Texas state law requires commercial auto insurance for any vehicle used for business purposes, from food trucks to ridesharing vehicles. On average, commercial insurance costs between $260 and $1,420 per month in Texas.

Since a business auto policy works differently from personal auto insurance, understanding the ins and outs of commercial auto insurance can help you find the best auto policy for your business’s needs.

Here’s what you need to know about commercial car insurance in Texas.

Commercial car insurance requirements in Texas

Texas requires anyone driving for business activities to carry commercial car insurance, including workers using personal vehicles for business purposes, such as ridesharing.

The minimum liability coverage requirements for commercial vehicles in Texas are:1

• $30,000 per person and $60,000 per accident in bodily injury liability coverage

• $25,000 in property damage liability insurance coverage per accident

Experts recommend purchasing coverage above these minimum liability limits.

Commercial auto policies in Texas must also include uninsured/underinsured motorist coverage (UM/UIM) and personal injury protection (PIP), but businesses can sign a waiver to reject them.

Unless you specifically opt out, your commercial car insurance policy will include these coverages:1

• Uninsured/underinsured motorist insurance: This coverage helps pay for damage to your work vehicles or for medical expenses in an accident with a driver who doesn’t have enough coverage or any coverage at all.

• Personal injury protection: This coverage can help pay for medical expenses if there’s an accident while driving for business purposes. If the injury is unrelated to an accident — even if it occurs in a vehicle — workers’ compensation insurance covers the expenses, not PIP.

Optional commercial auto insurance coverages

To minimize their risk, Texas business owners and professional drivers may want to add the following optional coverages to their commercial auto insurance:2

Do you need commercial car insurance in Texas?

Anyone who uses a vehicle for business purposes in Texas probably needs commercial car insurance. Here are some examples of businesses that need commercial insurance.

• Any business with multiple work vehicles, such as a:

  • Towing company with more than one tow-truck vehicle

  • Florist with a fleet of delivery vehicles

  • Taxi company with both taxis and limousines

  • Contractor with multiple pickup trucks

  • Trucking company with a fleet of box trucks, cargo vans, and other large work vehicles

• Any workers using personal vehicles for business purposes, including:

  • Drivers of ridesharing vehicles

  • Real estate agents taking clients to properties

  • Professionals in the construction trades driving supplies to jobsites

If you drive for business activities, you need commercial auto insurance. That’s partially because you spend more time in the car, which increases your chances of an accident. But having a business auto policy will also better protect your assets in case of a lawsuit.

Best commercial car insurance companies in Texas

Getting insurance quotes from more than one company is the best way to find the right commercial car insurance company for your business’s needs. To help you with your search, here are three of the best commercial car insurance companies available in the Lone Star State.

State Farm: Best for personalizing

Progressive: Best for usage-based insurance

Travelers: Best for holistic risk management

Average cost of commercial car insurance in Texas

In Texas, the average monthly cost of commercial car insurance ranges from $260 to $1,420, while the national average ranges from $220 to $1,200.

Insurance premiums depend on a number of factors, including the type of business, the size of your vehicle fleet, your coverage needs, and where you drive and park your work vehicles. The size, age, and type of work vehicles, as well as the driving record of every driver in your workforce, can also affect your premiums.

What business owners should know about commercial auto insurance in Texas

While gathering commercial auto insurance quotes, remember these important considerations:

• Prepare for premium costs. Business auto policies cost more than personal auto policies because there’s a higher risk. If you’re driving for work, you spend more time behind the wheel. Commercial auto insurance also typically has higher liability limits to protect your business assets from possible lawsuits.

• Assess your risk level. Figuring out your coverage needs requires you to think about the size of your fleet, the driving record and experience of your employees, the purpose of your work vehicles, as well as their age, condition, and location.

• Know the exclusions and limitations. Commercial auto policies may exclude or limit coverage. For example, your policy might not cover the work equipment in your cargo van or extend coverage to a nonemployee driver.

• Learn the claims process. While it may be similar to the claims process for a personal auto insurance policy, make sure you ask your insurer to guide you through the claims process so you don’t miss anything.

• Understand potential tax implications. Many businesses may be able to deduct commercial auto insurance premiums from their taxes. Keep your policy documents and receipts for your premiums so you can discuss them with your tax professional.

How to get commercial car insurance in Texas

When you’re ready to purchase commercial car insurance in Texas, follow these steps:3

1. Reach out to an independent insurance agent. Contact an independent insurance agent to help build a customized coverage profile and get quotes.

2. Find the documents you need. The application process will require several documents about your business’s work vehicles, including vehicle types and uses, vehicle registration, and ownership information. You’ll also need copies of your employees’ driver’s licenses and driving records, and any current insurance information.

3. Decide what coverages you need. Choosing the appropriate coverage level and liability limits is possibly the most important part of this process. Don’t assume that decreasing coverages or liability limits is the best way to cut costs, since it could leave you and your business vulnerable in case of an emergency.

4. Buy your policy. Once you purchase the business auto policy that’s right for you, your insurance company will send a certificate of insurance that summarizes your coverage. In some industries, businesses must display this certificate to do business.

Commercial auto insurance in Texas FAQs