Why You Need It

Liability Protection

Liability coverage pays for damages caused to others, including bodily injury and property damage. Michigan's PPI alone covers up to $1 million in damage to others' property caused by your vehicle. Bodily injury coverage is part of liability coverage, and many carriers recommend at least $500,000 in liability coverage for businesses with real exposure. Liability coverage also helps pay for legal defense costs if your company faces a lawsuit after an accident.

Protects Your Company's Assets

A commercial auto policy covers medical bills and legal fees after accidents, shifting those costs from your balance sheet to your insurer. Without coverage, businesses face legal risks that can include judgments well beyond state minimums. Operating without it means absorbing every dollar of a claim directly. Some medical expenses for employees injured in vehicle accidents may also be covered under the company's workers' compensation policy, complementing the commercial auto insurance coverage.

Covers Multiple Vehicle Types

Commercial auto insurance covers vehicles owned or leased by businesses, from light trucks and cargo vans to specialized equipment on wheels. Whether you operate food trucks, tow trucks, a fleet of service vans, or vehicles associated with contractors like electricians, HVAC technicians, and plumbers, a single commercial auto policy can cover vehicles across categories and weight classes.

Employee Coverage Included

Hired and non-owned auto coverage protects businesses when employees use their personal vehicles for work. This matters because personal auto policies typically do not cover business vehicle use. This coverage closes a liability gap that many small business owners overlook, and it's especially important for contractors whose employees travel between jobsites in their personal vehicles.

What Makes It Different

Personal auto insurance covers commuting and personal use. The moment a vehicle carries tools to job sites, delivers goods, or transports passengers for hire, most personal auto policies exclude that activity. If an accident occurs during excluded business use, the insurer can deny the claim, leaving the business owner personally liable.

Business-Specific Coverage

Commercial auto insurance extends to risks personal policies won't touch: transporting cargo, carrying mounted equipment, loading and unloading at client locations. Commercial auto insurance is required for vehicles used for work in Texas, and Michigan imposes its own set of mandatory coverages including PIP and PPI. A personal auto policy simply wasn't designed for these exposures.

Higher Liability Limits

Personal auto insurance typically offers state-minimum limits. Commercial policies start at Michigan's $250,000/$500,000 floor and scale to $1 million, $1.5 million, or $5 million depending on operations. For-hire passenger carriers with 9 to 15 seats must carry $1.5 million in liability; those with 16 or more seats need $5 million. Higher liability limits usually result in higher premiums, but they also prevent a single judgment from exceeding your coverage limits.

Fleet Management Options

A commercial auto policy can cover your entire fleet under one agreement. Add or remove vehicles as your business grows, track loss ratios across the fleet, and access volume pricing. Carriers like Progressive evaluate driving history over three years for all drivers and offer discounts for full payment. This consolidation gives you one renewal date, one deductible structure, and one place to manage risk.

How It Works

01

Business Assessment

We collect a vehicle list (type, GVWR, usage pattern), driver histories, route geography, and cargo details. For Michigan businesses, we also determine your PIP election level and whether operations are intrastate or interstate. This assessment identifies the specific factors that drive your premium.

02

Custom Coverage Design

Based on the assessment, we build a policy with the right coverage options: liability (BI/PD or Combined Single Limit), physical damage coverage (collision and comprehensive), uninsured/underinsured motorist coverage, and hired/non-owned auto. Deductibles, endorsements, and per-vehicle limits are set to match your operations. Location affects premiums too — urban Michigan areas like Detroit carry higher risk profiles than rural routes.

03

Ongoing Protection

Your policy adjusts as your business changes. Adding vehicles, expanding to interstate routes, or hiring new drivers triggers a review, and a strong driving record can lower costs at renewal. We monitor compliance with Michigan state law and federal FMCSA requirements so your coverage stays current.

Commercial Auto Insurance Cover Details

Auto Liability Coverage

Covers bodily injury and property damage you cause to others. Michigan requires $250,000/$500,000 bodily injury and $10,000 property damage (out-of-state). Liability coverage is mandatory for all business vehicles in Texas, and Michigan imposes its own minimum structure — most programs recommend limits well above the state floor.

