Commercial Auto Insurance Requirements by State: What Your Business Must Know

 

If your business owns or uses vehicles for any purpose whether it’s delivering goods, transporting clients, or traveling between job sites you need commercial auto insurance. This type of insurance protects your company’s vehicles, drivers, and finances in the event of an accident, theft, or damage. But here’s the catch: commercial auto insurance requirements vary by state, and not understanding these rules could leave your business at risk or even non-compliant with the law.

Each state sets its own minimum insurance coverage that businesses must carry for their commercial vehicles. So, whether you're operating in California, Washington DC, Virginia, Maryland, Georgia, Pennsylvania, or Tennessee, knowing your specific obligations is crucial. This guide breaks down what you need to know clearly, simply, and by state.

What Is Commercial Auto Insurance?

Commercial auto insurance covers vehicles used for business. This includes cars, trucks, vans, and even trailers. It’s different from personal car insurance because it accounts for higher risks tied to business use, such as multiple drivers, long distances, and transporting goods or tools.

Typical coverage includes:

• Liability Insurance – Covers injury or property damage to others.

• Collision Coverage – Pays for damage to your vehicle in an accident.

• Comprehensive Coverage – Covers non-accident damage like theft or fire.

• Uninsured/Underinsured Motorist Coverage – Protects you if the at-fault driver lacks insurance.

• Medical Payments or Personal Injury Protection (PIP) – Covers medical expenses for you or your drivers.

Minimum Commercial Auto Insurance Requirements by State

Let’s look at the required minimums and key rules in the following states:

1. Commercial Auto Insurance in California

In California, all vehicles personal or commercial must carry liability insurance. For businesses, especially those using trucks or delivery vans, the state requires commercial auto insurance with at least:

• $15,000 for bodily injury per person

• $30,000 for bodily injury per accident

• $5,000 for property damage

However, if you’re a trucking company or transport passengers (like shuttle services), you may need higher limits and additional coverage such as cargo insurance or workers’ compensation.

California is strict about insurance proof. Businesses must carry documentation and may need to file forms like the MC 65 MCS-90 (for carriers).

2. Commercial Auto Insurance in Washington DC

In the District of Columbia, the minimum coverage is slightly higher than in some other states:

• $25,000 for bodily injury per person

• $50,000 for bodily injury per accident

• $10,000 for property damage

• $25,000 per person / $50,000 per accident in uninsured motorist coverage

DC also requires Personal Injury Protection (PIP) unless the business opts out formally.

If you operate commercial vehicles like taxis or delivery trucks in DC, expect higher insurance requirements and possible registration with the DC Department of For-Hire Vehicles.

3. Commercial Auto Insurance in Virginia

Virginia is unique. Businesses can pay an uninsured motorist fee of $500 instead of carrying insurance but this leaves your business unprotected in an accident.

That said, the minimum recommended commercial auto insurance in Virginia is:

• $30,000 for bodily injury per person

• $60,000 for bodily injury per accident

• $20,000 for property damage

If your vehicles transport goods or passengers, or cross state lines, you’ll need additional federal filings like a BOC-3 and MCS-90.

Tip: If you own more than 25 vehicles, Virginia may classify you as a fleet, which can lead to different requirements or group policy discounts.

4. Commercial Auto Insurance in Maryland

In Maryland, the law mandates:

• $30,000 for bodily injury per person

• $60,000 for bodily injury per accident

• $15,000 for property damage

Plus, businesses must carry uninsured/underinsured motorist coverage and PIP (unless waived).

For companies that operate limousines, buses, or heavy trucks, Maryland may require commercial liability filings, depending on the weight and use of the vehicle.

5. Commercial Auto Insurance in Georgia

Georgia has strong enforcement for vehicle insurance. The minimum commercial auto liability requirements are:

• $25,000 for bodily injury per person

• $50,000 for bodily injury per accident

• $25,000 for property damage

However, if you’re involved in interstate commerce, like trucking, Georgia enforces federal FMCSA regulations, which may mean up to $750,000 to $5 million in liability coverage.

Georgia also uses an electronic insurance verification system, so keeping policies current is critical.

6. Commercial Auto Insurance in Pennsylvania

In Pennsylvania, the minimum coverage includes:

• $15,000 for bodily injury per person

• $30,000 for bodily injury per accident

• $5,000 for property damage

• $5,000 in medical benefits (first-party)

Pennsylvania requires first-party medical coverage, which is unique compared to many states.

If your commercial vehicle is a truck or bus, you might also need to comply with PA PUC (Public Utility Commission) rules or FMCSA if traveling interstate.

7. Commercial Auto Insurance in Tennessee

Tennessee requires all vehicles to have at least:

• $25,000 for bodily injury per person

• $50,000 for bodily injury per accident

• $25,000 for property damage

Businesses that operate passenger transportation, such as taxis or charter vans, may be required to carry higher limits and file proof of insurance with the Tennessee Department of Safety.

Failing to maintain insurance can result in suspended registrations and large fines.

Tips to Stay Compliant Across States

If your business operates in multiple states, or your vehicles cross state lines, consider these steps:

• Check both state and federal requirements.

• Work with an insurance agent familiar with commercial policies in your industry.

• Regularly review your policy to make sure your coverage limits still meet your needs.

• File required forms like MCS-90, BOC-3, or intrastate authority forms as needed.

• Keep documentation in your vehicles. Many states require proof of insurance during stops or inspections.

What Happens If You Don’t Have Commercial Auto Insurance?

Running a business vehicle without the required insurance can lead to:

• Heavy fines

• Suspension of vehicle registration

• Personal liability in accidents

• Business shutdowns

• Revoked licenses for commercial drivers

It’s not just about following the law, it's about protecting your business assets and ensuring your employees and clients are safe.

Final Thoughts

Every state has different rules, and when it comes to commercial auto insurance, the risks are too high to take shortcuts. Whether you’re driving a delivery van in California, a company car in Washington DC, or a cargo truck through Georgia, make sure your policy meets that state’s requirements and fits your specific business needs.

Insurance isn’t just a legal requirement, it's a business safeguard. Review your state’s requirements, talk to a qualified agent, and keep your vehicles (and business) fully protected on the road.