What Determines Your Commercial Auto Insurance Rates?

If your business involves driving, commercial auto insurance is a necessity. Exactly what type of coverage you need and how much you'll have to pay depends on what type of business you're in and how you operate. Here are a few determining factors that will affect your commercial auto insurance rates.

Your Personal Driving Record

When you apply for commercial auto insurance, the insurance company will consider your personal driving record. That's because people who get into accidents or get tickets in their personal cars are more likely to do the same when driving for business. A worse driving record could mean higher insurance rates.

For smaller companies, the insurance company will often check each employee individually. If you have many employees, you might get a fixed insurance rate based on the number of employees you have. However, the insurance company will often require you to check employee driving records on your own and set rules on who you can hire and when you need to remove an employee from driving.

Your Business Driving Record

Your claims history as a business is often important. While individual drivers may vary, a company's culture and training can also create a higher risk of accidents. For example, one company might give drivers tight deadlines that force speeding and reckless driving to complete the job on time. Other companies might promote safety and provide additional training on how to safely drive company vehicles. If you keep your accidents down, you can keep your insurance rates down.

Your Type of Business

Your type of business can also affect your insurance rates. This is both because of how much driving you might be doing and because different types of businesses have different rates of accidents. A restaurant might get a high insurance rate on its delivery vehicles because delivery drivers are on the road a lot and often trade safety for faster delivery times. A nursing home might get a low insurance rate on the courtesy van it uses to bring residents to the store because the mileage might be low, and the residents will want the staff to drive slowly.

Similarly, transporting people can also increase your insurance rates in general. Any time you're transporting a customer or guest, there's a chance they could sue you if you get into an accident. That increases your liability, so it costs more to insure your vehicles.

To get a quote on a commercial auto insurance policy, contact a local insurance company today.