What Factors Into Commercial Auto Insurance Rates in Massachusetts?

You probably already know that one of the most important factors in determining your commercial auto insurance rates are the driving records of your employees who are taking your vehicles out on the road. In fact, on an annual basis, your commercial auto insurance carrier reviews all of your drivers and evaluates their driving backgrounds. The insurer is particularly taking note of any accidents or moving violations, which would make a driver a higher risk to insure and, ultimately, mean higher commercial auto insurance rates for your company.

However, what kind of drivers you have on your team isn’t the only factor that will determine your commercial auto insurance rates or affect your premiums. Here are five other key areas that your insurer will take into consideration:


There are three main business vehicle classifications – Service, Retail, and Commercial – and, within each of these classifications, there are even more ways an insurer will categorize your vehicles. In addition, you may have several different vehicles – cars, trucks, vans – that all need to be classed and rated separately. If your head is spinning from classifications, we’re not surprised and you’re certainly not alone. Many business owners are not 100% sure how to class their vehicles nor do they completely understand the right coverages and the requirements for that classification. As a result, you could end up with the wrong coverage, get delayed responses and settlement of any claims you have to file, and be leaving your company exposed to unnecessary risk. In addition, classifications make up a significant part of your insurance premium, so if this is incorrect on your insurance application, you could end up paying 20 to 50% more than you should be for your commercial auto insurance.

The Original Cost Of Your Vehicles

When you’re choosing to add vehicles to your fleet of cars, trucks, vans, taxis or limos, you will want to consider their “cost new” value as well as the cost of adding features because this value can affect your commercial auto insurance premium.

Age Of Your Vehicles

This is an important factor that insurers consider because claim payments for physical damage losses are calculated based on a vehicle’s actual cash value (ACV), which declines as your vehicle ages. An aging vehicle actually has a positive effect on your premiums because as your vehicle ages year after year, the premiums charged for physical damage coverage will decline. However, if you allow your fleet to get too old and/or have vehicles that fall into disrepair, then this could mean your premiums go back up as many insurers will see these vehicles as a greater risk for accidents.

Gross Vehicle Weight

While a standard passenger car generally weighs a few thousand pounds, your company’s small shuttle vans may weigh between 5,000 to 7,000lbs and your fleet of 14-wheelers could weigh as much as 80,000 to 100,000lbs or more. Clearly, the heavier the vehicle, the slower it moves on the road, the harder it is to bring to a stop, and the more difficult it is to turn. In addition, the more your commercial vehicles weigh, the more damage they can cause should there be an accident, which generally translates into a higher premium.

Radius Of Use

This is the distance a vehicle normally travels each day from the place where it is stored. There are three ways that your vehicle could be classified based on this mileage – local (up to 50 miles), intermediate (up to 51 to 200 miles) or long distance (more than 200 miles). Insurance carriers favor vehicles that travel less than 250 miles per day, regardless if your drivers stay in state or travel across states. Commercial auto insurance premiums will be higher for vehicles that travel long distances because they simply have a greater opportunity to be involved in an accident versus those that travel short distances.

While these are some of the top factors involved in setting your commercial auto insurance premium, there are several more that could impact your rates, at least slightly. Whether you haul hazardous materials or transport multiple people around at a time, unique circumstances like these will play a role in not only setting your insurance rates but also in selecting the carrier that best fits your needs.

Gilbert Insurance is your professional and experienced local, independent insurance agent who understands the intricacies of the commercial auto insurance marketplace. Our team will not only help you manage one of the major cost drivers of commercial auto insurance – your drivers and their driving backgrounds – but can also help you evaluate all the other areas that may be impacting your commercial auto insurance premiums.

Please call us at (781) 942-2225 for a complimentary review of your existing policy or to get a quote.