How to Get Affordable High Risk Commercial Auto Insurance in California

If you own a business in California that uses vans, trucks, or other vehicles, you probably need high risk commercial auto insurance. When a driver or vehicle is considered “high risk,” rates can feel overwhelming. But in California, there are laws and practical steps that help businesses manage costs while staying legal and protected.

Why This Matters to Californians

California is a huge state with busy roads, long urban traffic, and major freight operations. Businesses rely on vehicles for deliveries, services, and transport—especially in cities like Los Angeles and San Francisco. Higher accident rates and rising claim costs make proper coverage vital to avoid major financial loss.

Businesses whose drivers have past tickets, accidents, commercial violations, or lapsed insurance—but still need to operate—fall into the “high risk” category. Without affordable options, they may lose work or face penalties. This article teaches how to meet legal requirements, reduce costs, and keep essential coverage in place.

California Law on Commercial Auto Insurance

Minimum liability coverage

• As of January 1, 2025, California raised its minimum liability limits for all vehicles, including commercial use, to:
  
  • $30,000 for injury or death to one person,
    
  • $60,000 per accident for multiple injuries,
    
  • $15,000 for property damage
    (often called 30/60/15).
    
• Before 2025, these minimums were just 15/30/5, set in 1967. The increase aims to reflect rising medical and repair costs, and to better protect accident victims.
  

Additional high‑risk or federal requirements

• Certain commercial vehicles—such as those carrying non‑hazardous cargo—must carry at least $750,000 in liability according to federal and state rules.
  
• Trucks carrying hazardous materials may need as much as $5 million in coverage.
  
• Commercial vehicles operating across state lines must meet Federal Motor Carrier Safety Administration (FMCSA) insurance limits, often ranging from $750,000 to $5 million, depending on cargo type.
  
• California requires commercial vehicle operators to show proof of financial responsibility and carry a Motor Carrier Permit (MCP), filing evidence of insurance with DMV.
  

Proposition 103 regulation

• Passed in 1988, Proposition 103 gives the California Department of Insurance (CDI) strong authority to regulate underwriting, issue rates, and discipline insurers.
  
• CDI review of rate hikes is mandatory. That means insurers must justify increases, and CDI may reject or reduce them.
  

What Drives High-risk Commercial Auto Insurance Costs?

Several key factors raise insurance premiums for high‑risk commercial drivers:

• Claims history, violations, or accidents on driving records raise risk.
  
• Medical costs and vehicle repair bills have steadily risen; one report estimates repair cost inflation hitting nearly 20% in one year alone.
  
• Wildfire-related insurance instability has disrupted insurer capacity, increasing costs in broader insurance markets.
  

Insurers make decisions based on each vehicle’s use, driver history, location (urban traffic tends to raise risk), safety equipment, and prior claims.

Tips to Keep High-risk Commercial Auto Insurance Affordable

1. Shop around and compare insurers

Different insurers assess risk differently and offer distinct high-risk products. Firms like Mercury or USAA (if eligible), and specialized carriers sometimes offer better rates for higher-risk commercial drivers.

Even within California, quotes vary drastically—so get multiple referrals or use brokers.

2. Bundle with other business policies

Combining commercial auto coverage with workers’ compensation, general liability, or business property in a single package can unlock discounts and simplify paperwork.

3. Raise deductibles carefully

If your operation can absorb some small damages, higher deductibles can lower premiums. But be careful not to expose yourself to uninsured losses that may exceed your budget.

4. Improve driver safety and records over time

• Conduct regular driver training and enforce policies on seat‑belt use, speed, and rest.
  
• Use GPS or telematics to encourage safe driving.
  
• A safer record gradually decreases risk classification, letting premiums fall.
  

5. Maintain continuous insurance

Gaps in coverage are seen as high risk. Even a lapse of a few months can trigger steep rate hikes once you re‑apply.

6. Consider a Risk Retention Group (RRG) for your industry

Some businesses can join or form risk-retention groups—a form of self‑insurance under federal law—that may offer lower cost coverage if traditional insurers charge too much. RRGs face less regulation in California but must comply with federal Risk Retention Group rules.

7. Leverage Proposition 103 protections

If insurers ask for emergency rate increases, California’s Department of Insurance reviews and can deny poor filings. You can ask your agent to submit a challenge under CDI rules if rate increases feel unfair.

Example Case Study

A small delivery business in Los Angeles had a driver with a previous at-fault accident three years ago. Initial quotes ranged around $250/month for commercial van liability of 30/60/15, but coverage was minimal. They needed at least $750,000 liability for interstate work.

By switching to a specialist broker, bundling with general liability, raising their deductible modestly, and installing telematics, they brought the premium down to about $180/month per vehicle—while upgrading to a $750 K combined single limit policy. After one year with no claims and clean driving logs, eligible discounts further lowered the rate by about 10%.

Why This is Worth Knowing for California Businesses

• The new 30/60/15 liability minimums are higher than before, so insurers must adjust rates—but that’s intended to offer better protection for others after a crash.
  
• California’s strict rules, especially under Proposition 103, give you rights: insurers must fully justify rate increases.
  
• Ensuring your business meets both state and federal requirements avoids fines, impounded vehicles, and risks of uninsured liability.
  

Key steps summary

1. Check current legal requirements—liable coverage, MCP filing, documentation.
   
2. Compare multiple carriers, especially for high-risk policies.
   
3. Bundle coverages and choose deductibles wisely.
   
4. Review driver safety and use telematics to build a better record.
   
5. Avoid coverage lapses—renew and maintain policies without gaps.
   
6. Explore alternative options like risk retention groups.
   
7. Use California’s rate regulation to contest unfair pricing under Proposition 103.
   

Final Thoughts

Finding affordable high risk commercial auto insurance in California isn’t always easy, but it’s possible. By understanding both state laws and federal rules, comparing options, improving safety, and leveraging regulatory protections, business owners can meet legal requirements and still find costs that make sense. Over time, safer records and smarter choices often lead to better premiums—creating more stability for your business and peace of mind for your drivers and those they serve.