Short answer: Any vehicle your California business owns needs at least $30,000/$60,000/$15,000 in liability for policies issued or renewed since January 1, 2025 (Vehicle Code §16056), but most businesses carry far more, because client contracts often require $1,000,000. If you haul property for hire, California's Motor Carrier Permit law requires $300,000 for carriers running only vehicles under 10,000 pounds and $750,000 for general freight trucks of 10,001 pounds GVWR or more, with higher amounts for hazardous materials (Vehicle Code §34631.5), and interstate carriers have matching federal minimums. If employees drive their own cars or rented vehicles for work, add hired and non-owned auto coverage. Then build the rest of the policy around your vehicles and drivers: physical damage, uninsured motorist, medical payments, and the endorsements your contracts require. A written driver policy and regular motor vehicle record checks help control both claims and premiums.
This guide is for California businesses with one work truck or a fleet of vans, trucks and cars, from contractors and delivery companies to service businesses and sales teams. It's general information; your policy's wording, your contracts and the agencies that regulate your operation control the details.
Do you need commercial auto at all?
You likely need a commercial auto policy if any of these is true:
- The business owns or leases the vehicle.
- The vehicle is titled to the business, or used mainly for work.
- Employees drive it for business.
- You haul tools, equipment, goods or people for business purposes.
- A client contract requires commercial auto liability.
A personal auto policy may not cover business use, especially for trucks, vans or vehicles used to carry goods for pay. See does my personal auto policy cover my work truck?
California's legal minimums
| Operation | Minimum liability | Source |
|---|---|---|
| Business-owned vehicle not hauling property for hire | $30,000 / $60,000 / $15,000 for policies issued or renewed since Jan. 1, 2025, rising to $50,000 / $100,000 / $25,000 in 2035 | Vehicle Code §16056 |
| For-hire property carrier, only vehicles under 10,000 lbs | $300,000 | Vehicle Code §34631.5 |
| For-hire general freight, 10,001 lbs GVWR or more | $750,000 | Vehicle Code §34631.5; federal 49 CFR §387.9 for interstate |
| Hazardous materials | $1,000,000 or $5,000,000 depending on the material | Vehicle Code §34631.5 |
If a motor carrier's policy is canceled, the California Motor Carrier Permit is suspended. See California commercial auto insurance minimums, FMCSA vs. California motor carrier permit minimums and California commercial truck insurance requirements.
Passenger carriers, such as limo, charter and rideshare operations, have separate rules. See taxi and black car insurance and rideshare insurance requirements by state.
The coverages in a commercial auto policy
Liability
Pays for injuries and property damage your drivers cause to others. It's the core of the policy. Most commercial policies use a combined single limit, such as $1,000,000 per accident. Ask your clients and general contractors what they require before you buy.
Physical damage: collision and comprehensive
Pays to repair or replace your own vehicles. Lenders and lessors require it on financed vehicles. Decide on a deductible per vehicle, and consider whether older vehicles still need collision.
Uninsured and underinsured motorist
Pays for injuries to your drivers and passengers when the at-fault driver has little or no insurance. In California, UM coverage is included unless it's rejected in writing (Insurance Code §11580.2). For employees, workers' comp may respond first for injuries on the job, so ask how the two work together. See uninsured motorist requirements by state.
Medical payments
Pays medical bills for people in your vehicles regardless of fault, up to a limit.
Hired and non-owned auto (HNOA)
Covers liability when employees use their own cars, or rented or borrowed vehicles, for your business. If an employee crashes while running a business errand, the injured person may sue your business. HNOA responds to that liability. It usually doesn't cover damage to the employee's car. See what is hired and non-owned auto insurance?
Endorsements contracts often require
- Additional insured: adds a client or general contractor to your liability coverage.
- Waiver of subrogation: your insurer gives up the right to recover from a client.
- Primary and non-contributory: your policy pays before the client's.
Trucking-specific coverages
Motor truck cargo, trailer interchange, non-trucking liability and truckers general liability fill gaps for trucking operations. See cargo insurance, non-trucking liability vs. bobtail and trucking fleet insurance.
When a fleet policy makes sense
Many insurers treat a business with several power units as a fleet. A fleet policy can cover vehicles on one schedule, sometimes with automatic coverage for newly acquired vehicles, and pricing may consider the fleet's overall loss history and safety program. Contractors with several trucks should also read contractor fleet insurance.
How commercial auto is priced
Insurers price commercial auto differently from personal auto. They commonly look at:
- Vehicle types, weights and values
- How the vehicles are used and how far they travel
- Where they're garaged
- Driver ages, experience and motor vehicle records
- The business's loss history
- Cargo and the industry you work in
- Your safety and driver management practices
Step by step: buying commercial auto insurance
Step 1: List every vehicle
Year, make, model, VIN, weight (GVWR), who owns or leases it, and the garaging address.
Step 2: Describe how each vehicle is used
Service calls, deliveries, hauling for hire, passengers, local or long distance.
