Melanie is a blogger, author, and speaker specializing in personal finance and debt management. She’s also the author of the blog and book “Dear Debt.”
Sara Getman is an Associate Editor at Insurify and has been with the company since 2022. Prior to joining Insurify, Sara completed her undergraduate degree in English Literature at Simmons University in Boston. At Simmons, she was the Editor-in-Chief for Sidelines Magazine (a literary and art publication), and wrote creative non-fiction.
Outside of work, Sara is an avid reader, and loves rock climbing, yoga, and crocheting.
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Whether you have a company-owned vehicle or regularly use your personal vehicle for business use, you likely need commercial car insurance to stay fully protected and in compliance with the law. For California business owners, many options are available on the market to get coverage. Whether you own a construction company or a food truck, it’s important to get the right coverage at the right price.
Here’s what you need to know about average rates, coverage options, and commercial insurance companies in California.
Quick Facts
Commercial auto insurance in California has an average cost of $260 to $1,400 per month.
California drivers must meet at least the minimum liability insurance requirements when getting a business auto policy.
Progressive Commercial, Nationwide, and GEICO offer some of the best commercial car insurance in California.
Commercial car insurance requirements in California
If you’re using a vehicle for business purposes in California, you likely need commercial car insurance. Whether you’re a small-business owner with a taco truck in Los Angeles, a florist with a delivery vehicle in San Francisco, a real estate agent in San Diego, a rideshare driver in Sacramento, or a fleet manager, you’ll need commercial auto insurance.
Even if you’re driving your own car, if you’re doing business-related activities at the time of an accident, your personal auto insurance may not cover you.
Drivers must get liability coverage with specific liability limits set by the state. These include:[1]
$30,000 in bodily injury liability per person
$60,000 in bodily injury liability per accident
$15,000 in property damage liability
You may have additional insurance needs for commercial or fleet vehicles, based on local, state, or federal agency requirements. For example, commercial passenger carriers, such as for-hire limousines, have much higher liability limits, depending on the number of passengers. The minimum coverage required for seven or fewer passengers is $750,000.[2]
Drivers operating vehicles with a commercial driver’s license or transporting items may have minimum limits between $300,000 and $5 million.[3]
Find a Commercial Auto Insurance Policy
Check rates from a top business insurance company
Optional commercial auto insurance coverages
While your business auto insurance policy must have specific liability coverage limits, you can consider other coverage options as well. Getting only liability insurance offers limited protection and puts you in a vulnerable spot.
Here are common optional commercial auto insurance coverages to review when shopping around:[4]
Collision coverage
If your business vehicle hits another car or even an object, collision insurance will cover the damages. This is especially important if your vehicle is a major part of your business and branding.
Comprehensive coverage
For nearly everything else that’s not collision-related, comprehensive insurance covers damage from rocks, theft, floods, fires, and vandalism.
Medical payments (MedPay)
If you face injuries from an accident, medical payments covers your medical expenses.
Uninsured/underinsured motorist coverage
If you want to offset the risk of getting into an accident with an uninsured or underinsured driver, this type of coverage can help so you’re not responsible for all the costs on your own.
Hired and non-owned auto
If your business rents or leases vehicles, HNOA can cover gaps in protection. For example, it can apply if one of your employees has an accident while doing business errands in their personal or rented vehicle.
Roadside assistance
Roadside assistance coverage can come in handy if you’re left in a bind because of a flat tire or need a jump-start or tow.
Rental reimbursement
If you rely on your car for your business, continuous service is key to keeping revenue coming in. If you get into an accident and the vehicle is out of commission, this coverage can help pay for a rental.
Do you need commercial car insurance in California?
If you engage in business activities while using your vehicle in California, you’ll need commercial car insurance. Some examples of when you probably need it include:
Running an organic green juice business in LA, which delivers products to other stores
Transporting goods via a freight truck on the 5 freeway from a major city to somewhere more inland
Operating a catering business in Fresno and having employees drive company vans to gigs
Working as a rideshare driver in Paso Robles or a shuttle driver for wine tours
Doing work as a plumber or electrician in Chatsworth and using a company van exclusively for work
So, if you use your personal vehicle or company vehicle primarily for business operations, you’ll need a commercial car insurance policy.
Here are times you likely won’t need commercial car insurance in California:
Commuting from Oakland to a workplace in San Francisco, simply going from point A to B
Driving from your home in Monterey to attend a work event in Big Sur
On a rare occasion, you take business mail to drop off while doing personal errands or bring a handful of flyers to a conference
If you’re only commuting to and from the business or a work event, or once in a blue moon doing a minor work task, you probably don’t need commercial car insurance.
Best commercial car insurance companies in California
If you need commercial car insurance in California, the best company for you may be different from someone else’s. But to help you get started, we looked at discounts, policies, premiums, customer service, and overall claims satisfaction to determine the best commercial auto insurance companies in California.
Progressive: Best for heavy trucks
heavy trucksProgressive
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Progressive commercial auto insurance provides policies for a range of business types. So whether you need standard business auto insurance or have a food truck or tow truck, Progressive can cover you. But where the company really shines is with heavy trucks. Progressive Commercial is the top heavy truck insurer in the U.S., according to the company website. So if you have a tractor trailer, dump truck, or food truck, this could be a good option.
Pros
Specializes in commercial truck vehicle insurance
Multiple insurance discounts available
24/7 policy service options by phone and online
Cons
Low Trustpilot rating
Complaints about communication handling and rate hikes
Higher-than-average number of complaints with the National Association of Insurance Commissioners (NAIC)
Nationwide: Best for add-on coverages
add-on coveragesNationwide
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Nationwide offers standard commercial auto insurance and an impressive array of optional coverages. These include roadside assistance, new vehicle replacement coverage, gap coverage, rental reimbursement, expanded towing, and more.
