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What Do States Require for Commercial Auto Insurance? – business.com – Business.com

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If your company uses vehicles for work, commercial auto insurance is one of the most critical business insurance policies to obtain. Just as with personal vehicles, commercial vehicles are required to carry a minimum amount of insurance. If you’re driving without the appropriate insurance, you could be ticketed and fined – not to mention inadequately covered if there’s an accident and someone files a claim.
Here’s what you need to know about the legalities of commercial auto insurance and what your state requires.
Every state has its own auto insurance requirements for commercial vehicles. In a few cases, you’ll see the same minimum requirements as there are for personal vehicles, but for the most part, commercial limits are higher than personal limits. 
Remember that the state requirement is the minimum amount the state mandates you carry. It’s critical to discuss your coverage with your insurance agent to make sure you have enough coverage, since many business owners would be subject to lawsuits if they’re not appropriately insured. 
Did you know?Did you know? Many of the best liability insurance providers have their own minimum coverage limits for commercial auto insurance, which may be higher than state limits.
The type of vehicle you have may impact a state’s commercial auto insurance requirements. Passenger vehicles usually have one type of requirement, while freight and cargo vehicles have another. You’ll be subject to stricter requirements in most states if you transport hazardous materials.  
If you transport people or materials across state lines, your state insurance goes with you. In most instances, if the state limits where the car is registered are less than the state limits where you’ll be driving, the insurance carrier will match the limits, so you meet the legal requirements. 
Some states have interstate coverage requirements you must meet if you cross state borders when transporting people or goods. Make sure to stay within coverage territories, and note that limits may change once you drive into Mexico or Canada. 
Did you know?Did you know? Commercial auto insurance doesn’t cover medical expenses if an employee is driving and gets hurt. You’ll need workers’ compensation insurance for your employees’ medical expenses.
There are two different ways that states can require coverage. 
The first coverage type sets per person, per accident and property damage individual limits. When reviewing your coverage limits in this scenario, you may see three numbers that represent your total coverage, similar to your personal auto insurance. Each number covers an accident differently. For example, you might see coverage limits that look like this: 25/50/10. Those numbers represent dollar amounts multiplied by 1,000. 
In the second type of coverage requirement, the amount of coverage is listed as a single limit, known as a combined single limit. This is most the insurance company will pay per accident.  
Take a look at your state’s requirements in the compilation below. 
Alabama’s requirements are based on whether or not you are carrying passengers or nonhazardous materials. 
Requirements based on seating capacity:
Requirements if transporting nonhazardous materials: 
Learn more about Alabama motor carrier regulations
Alaska’s requirements are the same whether you are transporting property or people: 
Learn more about the Alaska commercial motor vehicle law
Arizona’s requirements are contingent on whether it’s a passenger vehicle and the types of materials being transported. 
For passenger vehicles, it depends on the number of people the vehicle can hold.
If the vehicle transports nonhazardous materials, the vehicle’s weight comes into play. 
The requirements are different for hazardous materials carriers: 
Learn more about Arizona’s financial responsibility law
Arkansas requirements are contingent on how many passengers are being transported and which types of materials are carried. 
For passenger vehicles, the individual bodily limit is $50,000, but the aggregate amount goes up for more passengers.
There are different requirements for vehicles carrying materials. 
Learn more about Arkansas’ laws on passenger and freight transport
California laws vary the insurance requirement based on the number of passengers, weight of the vehicle, and types of materials being transported. 
Passengers:
Weight of the vehicle:
Materials being transported:
Learn more about California’s motor carrier regulations
Colorado laws determine limits based on the number of potential passengers, movers, towing carriers and property carriers.
When it comes to passengers:
For home or vehicle movers:
For nonhazardous material transport based on vehicle weight:
Learn more about Colorado motor vehicle laws
Connecticut laws are contingent on the vehicle’s seating capacity, whether or not property is carried intrastate, and whether or not the vehicle is used in livery. 
For transporting passengers in a non-livery capacity:
For livery transport: 
For property carriers within the state:
Learn more about Connecticut’s motor carrier regulations.
