10 Tips to Lower Your Commercial Auto Insurance Rates

Commercial auto insurance is a significant expense for any business that operates vehicles. Premiums are based on factors like your driving records, vehicle types, mileage, location and more. While some components are out of your control, there are many tactics you can use to lower your rates.

This article will explain 10 smart ways businesses can reduce their commercial auto insurance costs and still get the coverage they need.

1. Maintain Good Driving Records

One of the biggest factors affecting your commercial auto rates is the driving history of anyone operating your business vehicles. Employees with clean records (no accidents, tickets, DUIs) will earn you the lowest rates.

• Conduct motor vehicle record checks before hiring drivers. Avoid anyone with major violations.

• Enroll employees in defensive driving courses. This can also earn you a discount with some insurers.

• Install telematics devices to monitor driving habits like speeding, hard braking, rapid acceleration. This allows you to coach bad behaviors.

• Reward accident-free miles with bonuses. It motivates safe driving.

2. Increase Your Deductible

Opting for a higher deductible (the amount you pay out of pocket for a claim) reduces your premiums. Just make sure you have savings to cover the deductible when needed.

• For small repairs under $2,500, consider dropping collision coverage and paying out of pocket.

• If you run an aging fleet, assess whether collision coverage is worthwhile.

• Weigh the cost savings vs. risk of higher deductibles. Find the right balance.

3. Bundle Insurance Policies

Purchasing multiple policies from the same insurer earns you discounted premiums. Business owners can bundle:

• Commercial auto with general liability and/or property insurance.

• Commercial and personal auto if vehicles are insured for both purposes.

• Homeowners or renters policies if you work from home.

Bundling simplifies payments and dealings with your insurer. Shop rates from various carriers.

4. Select Vehicles Carefully

Insurers classify vehicles by use: service, retail and commercial. Trucks, vans and other vehicles used to transport equipment or products are more costly to insure than a basic sedan.

• Choose affordable, safe and fuel-efficient vehicles suited to your business needs. Avoid anything flashy or expensive to insure.

• Compare rates for used vs new models. Newer vehicles often have better safety features and lower repair costs.

• Perform regular maintenance to prevent breakdowns and keep depreciation lower.

5. Limit High-Risk Drivers

Employees under 25 or over 70, and those with poor driving records, will raise your rates if named as drivers. Limit their exposure.

• Don’t add high-risk drivers unless necessary. Some roles rarely or never drive.

• Restrict high-risk drivers to your safest vehicles under optimal conditions. Prohibit stressful rush-hour routes, for example.

• Encourage using a personal vehicle if possible and obtain non-owned auto coverage.

6. Explore Telematics Programs

Insurers offer policies with telematics to track driving metrics electronically. Safe practices earn you discounts.

• Braking, acceleration, speeding, mileage and route efficiency are monitored.

• Drivers can access apps that show their progress and score.

• Discounts apply for reaching safety goals. Rates then adjust monthly based on continued performance.

7. Institute Driver Safety Programs

Formal training and policies promote safer driving habits and prevent accidents.

• Verify all drivers are properly licensed for vehicles they operate.

• Provide defensive driving courses and refresh periodically.

• Enforce seat belt usage and other safety protocols.

• Reward clean records with incentives to motivate excellent driving.

8. Examine Your Routes and Territories

Your rates are partially based on the level of risk where you operate vehicles. Assess your routes to reduce risk factors.

• Limit operations in dense urban zones which have more accidents.

• Avoid dangerous roads, intersections, or times of day if possible.

• Adjust routes to lower mileage in risky areas and keep drivers closer to home base.

9. Raise Your Credit Score

Insurers often check your business credit score when underwriting policies. Good credit equals lower rates.

• Pay all bills on time. Being late on payments hurts your score. Set reminders if needed.

• Keep credit balances low. High balances also lower your rating.

• Correct any errors on your business credit report. Mistakes drag down your score.

10. Work With an Independent Agent

Local agents shop multiple insurers for you. They can compare rates and optimize your coverage.

• Independent agents have flexibility to build the best policy for your needs and budget.

• They will re-shop your rates yearly to ensure you always get the lowest price.

• Ask about any discounts through professional associations or groups you belong to.

Carefully managing risk factors under your control reduces commercial auto premiums while keeping your business covered. Work closely with your insurance agent or broker to maximize savings. Consistent attention to these areas will reward you with long-term cost control.