to fix the damage, the insurer will deduct $500 from the total amount and pay out the remaining $3,500, while the insured business will have to cover the rest $500 out of pocket. Before considering a certain deductible amount, you must consider the cost versus the risk of choosing a high or low deductible. A high deductible translates to a lower premium. However, it also means you’ll have to cover some or all of the repairs or replacement costs if the business vehicle is damaged, which could be very expensive. In a way, when selecting deductibles you must always ask a question: Can I afford to pay this deductible right now, if the loss occurs? If you cannot, most likely you need to lower the deductible, which will raise the premium.
There are different types of deductibles under commercial auto insurance.
Comprehensive Deductible: Comprehensive insurance is the amount you pay to replace or fix your business-owned vehicle after an approved claim. In the event of a claim, you are to pay an amount out of pocket, before the insurance company covers the rest. The deductible amount is your choice, you could either choose a high or low deductible. A higher deductible translates to a lower insurance rate, and it also means you will pay more out of pocket on your commercial vehicle in the event of a claim. While a lower deductible means a higher insurance rate, as well as a lower out-of-pocket payment in the event of a claim. The average commercial auto comprehensive deductible in Texas is $100 to $500 per occurrence.
Collision Deductible: The most common commercial auto collision deductible in Texas is $500 per occurrence.
Liability Deductible: There is no commercial auto insurance deductible on a liability claim in Texas. This means your business pays nothing out of pocket for damages caused to another person or property.
Personal Injury Protection Deductible: This deductible kicks in when an accident occurs, involving the driver, and or passengers in the commercial vehicle. It is recommended to select a lower deductible if the individual driving the commercial vehicle is an experienced driver. The chances of being involved in an accident are slim with a qualified driver.
Uninsured/Underinsured Deductible: This deductible comes into play when an accident occurs with an uninsured/underinsured driver. It is advised to select a higher deductible because nearly 20% of drivers in Texas are uninsured. In the event of an accident with an uninsured driver, the business would pay less out of pocket. The minimum possible UM/UIM deductible (also known as the insured’s portion of the claim) in Texas is $250.
Does the Amount of Chosen Deductible Matter for the Cost of Commercial Auto Insurance?
Yes, the higher your deductible, the lesser your annual or monthly premium, while a higher premium translates to a lower deductible. However, you should always agree on a deductible that the business can afford to pay out of pocket.
Why is Commercial Auto Insurance so Expensive in Texas?
Commercial auto insurance may be considered expensive because claims involving commercial vehicles are usually more expensive than claims involving personal vehicles, especially when bodily injury coverage liability claims and semi trucks are involved. . Your insurance company determines the cost of your commercial auto insurance policy by building a risk profile based on the information your business provides. Various factors that contribute to the risk profile assessment include:
Number of vehicles in the commercial fleet
Types of vehicles
How are those vehicles used by the business
If transporting goods, what kind
Value of each vehicle
Condition of each vehicle
How are the vehicles being maintained by the business
Where are the vehicles parked
The insurance company you choose is one factor that determines your insurance policy cost. Rates vary from company to company. Therefore it is important to consult with a Texas–licensed commercial auto insurance agent to help you shop for different quotes that will suit your business insurance needs and your budget.
Why is my Commercial Auto Insurance so High?
Your commercial auto insurance policy is probably high due to the type of coverage option you purchased. If you purchase the actual cash value (ACV) policy for your commercial vehicle, you will typically have a lower policy cost because actual cash value factors in depreciation. This makes claim payments lower, which will, in turn, reduce your total premium cost. Replacement cost is more expensive because the insurers would have to replace your damaged vehicle with an exact or similar vehicle in the event of vehicle wreckage, usually making this option more expensive. It is best to speak to a licensed insurance agent in Texas to help you choose a plan that best suits your needs and budget.
Does Commercial Auto Insurance Go Up after a Claim?
Yes. Your premium is expected to go up a certain percentage after an accident claim, especially if the accident is primarily your fault. This is because your insurers will consider you a high risk. The more you file for claims, the more your premium rises.
How Much Will a Claim Increase Commercial Auto Insurance?
Filling a claim can increase your insurance premium by over 20% per claim. Your commercial auto insurance cost will increase with every claim you file because your insurers believe the probability of making future claims increases with every claim you file. Since commercial insurance is paid annually, the increase in the cost is also announced annually.
If too many claims were made by the insured business, the insurer may choose not to offer coverage for the next year. If this occurs, speak with a knowledgeable commercial insurance agent.
Which Commercial Auto Insurance Plan is the Cheapest in Texas?
Liability auto insurance coverage is the only compulsory coverage in Texas and also the cheapest commercial auto insurance plan in Texas. This coverage financially protects you by paying the medical bills and property damage repair bills of the other person involved in an accident you are responsible for. Selecting only this coverage will greatly reduce your commercial auto insurance cost. However, you will have to pay out of pocket for everything else, including the cost of repairing your damaged commercial vehicle.
Does the Cost of Commercial Auto Insurance Go Down with Time?
The cost of commercial auto insurance rarely goes down with time. However, your rates could stay the same if your employees practice safe driving habits and avoid traffic violations. Here are some ways to reduce auto accidents and violations to keep your insurance costs low:
Regularly provide training on safe driving to both old and new employees
Hire only professional and experienced drivers
Train your employees to report a loss immediately when it happens
Monitor your driver’s performance
Also, you can also enjoy discounts through the following ways:
Continuous auto insurance renewal: If you’ve been with a particular insurance company for three years or more, you may be given a discount for your loyalty. Loyalty discounts can save you up to 15%.
Commercial driver's license discounts: If your employees have commercial driver's licenses, you may qualify for a discount.
Business experience discounts: If your business has been running for over three years, you may qualify for a discount.
