CarInsurance.com Insights
- Every state requires commercial auto insurance for business-owned vehicles.
- Most states use split limits, meaning separate dollar caps for bodily injury per person, per accident and property damage, but the required amounts vary by state.
- Federal FMCSA rules apply if your vehicle crosses state lines, exceeds 10,001 lbs GVWR, or carries hazardous materials, and coverage requirements are much higher than the state minimums
- Twelve states operate under no-fault laws requiring PIP coverage on commercial policies, changing how injury claims are filed
- State minimums were established for personal vehicles, so a single serious accident in business use can exceed those limits and leave a business financially vulnerable.
Every state sets minimum insurance requirements for business vehicles, but those requirements aren’t as straightforward as they seem at first glance. Depending on your business, where you operate and the type of vehicle you use, you may be subject to state and federal regulations.
For most businesses, state-minimum auto insurance is just a starting point.
To protect your business, you may need significantly higher coverage limits. And, if your operation involves interstate travel, transporting hazardous materials or large vehicles, you may also be subject to Federal Motor Carrier Safety Administration (FMCSA) coverage minimums.
This guide outlines commercial auto insurance requirements by state, when federal rules apply, and how to determine whether you have adequate coverage.
What commercial auto insurance requirements mean for your business
Commercial auto insurance requirements are established by two entities: your state and the FMCSA.
State-minimum requirements apply to every business-owned vehicle, while FMCSA rules set separate requirements for vehicles that travel across state lines, carry hazardous cargo, or exceed a 10,001 gross vehicle weight rating (GVWR).
FMCSA requirements are layered on top of state minimums when your operation triggers federal oversight and regulations.
If your business solely operates within one state and uses standard cars, vans or pickup trucks, you likely only have to satisfy state requirements. If your operations fall under FMCA oversight, federal minimums apply.
However, minimum coverage is just the legal requirement, and may not provide enough protection.
Commercial auto insurance minimum requirements by state
Businesses that own vehicles must have commercial auto insurance coverage in every state.
Specific requirements vary by state, and several states updated their coverage requirements in 2025 and 2026. In the table below, see the rates and minimums in each state.
| State | Minimum Bodily Injury | Minimum Property Damage Liability | Uninsured/ Underinsured Motorist Required | Personal Injury Protection Required | Recent Updates |
|---|---|---|---|---|---|
| Alabama | $25,000/$50,000 | $25,000 | No | No | No |
| Alaska | $50,000/$100,000 | $25,000 | No | No | No |
| Arizona | $25,000$50,000 | $15,000 | No | No | No |
| Arkansas | $25,000$50,000 | $25,000 | No | No | No |
| California | $30,000/$60,000 | $15,000 | No | No | Updated limits in 2025 |
| Colorado | $25,000/$50,000 | $15,000 | No | No | No |
| Connecticut | $25,000/$50,000 | $25,000 | No | No | No |
| Delaware | $25,000/$50,000 | $10,000 | No | No | No |
| Florida | $10,000/$20,000 | $10,000 | No | $10,000 | No |
| Georgia | $25,000/$50,000 | $25,000 | No | No | No |
| Hawaii | $20,000/$40,000 | $10,000 | No | $10,000 | No |
| Idaho | $25,000/$50,000 | $15,000 | $25,000/$50,000 | No | No |
| Illinois | $25,000/$50,000 | $20,000 | $25,000/$50,000 | No | No |
| Indiana | $25,000/$50,000 | $25,000 | $25,000/$50,000 | No | No |
| Iowa | $20,000/$40,000 | $15,000 | No | No | No |
| Kansas | $25,000/$50,000 | $25,000 | $25,000/$50,000 | $4,500 | No |
| Kentucky | $25,000/$50,000 | $25,000 | No | $10,000 | No |
| Louisiana | $15,000/$30,000 | $25,000 | No | No | No |
| Maine | $50,000/$100,000 | $25,000 | $50,000/$100,000 | $2,000 | No |
