So your home remodeling business is growing, and you're finally ready to buy that first work truck. Congratulations—this is a huge milestone. But before you drive it off the lot loaded with tile and power tools, let's talk about something that catches a lot of new contractors off guard: your personal auto insurance policy isn't going to cut it anymore.
The moment you start using a vehicle for business purposes—hauling materials, driving to job sites, transporting equipment—you're operating in commercial territory. And if something goes wrong during a work-related trip, your personal policy will almost certainly deny your claim. Here's what you need to know about making the switch to commercial auto insurance.
Why Personal Auto Insurance Doesn't Cover Business Use
Personal auto insurance policies are written with a very specific exclusion: they don't cover business activities. Sure, they'll cover your commute to and from work. But the second you load up supplies, make a detour to pick up materials, or drive from one job site to another? That's business use, and your personal policy explicitly excludes it.
Think about it from the insurance company's perspective. Business use means more miles driven, heavier loads, more frequent stops, and higher risk overall. Your personal policy was priced for grocery runs and weekend trips—not for a contractor hauling a load of lumber through rush hour traffic three times a day. The risk profile is completely different.
If you get into an accident while using your vehicle for work and you only have personal coverage, your insurer can—and likely will—deny your claim entirely. That means you're personally on the hook for property damage, medical bills, legal fees, and repairs to your own vehicle. For a serious accident, that could easily run into six figures.
What Commercial Auto Insurance Covers for Contractors
Liability coverage is the foundation. This pays for bodily injury and property damage if you're at fault in an accident. Industry standard for contractors is typically $1 million combined single limit—meaning up to $1 million total per accident for both injuries and property damage. Many general contractors and clients will require you to carry at least this much coverage before you can work on their projects.
Physical damage coverage protects your actual vehicle. This includes collision coverage (for accidents with other vehicles or objects) and comprehensive coverage (for theft, vandalism, fire, or weather damage). When your truck is loaded with thousands of dollars worth of tools and materials, this protection becomes essential. Note that some insurers, like Farmers, offer special endorsements to cover the expensive tools and equipment you transport—something worth asking about when shopping for quotes.
Medical payments coverage handles medical expenses for you and your passengers after an accident, regardless of who's at fault. Uninsured and underinsured motorist coverage protects you if you're hit by someone who doesn't have adequate insurance. Both are relatively inexpensive add-ons that can save you significant out-of-pocket costs.
The Hired and Non-Owned Auto Coverage You Might Not Know You Need
Here's where things get interesting. Even if you only own one company truck, you might still need what's called hired and non-owned auto insurance—often abbreviated as HNOA. This coverage protects your business when employees use their personal vehicles for work tasks.
Let's say you send an employee to pick up paint samples in their own car. On the way, they rear-end someone at a stoplight. The injured driver's medical bills hit $80,000. Your employee's personal auto policy covers the first $50,000, but who pays the remaining $30,000? Without hired and non-owned coverage, your business could be on the hook.
HNOA coverage provides excess liability protection over your employees' personal policies when they're driving for business purposes. It also covers rental vehicles and borrowed vehicles. The coverage applies to all types of employees—full-time, part-time, temporary, even volunteers. And here's the key thing: it's liability-only coverage. It won't fix the employee's car or cover their injuries, but it protects your business from liability claims.
Most small businesses add HNOA as an endorsement to their general liability or commercial auto policy. It's inexpensive—usually just a few hundred dollars a year—and can prevent financial disaster. If you have even one employee who occasionally runs work-related errands in their personal vehicle, this coverage is worth considering.
How Much Commercial Auto Insurance Costs
For home remodeling contractors in 2026, commercial auto insurance typically runs between $147 and $162 per month—that's roughly $1,760 to $1,940 annually. However, your actual cost will depend on several factors that insurance companies use to assess risk.
The type and value of your vehicle matters significantly. A basic work van will cost less to insure than a heavy-duty truck. How you use the vehicle affects pricing too—if you're mainly doing local residential jobs within a 50-mile radius, that's lower risk than hauling materials across state lines. Your driving record and the driving records of anyone else who'll be behind the wheel play a major role. A clean record with no accidents or violations will get you the best rates.
Coverage limits and deductibles are adjustable. Higher liability limits or lower deductibles mean higher premiums. Endorsements like tool and equipment coverage or hired and non-owned auto insurance will add to your cost. And your location matters—insurance in urban areas with higher accident rates and theft typically costs more than rural coverage.
The good news? Commercial auto insurance covers both business and personal use. Once you have a commercial policy, you can drop your personal auto coverage for that vehicle. You're not paying for two policies—you're paying for one policy with appropriate coverage for how you actually use the truck.
Getting Your First Commercial Auto Policy
Before you start shopping, gather some basic information. You'll need your vehicle identification number (VIN), the purchase price or current value, and details about how you'll use the vehicle. Know the annual mileage estimate, the radius you typically operate within, and what you'll be hauling. Have the names and driving records of anyone who'll drive the vehicle.
Get quotes from multiple insurers. Companies like Progressive, GEICO, The Hartford, Farmers, and Travelers all offer commercial auto insurance for contractors, and rates can vary significantly. Ask each insurer about discounts—you might qualify for multi-policy discounts if you bundle with your general liability or business owner's policy, safety equipment discounts, or claims-free discounts.
When comparing quotes, don't just look at price. Check what's actually covered. Does the policy include tool and equipment coverage? What are the liability limits? Is roadside assistance included? What's the deductible? A slightly more expensive policy with better coverage could save you thousands if you ever need to file a claim.
Most importantly, don't wait until after you buy the vehicle to get insurance. Contact insurers before you make the purchase so coverage can be in place the moment you take ownership. Many lenders require proof of insurance before they'll finalize an auto loan. And you definitely don't want to be sitting at the dealership, keys in hand, scrambling to get coverage.
Buying your first business vehicle is an exciting step for your home remodeling company. Just make sure you're properly protected from day one. The cost of commercial auto insurance is manageable—especially compared to the financial devastation of a major accident without coverage. Take the time to understand your options, shop around for the best policy, and drive with confidence knowing your business is protected.