Additionally, Nationwide provides different insurance solutions to a mix of industry types. So whether you’re in construction, food service, retail, or real estate, Nationwide can work with you on your coverage needs.
Pros
Solid J.D. Power customer satisfaction rating
A+ Better Business Bureau rating
AM Best financial strength rating of A (Excellent)
Cons
Doesn’t insure semitrucks or tractor trailers
Mixed ratings for fleet mobile app
Higher-than-average number of complaints with the NAIC
GEICO: Best for safe driving habits
safe driving habitsGEICO
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GEICO offers commercial car insurance in California and says it can customize a policy for you regardless of your business size. As a commercial car insurer, it can insure business-use cars, food trucks, semitrucks, vans, pickup trucks, and service utility trucks.
GEICO is ideal for businesses that want to secure lower insurance rates through safe driving because of its DriveEasy Pro program, which tracks driving behaviors and can lead to savings. It also helps manage fleets and get insights and alerts.
Pros
AM Best financial strength rating of A+
Highly rated mobile app
Offers other types of business insurance
Cons
Not listed on J.D. Power’s commercial study
Very low Trustpilot rating
Higher-than-average number of complaints with the NAIC
Our editorial team analyzed regional and national auto insurance companies that sell commercial policies in California to assess which offer the best rates, coverage options, customer service, and savings to drivers. We prioritized competitive rates, 24/7 customer service, and specialty or supplemental coverages.
Average cost of commercial car insurance in California
The average cost of commercial car insurance in California ranges from $260 to $1,400 per month, according to Insurify data. The type of vehicles you have, the amount, and the size all affect how much you’ll pay for commercial insurance. And, like with personal auto insurance, commercial car insurance companies review various other factors and risk characteristics to set rates, including:
Vehicle safety features
State insurance requirements
Driving records of drivers on the policy
Claims history
Deductibles
Coverage options
Vehicle weight
What business owners should know about commercial auto insurance in California
Getting commercial car insurance in California may be a requirement, but you should know a few things. First, commercial insurance costs tend to be higher than personal auto insurance. That’s because business owners need to have greater liability limits and coverage.
Your risk factors will also vary depending on your fleet size, number of drivers, vehicle use, mileage, and more. Some exclusions may have to do with the type of vehicle or the industry. For example, Progressive Commercial won’t insure emergency vehicles or monster trucks, and it won’t insure companies that offer for-hire transportation.
If you need to file a claim on your commercial car insurance policy, reach out to your company as soon as possible. Provide as much information as you can, and a claims adjuster will review the damage. From there, you can get an estimate and start the repair process. Your insurance company may pay you or the repair shop.
Lastly, be aware that your auto insurance premiums may be tax-deductible as part of your business expenses. But it’s always a good idea to discuss your particular situation with a tax professional.
Review your coverage needs. Consider the California minimum insurance requirements and your vehicle operations when determining your coverage needs. Getting more than the liability limits and adding optional coverage can boost your protection.
Collect vehicle and driver information. Have the make, model, and year of your vehicle and information about the drivers on the policy, including age, driving history, and licenses.
Compare quotes and coverage options. Not all commercial car insurance companies offer the same policies or prices. Compare online quotes and what coverage you can get. Look at customer reviews and mobile apps for policy management.
Purchase commercial car insurance. Once you decide on a company, buy a policy. Read the fine print, specifically the exclusions and coverage limits.
Commercial auto insurance in California FAQs
If you want additional information on commercial car insurance in California, here are some answers to common questions. You can get additional insurance advice by talking to an agent.
How much does commercial car insurance cost in California?
Commercial car insurance costs in California vary based on many factors, including the type of business, vehicle, driving records, and more. But on average, the low estimate is $260 per month and the high estimate is $1,400 per month, according to Insurify data. Each company will do its own risk assessment when setting your rates.
What are the requirements for commercial auto insurance in California?
Drivers with commercial auto insurance in California must meet certain liability limits, including $30,000 in bodily injury liability per person, $60,000 in bodily injury liability per accident, and $15,000 in property damage liability.
What is considered a commercial vehicle in California?
A commercial vehicle in California is a car used primarily or solely for business purposes. Even if you have a personal vehicle that you use for business, you may need commercial car insurance.
What is the best insurance for commercial vehicles in California?
One of the best auto insurance companies for commercial vehicles in California is Progressive Commercial. The company insures many types of vehicles, including large and heavy trucks.
III. "Auto insurance basics—understanding your coverage."
Melanie Lockert
Melanie Lockert is the founder of the blog and author of the book, "Dear Debt." Through her blog, she chronicled her journey out of $81,000 in student loan debt. Her work has appeared on Allure, Business Insider, Credit Karma, Fortune, and more. She is also the co-founder of the Lola Retreat and host of the Mental Health and Wealth show podcast. She lives in Los Angeles and enjoys jazz music, traveling, coffee, and spending time with her two cats and partner.
Melanie has been a contributor at Insurify since November 2022.
Sara Getman is an Associate Editor at Insurify and has been with the company since 2022. Prior to joining Insurify, Sara completed her undergraduate degree in English Literature at Simmons University in Boston. At Simmons, she was the Editor-in-Chief for Sidelines Magazine (a literary and art publication), and wrote creative non-fiction.
Outside of work, Sara is an avid reader, and loves rock climbing, yoga, and crocheting.
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