Here's a scenario that plays out every day: an HVAC contractor loads up their pickup truck with compressors, refrigerant tanks, and tools, drives to a job site, and assumes their personal auto policy has them covered. Then an accident happens. The insurance company denies the claim, citing business use exclusions. Suddenly, that contractor is personally on the hook for tens of thousands—or even hundreds of thousands—in damages.
If you're running an HVAC business, your vehicle isn't just transportation—it's a mobile warehouse, workshop, and office. That means you need commercial auto insurance specifically designed for how you actually use your vehicles. Let's break down exactly what you need to know.
Why Your Personal Auto Policy Won't Cut It
Personal auto policies are built for commuting, errands, and road trips—not for running a business. While most personal policies technically cover some business use, they come with major exclusions that HVAC contractors run into constantly.
The big one: if you're regularly hauling tools, equipment, and materials as a core part of your work, you're outside the protection of a personal policy. Insurance companies consider service trades like HVAC, plumbing, and electrical work to be activities that require commercial coverage because your vehicle is essential to doing business—not just getting you there.
Even if you think you're covered under a personal policy because you occasionally pick up supplies, the reality is different. A building contractor who picks up materials and delivers them to job sites might squeeze by with personal coverage. But when you're an HVAC contractor with a van full of equipment making multiple service calls daily? That's squarely in commercial territory. If you file a claim and the insurer discovers you've been using your vehicle this way, they can deny it entirely—leaving you exposed to lawsuits, property damage bills, and medical costs.
What Commercial Auto Insurance Actually Covers
Commercial auto insurance is built for the vehicles you actually use in your HVAC business: cargo vans, box trucks, pickup trucks, and trailers. The policy covers you when those vehicles are damaged in accidents, stolen, or vandalized. It also protects you from liability claims if you cause an accident that injures someone or damages their property.
Here's what a standard commercial auto policy includes: liability coverage (this pays for damage or injuries you cause to others), collision coverage (repairs your vehicle after an accident), comprehensive coverage (protects against theft, vandalism, weather damage, and other non-collision events), and medical payments coverage (covers medical bills for you and your passengers regardless of fault). Some policies also cover the equipment you're hauling, though you may need to add an inland marine or tools and equipment endorsement for full protection.
For most HVAC contractors, the average policy limit is around $1,000,000 in liability coverage. That might sound like a lot, but in a serious accident involving injuries, it can disappear fast. That's why many contractors also purchase umbrella insurance, which adds another layer of liability protection on top of your commercial auto policy. If you have $1,000,000 in commercial auto coverage and buy a $2,000,000 umbrella policy, you now have $3,000,000 in total protection. Given how expensive medical bills and lawsuits can be, that extra cushion is worth considering.
Hired and Non-Owned Auto Coverage: The Coverage You Didn't Know You Needed
Let's say you don't own a company vehicle yet, or maybe your employee drives their own car to a service call. Or you rent a truck for a big installation job. Who's liable if there's an accident? That's where hired and non-owned auto insurance comes in.
This coverage has two parts. Hired auto insurance covers vehicles you rent or lease for business purposes. Non-owned auto insurance covers vehicles your employees own but use for your business—like when a technician drives their personal truck to pick up parts or meet you at a job site. Without this coverage, your business could be held liable for damages in an accident, even though you don't own the vehicle involved.
Here's how it works: if your employee causes an accident while running a work errand in their personal car, their personal auto insurance pays first. But if the damages exceed their policy limits—say they have $100,000 in coverage but the claim is $250,000—your hired and non-owned policy kicks in to cover the gap. This protects your business from being dragged into a lawsuit that could cost you everything.
The best part? Hired and non-owned coverage is cheap. For most small HVAC businesses with fewer than 20 employees, it typically costs only a few hundred dollars a year. You can usually add it as an endorsement to your general liability or commercial auto policy, which saves even more money. Given the financial risk it eliminates, it's one of the easiest insurance decisions you'll make.
One thing to know: hired and non-owned coverage is liability-only. It covers damage and injuries you cause to others, but it won't repair your rented truck or your employee's personal car if it gets damaged. It also doesn't cover injuries to you or your staff. For that, you'd need the physical damage coverage in a commercial auto policy or rely on your employee's personal collision coverage.
What It Costs and What Affects Your Rate
HVAC installers pay an average of $191 per month—about $2,292 per year—for commercial auto insurance. But that's just an average. Your actual cost depends on a bunch of factors: how many vehicles you're insuring, what kind of vehicles they are, their value, your coverage limits, your driving record, your employees' driving records, where you operate, and your claims history.
A solo HVAC tech with one older pickup truck and a clean driving record will pay far less than a contractor running five newer cargo vans with multiple employees. Higher liability limits also increase your premium, but the extra protection is usually worth the cost—especially in an industry where you're on the road constantly and carrying expensive equipment.
If you want to keep your costs down, focus on maintaining clean driving records for yourself and your team, consider higher deductibles if you can afford the out-of-pocket expense in a claim, and bundle your commercial auto with other business policies like general liability or a business owner's policy (BOP). Many insurers offer discounts when you package multiple coverages together.
Legal and Licensing Requirements You Can't Ignore
Beyond protecting yourself financially, commercial auto insurance is often a legal requirement. Many states require proof of commercial auto coverage before they'll issue or renew your HVAC contractor license, especially if you have employees. Even if your state doesn't mandate it for licensing, the contracts you sign with commercial clients almost always will. Property managers, general contractors, and building owners typically require you to carry minimum liability limits—often $1,000,000 or more—and they'll ask for proof of insurance before you start work.
Failing to carry the right coverage can cost you contracts, delay projects, and even put your license at risk. It's not worth cutting corners on this—especially when the cost is relatively affordable and the consequences of going without are so severe.
How to Get the Right Coverage for Your HVAC Business
Getting commercial auto insurance isn't complicated, but you want to make sure you're getting the right coverage for your specific situation. Start by making a list of all the vehicles you use for business—owned, leased, or regularly borrowed. Include the make, model, year, and value of each. Then think about how you use them: Are you hauling equipment daily? Do employees drive their own vehicles for work? Do you ever rent trucks or vans?
Next, talk to an insurance agent who specializes in contractor coverage. They'll help you figure out the right liability limits, whether you need hired and non-owned coverage, and if you should add an umbrella policy. Don't just go with the cheapest quote—make sure you're comparing apples to apples in terms of coverage limits, deductibles, and exclusions.
Finally, review your policy at least once a year. As your business grows—adding vehicles, hiring employees, taking on bigger projects—your insurance needs will change. Keeping your coverage up to date ensures you're always protected, no matter what comes your way on the road.
