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4 Factors That Determine Your Commercial Auto Insurance Rate

When your business depends on the transport of people or goods from point A to point B, you should be ready to encounter anything out on the road. From inclement weather to animal crossings, irresponsible maneuvers by other drivers, and many more unpredictable factors, there’s no true way to make sure that every journey unfolds without incident.

For protection against the unknown, there’s no substitute for commercial auto insurance. But have you ever wondered how your rates are calculated? While driving carries many unknowns, you may be surprised to find that you have control over some of the factors that insurance providers use to calculate your premiums.

Vehicle Type and Use

Do you use a single car to zip around town and complete freelance work? Is your large truck fleet the backbone of your operations? Commercial auto insurance policies vary greatly depending on the number and type of vehicles that are covered.

Carriers use the classification and function of commercial vehicles to help assess risk and premiums, per NetRate. For instance, trucks, tractors, and trailers that weigh more have more potential to do serious damage in an accident, and may have a harder time navigating city streets.

Rates will also vary based on the purpose of your company’s vehicles. In addition to whether a vehicle is part of a fleet or not, the Insurance Services Office (ISO) has several classifications for vehicle use that affect calculations.

- Service Use: transporting people and materials to worksites
- Retail Use: making deliveries to residences
- Commercial Use: catchall for other uses besides service and retail


Who will be allowed behind the wheel of your commercial vehicles? The driving history of your employees and associates will ultimately impact your auto insurance rates. As states, you will be responsible for collecting and providing the driver’s license numbers of every person who will be covered under your policy. From there, carriers will check driving and claim history to assess the likelihood (or risk) of a claim being filed. If you work with lower-risk drivers, you may see substantial savings in your premiums. The inverse is true, so hire wisely when considering who will get the keys to any company vehicles.


Driving down a country road is going to look and feel much different than trying to maneuver through a city at rush hour. Where you drive ultimately affects how much risk you present to carriers. Therefore, the ISO breaks down different states and regions into rating territories.

Some examples of territorial differences could be the contrast between a busy metropolitan and a completely rural area, or a coastal region versus a landlocked zone. The who, what, and where of driving come together to help determine your commercial auto insurance rates.

Credit Score

Many insurers use credit reports to gauge your business’s likelihood of filing a claim and costing them money down the line. Only California, Massachusetts, and Hawaii prohibit underwriters from using credit history to set auto insurance rates, per CBS News MoneyWatch.

The Insurance Information Institute lists several financial factors that will almost certainly play into any credit-based insurance score: payment history, bankruptcies, collections, outstanding debts, and credit history length. If your business makes credit card payments on time and avoids trouble with collection agencies for unpaid bills, it will likely be eligible for lower premiums in the long run.

It pays to work on the factors you can control on your quest for the right coverage. Keep your business running smoothly with a commercial auto insurance policy that fits your needs.

Insurance shopping simplified

Review personalized quotes, select coverages, and buy online - Everything insurance, all-in-one-place.

Insurance shopping simplified

Review personalized quotes, select coverages, and buy online - Everything insurance, all-in-one-place.

Insurance shopping simplified

Review personalized quotes, select coverages, and buy online - Everything insurance, all-in-one-place.
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