Step 3: List every driver
Include employees who drive their own cars for work. Collect license numbers and dates of birth for motor vehicle record checks.
Step 4: Check your legal and contract requirements
Note any Motor Carrier Permit or federal requirements, and every insurance clause in your client and lease contracts.
Step 5: Choose liability limits
Meet the highest requirement you face, and consider an umbrella above it. See commercial umbrella insurance.
Step 6: Decide on physical damage and deductibles
Per vehicle, based on value, financing and how much you could pay out of pocket.
Step 7: Add HNOA if employees ever drive for work
Even a single errand in a personal car is a business exposure.
Step 8: Compare quotes line by line
Compare limits, deductibles, covered auto symbols, endorsements, and how new vehicles and drivers are added.
Step 9: Set up a driver program
Write a driver policy, check motor vehicle records at hire and periodically, require seat belts and ban handheld phone use while driving. Keep vehicle maintenance records.
Step 10: Keep certificates and filings current
Send certificates to clients, keep motor carrier filings active, and calendar every renewal.
After an accident
Make sure everyone is safe, call police if anyone is hurt, take photos, exchange information and report the claim promptly. California insurers must acknowledge claims within 15 calendar days and accept or deny within 40 days of proof of claim. You can choose your own repair shop (Insurance Code §758.5). See California auto claim timelines and auto repair shop choice laws by state. If an employee was hurt, report the injury for workers' comp too. See the workers' comp guide for California small employers.
Common mistakes
- Titling a vehicle to the business but insuring it on a personal policy. The policy should match the owner and the use.
- Forgetting employees' personal cars. Without HNOA, your business may have no coverage for an employee's crash on a work errand.
- Letting unlisted drivers drive. Add every regular driver and check their records.
- Buying the minimum when contracts require more. You could lose a job, or be in breach, if your limits are too low.
- Not reporting new vehicles. Ask how long a newly acquired vehicle is covered automatically, and report it right away.
- Overlooking tools and equipment in the vehicle. Commercial auto usually doesn't cover tools; an inland marine or tools policy does.
Questions to ask your agent
- Which covered auto symbols does the policy use, and do they include hired and non-owned autos?
- How long is a newly acquired vehicle covered before I have to report it?
- Does the policy meet every additional insured, waiver and primary wording requirement in my contracts?
- What are the physical damage deductibles per vehicle?
- Who is allowed to drive, and how are new drivers approved?
- Are tools and equipment in the vehicles covered, or do I need an inland marine policy?
- Does the policy include the filings my Motor Carrier Permit or federal authority requires?
- Will a written driver safety program earn a credit?
Key terms
- Combined single limit: one liability limit for bodily injury and property damage per accident.
- Covered auto symbols: codes on the policy that define which vehicles are covered.
- HNOA: hired and non-owned auto liability.
- Physical damage: collision and comprehensive coverage for your own vehicles.
- MVR: a driver's motor vehicle record.
- GVWR: gross vehicle weight rating, used to set many trucking requirements.
Your yearly fleet review
Before each renewal, update the vehicle schedule and driver list, pull fresh motor vehicle records, and compare your limits with your current contracts. Review last year's claims with your broker: what caused them, and what changed afterward? Confirm that vehicles you sold were removed and new ones were added, and that certificates you issued during the year still match the policy.
Related state tables and guides
- Commercial auto insurance
- What insurance a box truck business needs
- Small business insurance in California: required vs. recommended
- Insurance for California contractors and tradespeople
- State insurance rules hub
Frequently asked questions
What is the minimum commercial auto insurance in California?
For a business vehicle not hauling property for hire, $30,000/$60,000/$15,000 for policies issued or renewed since January 1, 2025 (Vehicle Code §16056). For-hire carriers need $300,000 or $750,000 depending on vehicle weight, and more for hazardous materials (Vehicle Code §34631.5).
Does my personal auto policy cover a vehicle I use for work?
Not always. Personal policies may exclude or limit business use, especially for trucks and vehicles used to haul goods for pay. Ask your insurer, and consider commercial auto.
What is hired and non-owned auto coverage?
Liability coverage for your business when employees use their own, rented or borrowed vehicles for work. It usually doesn't cover damage to the employee's car.
How much liability should a business carry?
At least what your legal and contract requirements demand. Many client contracts require $1,000,000, and many businesses add an umbrella.
When is a fleet policy worth it?
When you have several vehicles. A fleet policy can simplify coverage, sometimes automatically cover new vehicles, and reward a strong safety program.
What happens to my motor carrier permit if my insurance is canceled?
In California, the Motor Carrier Permit is suspended when the required insurance is canceled, so keep the policy and filings active.
Alishahi Insurance · 439 N Canon Dr, Penthouse, Beverly Hills, CA 90210 · (877) 711-4545 · CA License #4348151. General information only. Not legal, tax or financial advice, and not a coverage determination. Coverage depends on policy language and underwriting.