Understanding California Commercial Auto Insurance Requirements

State‑Specific Liability Minimums

California requires every commercial vehicle to carry at least $750,000 in combined liability coverage for bodily injury and property damage. This is higher than the $300,000 minimum for personal auto policies and reflects the state's emphasis on protecting third parties in business‑related accidents.

Mandatory Coverage Types

Beyond liability, the state mandates uninsured/underinsured motorist (UM/UIM) coverage at the same $750,000 limit. Employers must also maintain workers' compensation if employees drive the vehicles, though this is a separate statutory requirement.

Optional but Often Required Policies

Most California businesses add physical‑damage coverage—collision and comprehensive—to protect against repair costs, theft, or vandalism. Hired‑and‑leased‑non‑owned (HENNO) coverage is advisable when employees use personal cars for work duties, as the employer's policy may not extend to those vehicles.

Key Factors Influencing Premiums

Insurers evaluate vehicle type, usage patterns, driver records, and mileage. A fleet of delivery vans will be priced differently from a handful of service trucks. Safety programs, telematics, and a clean claims history can lower rates.

Compliance Checklist

• Verify $750,000 combined liability limit on the policy.
• Confirm UM/UIM coverage matches liability limits.
• Ensure workers' compensation is in place for driver employees.
• Assess need for physical‑damage and HENNO coverage.
• Maintain up‑to‑date driver safety training and records.

Comparison of Common Coverage Options