Delaware has requirements based on the type of passenger transport offered.
For Delaware passenger carriers:
Learn more about Delaware’s motor vehicle laws.
Washington, D.C., has different limits for taxicabs and carriers with various seating capacities.
Learn more about the District of Columbia’s laws.
In Florida, the law limits depend on whether it’s a passenger vehicle or a property transport vehicle. 
For Florida passenger vehicles:
For property carriers, contingent on vehicle weight:
Learn more about Florida’s financial responsibility law.
Georgia has limits depending on the seating capacity and carrier type. 
For limousine drivers: 
For intrastate motor carriers: 
Learn more about Georgia’s passenger carrier laws
Hawaii differentiates requirements based on whether the vehicle is a passenger vehicle or a transport vehicle. 
For passenger vehicles:
For other types of transport:
Learn more about Hawaii’s motor vehicle insurance information
Idaho has different limits based on the size of passenger vehicles, whether the vehicle is carrying materials or property, and hazardous material transport. 
For passenger vehicles:
For property carriers:
Learn more about Idaho’s motor vehicle laws.
Illinois breaks down its law to cover passenger carriers in one fashion while covering property carriers differently. 
For passenger vehicles:
For those who transport property:
Learn more about the Illinois vehicle code
Indiana’s limits depend on the size of the passenger vehicle and the type of freight carrier it is.
For passenger vehicles:
For other types of vehicles:
Learn more about Indiana’s fleet statutes
Iowa has different limits for passenger vehicles and freight carriers. 
For passenger vehicles:
Freight carrier rules are as follows: 
Learn more about Iowa’s motor carrier insurance law
Kansas requires the same of passenger vehicles as it does for property transporters.
Learn more about Kansas’ motor carrier regulations.
Kentucky separates passenger vehicles from the transport of goods. It further divides goods into general property, petroleum products and hazardous materials. 
For passenger vehicles:
For property and materials:
Learn more about Kentucky’s commercial vehicle law
Louisiana breaks down the requirements based on passenger buses, trucks and tow trucks. 
Learn more about Louisiana’s motor vehicle law.
Maine breaks down limits based on passenger vehicle seating capacity, interstate vehicles, property carriers and rentals.
For passenger vehicles:
For interstate passenger vehicles:
For property carriers:
For rental vehicles:
Learn more about Maine’s financial responsibility law
Maryland breaks down its limits for intrastate passenger vehicles, cabs and hazardous property transport.
For passenger vehicles:
For hazardous property transport:
Learn more about Maryland’s transportation laws.
Massachusetts has a combined single limit for passenger vehicles contingent on the vehicle’s seating capacity. 
Learn more about Massachusetts law
Michigan defines limits based on seating capacity and freight type. 
For passenger vehicles: 
For freight:
Learn more about Michigan’s motor bus law and its Limousine, Taxicab, and Transportation Network Company Act
Minnesota maintains regulations based on the number of passengers and substances carried. 
For passenger vehicles:
For property carriers:
Learn more about Minnesota’s Motor Carrier Financial Responsibility Law.
Mississippi looks at whether a vehicle is a passenger vehicle or freight vehicle and follows federal financial responsibility laws. 
For passenger carriers:
For freight carriers:
Learn more about Mississippi’s financial responsibility law.
Missouri considers whether passenger vehicles are interstate or intrastate and the type of property being transported.
For passenger vehicles:
For other commercial vehicles:
Learn more about Missouri’s transport and tow truck laws.
Montana considers the vehicle type and whether it carries passengers or cargo. 
For passenger vehicles:
For property carriers of nonhazardous materials: 
For tow trucks:
Learn more about Montana’s motor carrier insurance law.
Nebraska laws depend on the type of passenger vehicle and whether it’s carrying goods. 
For passenger vehicles:
For carriers of household goods:
Learn more about Nebraska’s motor carrier safety rules and regulations
Nevada even sets requirements for horse-drawn vehicles as well as different cargo carrier types. 
