COMMERCIAL AUTO INSURANCE: WHAT EACH TRUCK COSTS AND WHERE IT GOES.
The premium is built vehicle by vehicle from the vehicle and its weight, how it is used, how far it travels from where it is kept, the garaging address, the drivers' records, the claims history and the limits. The bill comes as one number, but it belongs to individual trucks. A truck assigned to a crew belongs in the cost of that crew's hours. The owner's pickup, a spare truck and the hired and non-owned coverage belong in overhead. One at-fault accident can raise the premium for about three renewals.
This page explains what moves the auto premium, how to divide it between job cost and overhead, and what one at-fault accident costs through the premium over several years.
WHAT IT MEANS.
Commercial auto insurance is the policy that covers liability, and usually physical damage, for the trucks, vans and trailers a contractor uses on public roads, and it is priced one vehicle at a time from how each is used, where it is kept and who operates it.
This page is about commercial auto, the policy for trucks, vans and trailers on public roads. Owned machines such as excavators and skid steers are usually insured on an equipment floater, which is a different policy with its own premium. A floater generally does not cover work trucks, and an auto policy generally does not cover mobile equipment, but policies define those terms differently. Self-propelled machines that are not licensed for the road are where they differ, so SPM asks the broker which policy holds each unit.
A licensed broker places the coverage and advises on limits, and this page does not say what to buy. Contract insurance requirements and state law differ, so check your own contract and ask your broker about your own policy.
WHAT SETS THE PREMIUM ON EACH TRUCK.
The vehicle comes first
The carrier rates each vehicle on its own, starting with the type, the weight class, the age and the value. Much of that can be read from the VIN. Heavier vehicles are priced higher because they can cause more damage in a crash, and physical damage coverage is priced on what the vehicle is worth. A dump truck, a flatbed, a service van and a half ton pickup are four different vehicles to a rating plan, even when they belong to one crew.
How the truck is used and how far it goes
One commercial auto rating manual sorts trucks into three use classes: service, which is hauling people and tools to and from job sites, retail, which is pickups and deliveries to households, and commercial, which is hauling property that is neither. It also sorts them by radius of operation, measured from the place the vehicle is garaged: local is up to 50 miles, intermediate is 51 to 200 miles and long distance is more than 200. A truck takes the longest radius class unless 80 percent or more of its operation falls in a shorter one. Carriers vary, and your carrier's filed rules apply. One broker article describes a distributor with nine trucks rated as long distance when only four were, and correcting the classes saved 15 percent.
Where it is kept and who operates it
Rates are generally set by territory, so the overnight address of the truck is part of the price, and the garaging address on the policy should be the real one. Carriers also order motor vehicle records. Risk control guides from two large carriers sort drivers by at-fault accidents and violations in the last three years, and by serious violations over five years, and they treat two at-fault accidents in three years as a reason for review or worse. Cutoffs differ by carrier, and states differ on how long a violation remains on a record. At renewal the carrier also looks at how often claims happen and how large they are.
Limits, covered auto symbols, and hired and non-owned autos
Coverage is tied to vehicles by covered auto symbols, a number beside each coverage on the declarations page. In the standard ISO business auto form, symbol 1 is any auto, symbol 7 is specifically described autos, symbol 8 is hired autos and symbol 9 is non-owned autos, such as an employee's own vehicle used for work. A coverage applies only to the autos its symbol describes. Under symbol 7, a vehicle bought during the year is picked up only if it is reported within 30 days, with conditions. Hired and non-owned coverage is liability only, it does not cover commuting and it does not repair the employee's own car. It is often added to the general liability policy, and sources differ on whether subcontractors' vehicles are included, so the wording decides. Hired autos are usually rated on cost of hire, which is the dollars spent hiring vehicles plus the related costs.
Trailers, towed equipment and the physical damage deductible
Trailers are usually insured on the auto policy for liability, and for damage up to actual cash value if the policy covers them for physical damage. A dump trailer or a loaded equipment trailer can be worth more than the policy would pay, and a trailer can instead be scheduled on the equipment coverage for an agreed amount. Ask the broker which policy holds each trailer. Physical damage deductibles apply per vehicle per occurrence, so a hailstorm over the yard can trigger the deductible on every truck in it. The deductible is cash the company pays when the loss happens. It does not appear in the premium, so it needs its own reserve.
