Commercial auto insurance covers drivers and business vehicles when personal auto insurance doesn't. If you use your vehicle for work like visiting clients, making deliveries or hauling equipment, personal policies leave you exposed since they specifically exclude business activities. Commercial coverage fills this gap with higher liability limits and financial protection for multiple drivers on your policy, though coverage requirements and availability vary by state and insurer.
What Is Commercial Auto Insurance?
Commercial auto insurance covers business vehicles and protects against accidents, theft and damage.
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Updated: October 27, 2025
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Key Takeaways
Commercial auto insurance protects business vehicles financially since personal policies exclude work activities.
Your policy typically includes liability, comprehensive, collision and medical coverage, plus additional state-required protections.
Small business owners must carry commercial auto insurance if they use vehicles for business, except in New Hampshire, where they only need to meet financial responsibility requirements.
What Is Commercial Auto Insurance?
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Types of Commercial Auto Insurance Coverage
Your commercial auto insurance policy can include different coverage options, and what's required depends on your state:
Liability coverage
Provides financial protection when you're at fault in an accident and damage someone's property or hurt them. Most states require this coverage, and it pays medical bills, vehicle repairs and legal fees if someone sues you without requiring a deductible.
Comprehensive coverage
Covers damage from theft, vandalism, weather, fire and other non-collision events, though you'll pay your deductible before coverage kicks in. You'll want this if you park work trucks overnight in unsecured areas or operate in storm-prone regions where these risks are higher.
Collision coverage
Pays for damage to your vehicle from crashes, no matter who's at fault. You need this if you're financing or leasing your business vehicles.
Medical payments coverage
Covers medical costs for you and your passengers after an accident, even if you caused it. This coverage helps when employees regularly ride in company vehicles or when you're driving clients around.
Uninsured/Underinsured motorist coverage
Protects you when drivers who don't have enough insurance hit you. Uninsured drivers are more common than you'd expect, and you don't want to pay out of pocket for someone else's accident.
Personal injury protection (PIP)
Covers medical bills, lost wages and rehabilitation costs regardless of fault. Some states require this, and it covers more than medical payments coverage provides.
COMPLETE YOUR BUSINESS PROTECTION
Commercial auto insurance handles vehicle accidents, but you'll need these coverage types to protect against other business risks your auto policy won't touch.
- General Liability Insurance: Covers customer injuries and property damage at your business location, which your auto policy ignores even if you run a delivery service.
- Hired and Non-Owned Auto Insurance: Protects you when employees drive their own cars or rentals for work errands, a gap most business owners don't realize exists.
- Commercial Umbrella Insurance: Kicks in with extra liability protection when a serious accident exceeds your auto policy limits, which happens more often than you'd think.
- Cargo Insurance: Covers the goods you're hauling for customers since your commercial auto policy only protects the vehicle itself, not what's inside.
- Workers' Compensation Insurance: Required in most states to cover medical bills and lost wages if employees get hurt in work-related vehicle accidents.
- Garage Liability Insurance: Essential if you run an auto dealership, repair shop or parking facility since it covers customer vehicles in your care plus premises liability.
What Does Commercial Auto Insurance Cover?
Commercial auto insurance covers specific risks related to using vehicles for business purposes. The scenarios below show what you can expect your policy to cover and what it won't.
Your delivery driver hits another car while making a customer delivery | ✅ | Your liability coverage handles the other driver's medical costs and car repair expenses because this happened during normal business activities. |
Someone steals your work van from a job site overnight | ✅ | Comprehensive coverage pays to replace your van and any permanently attached equipment, minus your deductible. |
Your employee gets hurt while loading equipment into your truck | ❌ | Workers' compensation insurance covers this, not commercial auto. The injury happened outside the vehicle during work activities. |
A tree falls on your parked company vehicle during a storm | ✅ | Comprehensive coverage handles weather-related damage to your vehicle, whether you're driving or parked. |
You're driving to a client meeting and cause an accident | ✅ | Your liability coverage applies because you were using the vehicle for business purposes, even though you weren't actively working. |
Thieves break into your vehicle and steal your laptop and tools | ❌ | Commercial auto doesn't cover personal property inside vehicles. You'd need tools and equipment insurance or commercial property coverage for stolen business equipment. |
Your company truck breaks down due to mechanical failure | ❌ | Routine maintenance and mechanical breakdowns aren't covered. If this is a concern, consider a separate vehicle service contract. |
You accidentally backed into a customer's fence while making a delivery | ✅ | Liability coverage handles damage costs when you harm someone else's property, like hitting a customer's fence during work calls. |
How Much Commercial Auto Insurance Do I Need?