For passenger vehicles:
For property carriers:
Learn more about Nevada’s motor carrier laws
New Hampshire only specifies laws for passenger vehicles:
Learn more about New Hampshire’s motor vehicle laws.
New Jersey has rules for passenger vehicles and tow trucks. 
For passenger vehicles:
For tow trucks:
Learn more about New Jersey’s motor vehicle law
New Mexico breaks down regulations by passenger vehicles and cargo vehicles. 
For passenger vehicles: 
For cargo vehicles:
Learn more about New Mexico’s motor carrier rules
New York has different requirements for passenger vehicles and cargo vehicles. 
For passenger vehicles:
For contract cargo carriers:
Learn more about New York commercial vehicle requirements
North Carolina looks at passenger vehicles and property carriers differently. 
For passenger vehicles: 
For property carriers of household goods:
Learn more about North Carolina’s motor vehicle regulations
North Dakota differentiates between passenger vehicles, fleets and freight vehicles.
For passenger vehicles:
For freight vehicles:
Learn more about North Dakota’s carriage of persons law
Ohio follows the federal regulations for passenger vehicles and hazardous materials. 
For passenger vehicles:
For cargo carriers:
Learn more about Ohio’s motor carrier regulations
Oklahoma breaks down regulations based on passenger carrier size and the type of property transported. 
For passenger vehicles:
For property carriers:
Learn more about Oklahoma’s motor carrier and private carrier regulations
Oregon keeps the coverage for passenger carriers and cargo carriers simple.
Learn more about Oregon’s motor carrier liability laws
Pennsylvania differentiates passenger vehicles based on capacity and has a single requirement for property carriers. 
For passenger vehicles:
For property carriers: 
Learn more about Pennsylvania’s financial responsibility laws.
Rhode Island looks at the type of passenger carrier being insured and whether a property carrier is a public carrier.
Learn more about Rhode Island’s financial responsibility laws.
South Carolina has different rules for passenger vehicles depending on whether they are interstate or intrastate. It also breaks down freight carriers based on weight. 
For passenger carriers:
For property carriers:
Learn more about South Carolina’s financial responsibility laws
South Dakota follows the federal guidelines for passenger and freight vehicles. 
For passenger vehicles:
For freight carriers:
Learn more about South Dakota’s financial responsibility laws
Tennessee follows the federal guidelines for passengers and hazardous materials. 
For passenger vehicles: 
For property carriers:
Learn more about Tennessee’s financial responsibility laws
Texas looks at the seating capacity of passenger vehicles and whether property transports have hazardous materials. 
For passenger vehicles:
For property carriers: 
Learn more about Texas’ motor carrier insurance requirements
Utah follows federal guidelines for passenger vehicles but has its own rules for freight carriers. 
For passenger vehicles:
For freight carriers: 
Learn more about Utah’s requirements for motor carriers.
Vermont sets different rules for school buses and other passenger vehicles. 
For passenger vehicles: 
For school buses:
Learn more about Vermont’s financial responsibility laws
Virginia separates the requirements for taxicabs and passenger vehicles. It also has rules that separate intrastate from interstate cargo. 
For passenger vehicles:
For property carriers:
Learn more about Virginia’s insurance regulations
Washington breaks down insurance requirements based on how many passengers a vehicle can hold and whether it’s hauling household goods or hazardous materials. It also separates auto transportation companies. 
For passenger vehicles:
For trucks hauling goods:
Learn more about Washington’s motor carrier insurance regulations
West Virginia breaks down the rules between interstate and intrastate vehicles. 
For intrastate passenger vehicles:
For intrastate property carriers: 
For interstate passenger vehicles:
For interstate property carriers:
Learn more about West Virginia’s motor carrier rules
Wisconsin has various rules that break down vehicle types based on passengers and property. 
For passenger vehicles based on capacity:
For passenger vehicles for hire that aren’t school buses:
For exclusive intrastate passenger carriers:
For property carriers:
Learn more about Wisconsin’s motor carrier insurance regulations.
Wyoming sets standards as a combined single limit for bodily injury and property damage. 
Learn more about Wyoming’s financial responsibility requirements
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