What changes the premium mid-year
Adding a truck means the carrier changes the policy by endorsement and adjusts the premium. Adding a driver can change it too, because the driver's record is part of the rating. Where the policy is audited, the estimated premium is based on the exposures reported at the start, and the carrier computes the final premium from the actual exposures and bills the balance or refunds the difference. A fleet that grew, or a company that spent more on hired vehicles than it estimated, can receive an additional bill after the year has closed.
One bill, many trucks, no one dividing it
The premium comes as one payment and the bookkeeper posts it to one account. Every truck then looks the same on the job reports, and a crew truck that costs $6,000 a year to insure shows no auto cost on the jobs where it works. Those jobs look more profitable than they are, and overhead looks larger than it should. The fix is a vehicle schedule with a cost on each line.
WHAT IT LOOKS LIKE IN DOLLARS.
Take a crew truck with an auto premium of $6,000 a year that works 1,800 hours on jobs. The insurance cost is $6,000 divided by 1,800, or $3.33 for each hour on a job. That is one line of the truck's hourly cost, next to the payment, fuel, maintenance and registration.
Ten vehicles: six crew trucks at $6,000 each and four others, such as the owner's pickup, two project manager trucks and a spare, at $5,000 each. The crew trucks come to $36,000 and belong in the hourly truck cost on jobs. The other four come to $20,000 and belong in overhead, along with the hired and non-owned coverage. On $8M of revenue, $20,000 is 0.25 percent of revenue. All $56,000 in overhead would be 0.7 percent and would leave the jobs with no auto cost.
Say a fleet pays $60,000 a year and, after one at-fault accident, the carrier prices the next three renewals 10 percent higher. The 10 percent is an assumed round number and not a rate. That is $6,000 a year, or $18,000 over three years. Add a $2,500 deductible and the accident costs $20,500 through premium and deductible, about 0.26 percent of $8M of revenue. The carrier pays the claim itself, and repairs, injuries and legal costs are not in this number.
WHAT WE CHANGE.
SPM asks for the declarations page and the vehicle list. Each vehicle gets a line: the crew or job it is assigned to, the garaging address, the radius, the drivers, the premium, the deductible and the policy that holds it. SPM checks the list against the policy so a vehicle on the road and missing from the policy is caught before a claim is filed.
The premium for an assigned crew truck goes into the truck's hourly cost, and that hour is charged to the job. Pickups used by the owner and the project managers, spare trucks and the hired and non-owned coverage go to overhead. See the equipment cost per job page for charging the hour and the insurance overhead page for where each policy belongs.
SPM sets aside the physical damage deductible as a cash number, so a hailstorm over the yard does not surprise the line of credit. Each claim is recorded against the vehicle, the driver and the job, with its cost and its status.
Before a truck or a driver is added, SPM asks the broker for the change in premium and puts it in the cost of the job that needs the truck. When the policy is audited, SPM compares the vehicle list and the cost of hired vehicles with the estimate so the final bill is forecast and not discovered.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing. No payroll. The one-time onboarding fee is right here in the table.
| Last 12 months revenue | Monthly fee | One-time onboarding |
|---|---|---|
| Up to $1M | $1,900 to $2,900 | $1,000 |
| $1M to $3.5M | $2,600 to $3,900 | $1,500 |
| $3.5M to $6.5M | $3,800 to $5,700 | $3,000 |
| $6.5M to $9.5M | $5,100 to $7,100 | $4,500 |
| $9.5M to $12.5M | $6,100 to $8,500 | $6,000 |
| $12.5M to $15.5M | $7,400 to $11,000 | $7,500 |
| $15.5M to $18.5M | $9,400 to $13,500 | $9,000 |
| $18.5M+ | Quoted individually | Quoted individually |
The onboarding fee covers migrating your books back to the start of your last taxable year and getting you fully operational in 60 days. It's billed once, with your first invoice. It's the same for all three tiers. Your first month is prorated, and your monthly engagement starts on the first of the first full month.
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items. The onboarding fee is right here in the table.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions and never in a report.
Your bookkeeper still does the books.
You stop touching the books.
Everything in Core, and we do the bookkeeping and the controllership as well. Your office stops answering coding questions and stops fixing a reconciliation that will not balance on the last day of the month.
We do the books. No payroll.
Every job shows its margin while it is still open.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the books, the job costing, and the software. No payroll.
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