You need commercial auto insurance if you haul materials to construction sites, transport catering supplies to events, drive company vehicles between office locations, provide mobile services like pet grooming or appliance repair or use rideshare and delivery apps to earn income. These activities put you at a higher risk than typical personal driving, requiring specialized business coverage.
While minimum coverage requirements vary by state, you must determine how much financial protection makes sense for your business. Key factors to consider when choosing your coverage levels include:
Your industry's risk exposure
Contractors carrying expensive tools face higher theft risks than consultants with laptops. Food delivery drivers have more frequent accident exposure than photographers who drive to weekend events.
Vehicle type and usage intensity
Pickup trucks hauling heavy equipment need higher liability limits than sedans used for client meetings. Daily delivery routes require more comprehensive protection than occasional business trips.
Employee driving patterns
If employees drive your business vehicles, you're liable for accidents they cause while working. Consider how often they drive company vehicles and their driving records when setting coverage limits, since poor driving histories increase your insurance costs.
Driving environment and damage potential
If you drive in high-end areas with expensive vehicles and property, or dense urban areas with multiple cars, accident damages can easily exceed minimum liability limits. Higher coverage protects your business assets from lawsuits when repair costs are steep.
The right coverage amount balances protecting your business with managing premium costs. Most businesses find that stepping up from minimum coverage costs less than expected and provides better financial protection.
Commercial Auto Insurance Requirements by State
Every state handles commercial auto insurance differently. You might need just $15,000 per person in one state, but $50,000 or more in another.
The type of work you do can change your coverage requirements. Businesses using large trucks, hauling hazardous cargo or crossing interstate lines often must carry combined single limit (CSL) coverage. This means you have one dollar amount covering injury claims and property damage, rather than splitting coverage into separate categories.
Check what your state requires:
State | Required Coverage and Minimum Limits | Special Requirements |
|---|---|---|
Alabama | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident | Property carriers >10,000 lbs: $300,000–750,000 depending on cargo type |
Alaska | • Bodily injury liability: $50,000 per person/$100,000 per accident • Property damage liability: $25,000 per accident | Passenger carriers: $500,000 BI/$200,000 PD |
Arizona | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $15,000 per accident | Hazmat carriers: $1M–$5M CSL depending on substance |
Arkansas | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident | Property carriers: 50/100/30 |
California | • Bodily injury liability: $30,000 per person/$60,000 per accident • Property damage liability: $15,000 per accident | Interstate vehicles with USDOT/MC: $750,000 CSL minimum |
Colorado | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $15,000 per accident | Interstate vehicles: $750,000 CSL minimum |
Connecticut | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident • Uninsured/underinsured motorist (UM/UIM): $25,000 per person/$50,000 per accident • Personal injury protection (PIP): $20,000 per person/$40,000 per accident | Passenger vehicles >8 passengers: $1.5M; >16 passengers: $5M |
Delaware | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $10,000 per accident • Personal injury protection (PIP): $15,000 per person/$30,000 per accident | Taxicabs: $26,000 BI/$11,000 PD minimum |
Florida | • Property damage liability: $10,000 per accident • Personal injury protection (PIP): $10,000 | No-fault state Bodily injury liability not required except for DUI convictions and taxis ($125,000/$250,000) |
Georgia | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident | Higher limits required for larger vehicles and interstate operations |
Hawaii | • Bodily injury liability: $20,000 per person/$40,000 per accident • Property damage liability: $10,000 per accident • Personal injury protection (PIP): $10,000 per person | Property carriers: 250/750/250 |
Idaho | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $15,000 per accident • Uninsured/underinsured motorist (UM/UIM): $25,000 per person/$50,000 per accident (opt-out available in writing) | Property carriers: $750,000 CSL for non-hazardous materials |
Illinois | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $20,000 per accident • Uninsured/underinsured motorist (UM/UIM): $25,000 per person/$50,000 per accident | Standard commercial requirements apply |
