Commercial Auto Insurance: Things to Know Before You Buy

When you shop for a vehicle for your company, you probably weigh the pros and cons of features and price. These and other factors can also affect the cost of your commercial automobile insurance long after you’ve bought or leased the auto. A vehicle’s class, intended use and age help determine what premiums you pay for commercial auto insurance.

Insurance impact of your commercial auto decisions

Things to understand before you buy your next company car or truck:

• A basic rule of thumb is the more expensive the vehicle, the pricier the premiums. Buying used vehicles is one way to potentially lower the cost of commercial car insurance.
• There are three basic classes of vehicle: passenger cars, trucks, and trailers. And within these classes there are variables. A mini-van or SUV would fall into the passenger vehicle class, while full size vans and pick-ups are classified as trucks.
• Passenger vehicles typically cost less to insure than trucks. Keep in mind that an accessory-loaded SUV will cost more to insure than a basic four-door sedan.
• In the truck category, vehicles vary primarily by weight, and generally speaking, the lighter-weight trucks cost comparatively less to insure on a commercial car insurance policy. Here’s how the truck class breaks down:

Light Trucks – weighing up to 10,000 pounds
These include panel vans, pick-ups, parcel vans, refrigerated trucks and flatbed trucks.

Medium Trucks – 10,001 to 20,000 pounds
Mid-sized refrigerated, stake bed and box trucks are included.

Heavy Duty and Extra Heavy Duty Trucks – ranging from 20,001 to 45,000 + pounds
Includes beverage trucks as well as farm and grain trucks.

• The trailer class includes small service or utility trailers, flatbed trailers, refrigerated trailers and specialty trailers. As you might expect, the insurance premiums for commercial automobiles increase proportionately with the size and weight of the trailer.
• The intended use of the vehicle also impacts the cost of business vehicle insurance. Service-oriented vehicles, such as a plumbing truck or a van used by an HVAC contractor, are the least expensive to insure. Next are retail-use vehicles, such as a van used for florist or dry cleaning deliveries to homes. The most expensive to insure are commercial autos that deliver goods to other businesses.

Contact a Nationwide commercial insurance agent to help you understand these and other considerations about commercial car insurance before you buy.