Cheap Commercial Auto Insurance for Contractors Tips to Save What to Know

How's it going, everybody? If you run a contracting or construction business, whether you're a general contractor or maybe a plumber or electrician or run a roofing business, then this video is for you. There's a good chance that your business relies on trucks, vans, and other types of vehicles to run your operation every day. And one of the most important insurance policies that your business will have in place is your commercial auto policy. And obviously, if you do have quite a few vehicles on the road, the cost for this coverage can add up quickly. So today, I wanted to go over what actually goes into determining the cost of commercial auto insurance for contractors, and then also, how to find affordable coverage without cutting corners on coverage. Thank you for stopping by. My name's Brian. I'm an independent insurance agent based here in the state of Michigan, Metro Detroit specifically, and I work with businesses on their commercial insurance programs, as well as helping families and individuals with their personal insurance, their home, their auto insurance as well. My goal with this channel is to pass on a little bit of educational information to you so that you can make more informed decisions around your insurance, and then overall, help answer any questions that you might have. So let's get into it. And before we get too far into the video, I do want to invite you to subscribe to the channel. And if you find this video helpful, useful, anything like that, please feel free to like, share, pass it along with anyone else as well. So the first thing I want to mention is that it is extremely important that your business does have a commercial auto policy in place, not a personal one. If you have any vehicles that are being used by the business on a regular basis, you should have a commercial policy in place because many personal policies will exclude business use. Now, as far as what a commercial auto policy actually covers, the first one I want to mention is liability coverage. This protects your business if one of your vehicles causes damage or injury to a third party. So the simplest way to think about this is if one of your vehicles is in an accident, somebody gets hurt, and then there's a lawsuit that follows, this is where this coverage would step in. For most businesses, the starting point for this coverage will be a million dollars. And it can be common for many contracts that you have in place to require at least having this amount of coverage. But depending on who you're working with, you might need more or potentially an umbrella policy to add that additional liability coverage. So just something to watch out for as well. Now here in Michigan, even though this will be a commercial auto policy, you still are required to make a personal injury coverage selection, also sometimes referred to as PIP coverage. And just like a personal policy, I always recommend selecting Unlimited for this coverage. The cost difference between Unlimited and another coverage amount is usually minimal, so it's almost always worth it. Then there's the physical damage coverage for your actual vehicles. This would be your comprehensive and collision coverage. Collision covers if you are in an accident with another vehicle. And then comprehensive is fire, theft, vandalism, or any weather damage. And another coverage always worth considering is hired and non-owned auto coverage. This is an endorsement that you can typically add onto a commercial auto policy and provides liability coverage to your business for any rented vehicle or maybe personal vehicles that are used on an occasional basis for a work errand here or there by yourself or one of your employees. Now what makes a commercial auto policy less expensive than another? There are a few main factors to consider. Things like the driving history for yourself and any of your other drivers that you have listed on the policy. Having clean records can definitely help lower your rates. And the type of vehicles you have also play a role. Lighter service vehicles will cost less to insure than heavier vehicles like dump trucks. And your business's radius of operations is also a factor. If your business is maybe just local to Southeast Michigan or maybe just the Grand Rapids area versus servicing all over the Midwest, this can impact your rates as well. The number of vehicles you have on the policy will obviously also impact rates. The more vehicles you have, the higher your premium. But at the same time, the more vehicles you have, the rate per vehicle will actually typically be lower. This will depend on a variety of factors, but that can be the case for the most part. And then the coverages you need and the coverage amounts will also play a role. And at the same time, the deductibles that you choose for your comp and collision coverages will impact your rates as well. Higher deductibles, lower rates. So if you are comfortable with that, it's worth considering. Now let's talk about some tips on how to actually save on your commercial auto insurance. Number one is going to be to make sure that you are working with an insurance company that specializes in contractors. When you work with an independent agent that does have access to multiple insurance companies, this can definitely help. Because when you work with an insurance company that has a better appetite for contractors versus another, they will almost always have better rates as well. And an independent agent will typically partner with more than one insurance company. And there might be one that is a better fit for general contractors, one that's a better fit for plumbing and HVAC businesses. So again, working with a specialist can definitely help. Then if the option is available, look to bundle your commercial auto insurance coverage with any other policies that you might have in place, like general liability insurance or worker's comp. Having more policies with one insurance company can definitely help lower your rates. Then if you don't have things in place like a formal distracted driving policy or a fleet safety management program, and maybe if your business is big enough, a telematic system as well. If you do have some of these safety protocols in place, there are certain insurance companies out there that will give discounts. So if you don't have them in place, look to maybe implement them. And if you do ask if your insurance company will give a discount for having them. And also to note with those, not only will they help potentially lower your insurance rates, they can definitely help prevent claims and overall just keep your drivers safe around the road. Now, as far as cost for a commercial auto policy goes, let's say you're looking at pretty standard coverages, $1 million in liability, and then you also want comp and collision coverage on the policy. For a service van or pickup truck, on the low end, you might be looking at $2,000, $2,500 a year, up to $4,000 a year. And this would be per vehicle, per year, again, depending on the factors we discussed. Sometimes rates can be lower, or again, sometimes they can be higher. And now for heavier trucks, the cost can easily be $5,000 to $10,000 a year or more, because again, there just really is a higher liability exposure for the insurance companies when they're taking on that risk. And the last thing I want to leave you with is that cheap doesn't necessarily have to mean bare bones coverage. Fortunately, there are a lot of great options here in Michigan when it comes to commercial auto insurance for contractors. So you really can find a nice balance between affordability and having the right coverage in place. So thank you for watching. And if you are looking for help with your commercial auto insurance or commercial insurance program as a whole, I would love the opportunity to work with you and see if our team can help. There are a lot of ways to get ahold of me and they should all be in the description below. Please feel free to text, call, email, fill out a contact form, whatever's easiest. And if you have any other questions about insurance, please feel free to either reach out directly or leave them in the comments below. I would love to help answer those as well. So thank you again.