Indiana | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident | Higher limits for commercial carriers |
Iowa | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $15,000 per accident | Vehicles >10,000 lbs: $750,000 liability for non-hazardous; $5M for hazardous |
Kansas | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident • Personal injury protection (PIP): - $4,500 medical expenses - $900/month lost wages (12 months) - $4,500 rehabilitation - $25/day essential services - $2,000 funeral expenses | No-fault state requirements apply |
Kentucky | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident • Personal injury protection (PIP): $10,000 per person per accident | No-fault state requirements apply |
Louisiana | • Bodily injury liability: $15,000 per person/$30,000 per accident • Property damage liability: $25,000 per accident | Standard commercial requirements apply |
Maine | • Bodily injury liability: $50,000 per person/$100,000 per accident • Property damage liability: $25,000 per accident • Uninsured/underinsured motorist (UM/UIM): $50,000 per person/$100,000 per accident • Medical payments coverage (MedPay): $2,000 per person | Higher baseline requirements |
Maryland | • Bodily injury liability: $30,000 per person/$60,000 per accident • Property damage liability: $15,000 per accident • Uninsured/underinsured motorist (UM/UIM): $30,000 per person/$60,000 per accident (includes property damage) | Baltimore area taxis: 30/60/15 or $75,000 CSL |
Massachusetts | • Bodily injury liability: $20,000 per person/$40,000 per accident • Property damage liability: $5,000 per accident • Personal injury protection (PIP): $8,000 per person • Uninsured/underinsured motorist (UM/UIM): $20,000 per person/$40,000 per accident | No-fault state; UM/UIM required |
Michigan | • Bodily injury liability: $50,000 per person/$100,000 per accident • Property damage liability: $10,000 per accident • Personal injury protection (PIP): Options include unlimited, $500,000, $250,000, $50,000 (Medicaid enrollees), or opt-out (Medicare enrollees) | Freight vehicles >10,000 lbs have higher requirements |
Minnesota | • Bodily injury liability: $30,000 per person/$60,000 per accident • Property damage liability: $10,000 per accident • Personal injury protection (PIP): $40,000 per person ($20,000 medical, $20,000 wage loss/replacement services) | No-fault state requirements apply |
Mississippi | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident | Standard commercial requirements apply |
Missouri | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident • Uninsured motorist (UM): $25,000 per person/$50,000 per accident | Standard commercial requirements apply |
Montana | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $20,000 per accident | Standard commercial requirements apply |
Nebraska | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident • Uninsured/underinsured motorist (UM/UIM): $25,000 per person/$50,000 per accident | Standard commercial requirements apply |
Nevada | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $20,000 per accident | Standard commercial requirements apply |
New Hampshire | • Financial responsibility required, but insurance not mandatory • If insurance purchased: • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident • Medical payments: $1,000 • Uninsured motorist: $25,000 per person/$50,000 per accident | Alternative to insurance: Financial responsibility may be demonstrated through other means. Commercial vehicles with USDOT numbers may need additional federal coverage requirements. |
New Jersey | • Bodily injury liability: $15,000 per person/$30,000 per accident • Property damage liability: $5,000 per accident • Personal injury protection (PIP): $15,000 minimum (up to $250,000 available; automatic expansion to $250,000 for catastrophic injuries) | No-fault state; minimum limits increasing in 2026 |
New Mexico | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $10,000 per accident | Standard commercial requirements apply |
New York | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $10,000 per accident • Personal injury protection (PIP): $50,000 • Uninsured motorist (UM): $25,000 per person/$50,000 per accident | No-fault state with additional requirements |
North Carolina | • Bodily injury liability: $30,000 per person/$60,000 per accident • Property damage liability: $25,000 per accident • Uninsured/underinsured motorist (UM/UIM): $30,000 per person/$60,000 per accident | Vehicles >26,000 lbs: 100/300/50 |
North Dakota | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident • Personal injury protection (PIP): $30,000 per person • Uninsured/underinsured motorist (UM/UIM): $25,000 per person/$50,000 per accident | No-fault state |
Ohio | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident | Standard commercial requirements apply |
Oklahoma | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident | Standard commercial requirements apply |