Physical Damage

Includes collision and comprehensive options. Collision pays for damage from impact with other vehicles or objects; comprehensive covers theft, weather damage, vandalism, and animal strikes. More vehicles typically increase overall cost, but per-vehicle deductibles let you balance premium against out-of-pocket risk.

Medical Payments / PIP

Covers medical expenses for drivers and passengers regardless of fault. Michigan's no-fault law requires PIP on all commercial auto policies, with six available coverage levels — helping pay for medical care, lost wages, and related expenses after an accident.

Uninsured/Underinsured Motorist

Protects drivers from losses caused by uninsured motorists. This is optional in Michigan but covers a real gap: if another driver with no insurance causes an accident, your policy responds.

Hired and Non-Owned Auto

Covers vehicles borrowed or rented for business, protecting your company when employees drive rental cars on business trips or use a personal vehicle to run work errands. Without this coverage, your business absorbs the liability even though you don't own the vehicle involved.

Special Coverages

Cargo insurance for hauled goods, on-hook tow truck liability, equipment mounted on commercial vehicles, and endorsements for hazmat or interstate hauling. Roadside assistance can be added to reduce downtime when a vehicle breaks down between job sites.

Who It's For: Business Vehicles

Service Contractors

Plumbers, electricians, HVAC technicians, and painters who drive trucks and vans loaded with tools and equipment between job sites daily.

Manufacturers and Suppliers

Companies with fleet vehicles delivering parts or supplies locally or across state lines. Michigan's manufacturing corridors in Detroit and Flint depend on reliable vehicle fleets.

Small Businesses with Employee Drivers

Cleaning services, landscaping crews, and mobile repair operations where employees drive company vehicles or use personal cars for business purposes. These businesses carry higher risk because of frequent road time.

Delivery and Mobile Service Operations

Courier services, food trucks, and non-emergency medical transport. These operations often need high liability limits and specialized coverage due to goods transport or passenger exposure.

If your business sends vehicles out for work — whether you own them, lease them, or rely on them daily — that's a reason to have them insured. If customers, employees, or cargo are on the road, so is your risk.

Yes. If employees regularly drive their own personal vehicle to perform tasks for your business, hired and non-owned auto coverage protects your company against liability claims from those trips. A personal auto policy on the employee's car won't cover your business's exposure. Even occasional use creates risk: if an accident caused by an employee on a work errand results in a lawsuit, the injured party will name your company.

Michigan's average personal auto insurance premium runs about $2,691 per year; commercial auto insurance cost starts above that baseline because of higher liability limits and business-specific exposures. Progressive's national average for business auto insurance customers is about $276 per month, and contractor policies average around $260 per month. Michigan rates often exceed the national average due to the no-fault system. Key factors include vehicle type, GVWR, driver records over the past three years, local versus interstate use, cargo type, geographic location, and selected coverage limits.

Personal auto policies cover commuting and personal use. Commercial auto insurance extends to vehicles used for deliveries, client visits, cargo transport, and employee driving. Commercial policies allow multiple drivers, offer higher coverage limits, cover commercial vehicles like heavy trucks and mounted equipment, and provide Certificates of Insurance for client contracts. Using a work vehicle under a personal policy risks a denied claim.

Yes. Most commercial auto policies let you add or remove vehicles at any time. Notify your carrier when adding a vehicle, and the premium adjusts accordingly. You can also shift coverage types per vehicle — for example, carrying full physical damage on a new truck but dropping collision coverage on an older van. Workers' compensation and general liability can be coordinated alongside your auto policy as your team and fleet expand.

Frequently Asked Questions

Ready to Protect Your Business?

Redwood Insurance Solutions is a Michigan-based independent agency that works with multiple insurance carriers to build commercial auto policies around your specific operations — not a one-size template. We handle claims directly instead of routing you through a national call center.

If your business owns, leases, or relies on vehicles for work, contact us for a consultation. We'll assess your fleet, drivers, and routes, then design a policy that fits your budget and meets Michigan's requirements.