Paid upfront discount: If you can pay your commercial auto insurance upfront, you save on the cost of premium financing plus any associated fees, up to15%.
How Much Commercial Auto Insurance Coverage Do I Need?
Commercial auto insurance should be tailored according to your business's specific needs. The amount of commercial auto insurance coverage you need is determined by the monetary value of your commercial vehicle(s). You should get commercial auto insurance sufficient to cover the damages your drivers may cause to others and to repair or replace your own damaged vehicles. Under-insuring your business vehicles may cause the business to suffer, especially if the whole fleet of vehicles is involved in daily operations. If you lose one truck to repairs, you may be able to operate, but what happens if multiple vehicles are out of commission. Speak to a licensed commercial insurance agent in Texas to help you choose the insurance coverage that suits your business and budget.
How to Save on Commercial Auto Insurance in Texas?
There are several ways to save on your commercial auto insurance policy and they are listed below:
Maintain your coverage policy: Your insurance company may offer significant savings to customers who maintain their insurance policy during slow seasons. For instance, the slow season for trucks carrying farm products is usually from January to March because the farm products they transport are yet to ripen.
Getting only necessary coverage: Taking off unnecessary coverage options from your policy will reduce your premiums significantly. For example, suppose a company owns old commercial vehicles that aren’t worth much. In that case, collision insurance can be removed from their policy if you can afford to pay out of pocket if a collision occurs.
Ask your insurance company for discounts: You can save money by asking your insurers about available discounts. For instance, you can save up to 15% by making an upfront payment on your premium.
Shop for multiple insurance quotes: To save on your insurance, consult a licensed insurance agent in Texas to help you get multiple quotes. You can then select the best plan with the most affordable premium.
Increase your commercial auto insurance deductibles: Increasing your commercial auto insurance deductible will decrease your premiums. However, you should agree on a deductible that you can comfortably pay out of pocket.
The best way to save cost on your commercial auto insurance is to speak to an experienced Texas-licensed insurance agent who can assess your needs and put together a plan that will meet those needs at the most affordable price.
Can you Negotiate the Price of Commercial Auto Insurance in Texas?
No. Insurance rates cannot be negotiated in Texas because the insurance industry is heavily regulated by the state and the rates are set in place. An insurance company cannot change its rate without a state review. Instead, you can negotiate the price by:
bundling coverage from available cost-saving packages,
adjusting coverage limits closely based on the needs of the business, and
selecting the most practical and easy affordable deductible on each coverage.
What Can I Do if I Can’t Afford Commercial Auto Insurance?
According to the Texas Administrative Code Section 218.16 per transportation laws, commercial auto insurance is mandatory in Texas. Therefore you can’t be without at least minimum car insurance coverage limits. If you can’t afford commercial auto insurance but you must get coverage in order to operate the business, there are a few steps to help reduce costs:
Adjust your coverage: You can reduce your premium by removing or lowering some of your coverages. For instance, if you purchased Non owned auto coverage but the business never uses personal or rented vehicles for work, you may consider removing this coverage.
Ask about discounts: Insurance companies offer various discounts that they may not typically tell you about. For instance, driving accident-free for over a year may earn you a discount.
Pay by Mileage insurance: This option is only for commercial vehicles that are not used often. It has a cost that fluctuates monthly, depending on how much you drive. This option is best for food trucks parked at a spot for a long time.
Consider getting short term commercial auto insurance: If the business does not use all its fleet vehicles daily, if they are paid off and can be stored with minimal coverage - the business can get insurance to cover such vehicles during the move between storage locations or to take the truck in for repairs.
Shop Around: A licensed commercial property insurance agent in Texas can provide you with quotes from different insurance companies. This will help you compare prices and pick the policy with the most favorable plan and the best price.
Raise your deductibles: A deductible is the amount of money that I subtracted from your claims payout. If you raise your deductibles, your premium will be reduced. According to data, raising your deductible can save you between 15% and 30%. However, note that, in the event of a covered peril, you may have to pay for all or most of the cost of repair.
How Can I Get Commercial Auto Insurance if I Have no Money?
If you cannot afford commercial auto insurance, you may consider premium financing. Premium financing companies offer loans to businesses to cover the cost of their insurance premiums. Instead of paying the full annual cost upfront, the business takes out a loan which pays the policy in full and allows the business to use the coverage immediately. The financiers add their interest rate and fees (of around $7.5%-12%) to the equation and break down the remaining sum into smaller and much more manageable (usually monthly) payments for the business to pay. Ask a licensed insurance agent in Texas to connect you with the premium financing companies they recommend.
How Do you Save Money by Paying Commercial Auto Insurance Upfront?
Paying commercial auto insurance in Texas upfront saves the insurance company the administrative fees of processing monthly payments. Making an upfront payment for your commercial auto insurance premium is one of the best ways to save money on your insurance policy, since all commercial insurance companies offer the lowest price possible upfront.
What Discounts are Available for Commercial Auto Insurance?
One of the ways to reduce the cost of your commercial auto insurance policy is by asking about discounts. Your commercial vehicle may be granted discounts if the following are done:
Insuring several vehicles at once may grant you a multi-car discount
Bundling your insurance policies with one insurance company may get you a multi-policy discount
Paying your premium upfront can get you up to a 15% discount
Equipping your vehicles with safety devices and gadgets may qualify your business for vehicle safety discounts
Equipping your fleet vehicles with anti-theft devices like GPS, stolen vehicle system, VIN etching makes you eligible for an anti-theft discount
Getting a quote online and signing up for a policy may get you an online quote discount
Speaking to a licensed insurance agent in Texas with access to multiple insurers, and market trends will help you search for various discounts and make the best decision for your commercial auto insurance.