Oregon | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $20,000 per accident • Uninsured/underinsured motorist (UM/UIM): $25,000 per person/$50,000 per accident | Standard commercial requirements apply |
Pennsylvania | • Bodily injury liability: $15,000 per person/$30,000 per accident • Property damage liability: $5,000 per accident • Personal injury protection (PIP): $5,000 minimum medical benefits (up to $100,000+ available; optional add-ons for lost wages, funeral expenses) | No-fault state; lower baseline requirements |
Rhode Island | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident | Standard commercial requirements apply |
South Carolina | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident • Uninsured/underinsured motorist (UM/UIM): $25,000 per person/$50,000 per accident | Standard commercial requirements apply |
South Dakota | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident • Uninsured/underinsured motorist (UM/UIM): $25,000 per person/$50,000 per accident | Standard commercial requirements apply |
Tennessee | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $15,000 per accident | Standard commercial requirements apply |
Texas | • Bodily injury liability: $30,000 per person/$60,000 per accident • Property damage liability: $25,000 per accident • Personal injury protection (PIP): $2,500 minimum (automatically included unless waived in writing; higher limits available) | Additional requirements for vehicles with DOT numbers |
Utah | • Bodily injury liability: $25,000 per person/$65,000 per accident • Property damage liability: $15,000 per accident • Personal injury protection (PIP): $3,000 minimum - Medical expenses - Lost wages up to $250/week or 85% of income for 52 weeks - Burial costs up to $1,500 | No-fault state requirements apply |
Vermont | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $10,000 per accident • Uninsured/underinsured motorist (UM/UIM): $50,000 per person/$100,000 per accident | Standard commercial requirements apply |
Virginia | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $20,000 per accident • Uninsured/underinsured motorist (UM/UIM): $50,000 per person/$100,000 per accident (effective Jan 1, 2025; includes property damage $25,000) | Standard commercial requirements apply |
Washington | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $10,000 per accident | Freight vehicles have weight-based requirements |
West Virginia | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $25,000 per accident • Uninsured/underinsured motorist (UM/UIM): $25,000 per person/$50,000 per accident | Passenger vehicles have capacity-based requirements |
Wisconsin | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $10,000 per accident • Uninsured/underinsured motorist (UM/UIM): $25,000 per person/$50,000 per accident | Standard commercial requirements apply |
Wyoming | • Bodily injury liability: $25,000 per person/$50,000 per accident • Property damage liability: $20,000 per accident | Standard commercial requirements apply |
If you're financing or leasing commercial vehicles, your lender will likely require higher coverage limits and additional financial protections beyond state minimums. Factor these requirements into your coverage decisions when purchasing vehicles.
Commercial Auto Liability Insurance: Bottom Line
Commercial auto insurance fills the gap that personal policies leave when you use vehicles for business. Coverage options include liability, comprehensive, collision and medical protections, with state requirements varying for additional coverages. Nearly all states mandate this insurance for business vehicle use, making it essential for your company's financial security.
Commercial Auto Insurance: FAQ
Small business owners using vehicles for their operations often have questions about commercial auto insurance. We answered the most frequently asked questions:
What vehicles need commercial auto insurance?
Any vehicle used for business needs commercial coverage, whether hauling materials, transporting supplies, driving between offices, providing mobile services or using rideshare and delivery apps. This applies to pickup trucks, delivery vans, company cars and specialized service vehicles.
Can I use personal auto insurance for business?
No. Personal policies exclude work activities, putting your business at financial risk during work-related driving. Commercial coverage protects against liability claims, vehicle damage and medical expenses when accidents happen during activities like client visits or deliveries.
Do all states require commercial auto insurance?
Nearly all states require commercial auto insurance, with minimum liability limits varying by state. New Hampshire only requires financial responsibility. Many states have special requirements for larger vehicles or interstate operations.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
He writes about economics and insurance, breaking down complex topics so people know what they're buying.