| Maryland | $30,000/$60,000 | $15,000 | $30,000/$60,000 | No | No |
| Massachusetts | $25,000/$50,000 | $30,000 | No | $8,000 | No |
| Michigan | $50,000/$100,000 | $10,000 | No | Varies | No |
| Minnesota | $30,000/$60,000 | $10,000 | $30,000/$60,000 | $40,000 | No |
| Mississippi | $25,000/$50,000 | $25,000 | No | No | No |
| Missouri | $25,000/$50,000 | $25,000 | $25,000/$50,000 | No | No |
| Montana | $25,000/$50,000 | $20,000 | No | No | No |
| Nebraska | $25,000/$50,000 | $25,000 | $25,000/$50,000 | No | No |
| Nevada | $25,000/$50,000 | $20,000 | No | No | No |
| New Hampshire | $25,000/$50,000 | $25,000 | $25,000/$50,000 | No | No |
| New Jersey | $35,000/$70,000 | $25,000 | $35,000/$70,000 | $15,000 | Updated 2026 |
| New Mexico | $25,000/$50,000 | $10,000 | No | No | No |
| New York | $25,000/$50,000 | $10,000 | $25,000/$50,000 | $50,000 | No |
| North Carolina | $50,000/$100,000 | $50,000 | $50,000/$100,000 | No | Updated in 2025 |
| North Dakota | $25,000/$50,000 | $25,000 | $25,000/$50,000 | $30,000 | No |
| Ohio | $25,000/$50,000 | $25,000 | No | No | No |
| Oklahoma | $25,000/$50,000 | $25,000 | No | No | No |
| Oregon | $25,000/$50,000 | $20,000 | $25,000/$50,000 | $15,000 | No |
| Pennsylvania | $15,000/$30,000 | $5,000 | No | $5,000 | No |
| Rhode Island | $25,000/$50,000 | $25,000 | No | No | No |
| South Carolina | $25,000/$50,000 | $25,000 | $25,000/$50,000 | No | No |
| South Dakota | $25,000/$50,000 | $25,000 | $25,000/$50,000 | No | No |
| Tennessee | $25,000/$50,000 | $15,000 | No | No | No |
| Texas | $30,000/$60,000 | $25,000 | No | No | No |
| Utah | $30,000/$60,000 | $25,000 | No | $3,000 | Updated 2025 |
| Vermont | $25,000/$50,000 | $10,000 | $25,000/$50,000 | No | No |
| Virginia | $50,000/$100,000 | $25,000 | No | No | Updated 2025 |
| Washington | $25,000/$50,000 | $10,000 | No | No | No |
| West Virginia | $25,000/$50,000 | $25,000 | $25,000/$50,000 | No | No |
| Wisconsin | $25,000/$50,000 | $10,000 | No | No | No |
| Wyoming | $25,00/$50,000 | $20,000 | No | No | No |
Most states use slit cap limits, meaning there are separate coverage requirements for bodily injury liability per person, bodily injury liability per accident, and property damage.
Some states have a combined single limit (CSL) rather than a split limit, meaning a single limit applies to bodily injury and property damage.
When the FMCSA rules override your state minimums
Depending on your business operations, you may need to meet both FMCSA and state minimum coverage requirements.
FMCSA coverage minimums tend to be much higher, so you’ll need coverage in the hundreds of thousands to millions.
You have to consider FMCSA regulations if:
- Your vehicles travel across state lines
- You have vehicles that exceed 10,0001 pounds GVWR
- You transport hazardous materials
If you do any of those three things, you must have coverage that meets FMCSA requirements as outlined in the table below:
Motor Carrier of Property
| Entity Type | Vehicle Type | BIPD Insurance Requirement | Cargo Insurance Requirement | Surety Bond/Trust Fund Agreement |
|---|---|---|---|---|
| For-Hire Property Carriers (Non-Hazardous) | GVWR < 10,001 pounds | $300,000 | $0 | $0 |
| For-Hire Property Carriers (Non-Hazardous) | GVWR ≥ 10,001 pounds | $750,000 | $0 | $0 |
| For-Hire Carriers of Certain Hazardous Materials | N/A | $1,000,000 | $0 | $0 |
| For-Hire and Private Carriers of Explosives, Poison Gas, or Radioactive Materials | N/A | $5,000,000 | $0 | $0 |
| For-Hire Carriers of Household Goods | GVWR ≥ 10,001 pounds | $750,000 | $5,000 | $0 |
Motor Carriers of Passengers (49 CFR 387.303)
| Entity Type | Vehicle Type | BIPD Insurance Requirement | Cargo Insurance Requirement | Surety Bond/Trust Fund Agreement |
|---|---|---|---|---|
| For-Hire Carriers of Passengers | 15 or Fewer Passengers | $1,500,000 | $0 | $0 |
| For-Hire Carriers of Passengers | 16+ Passengers | $5,000,000 | $0 | $0 |
Brokers and Freight Forwarders (49 CFR 387.307)
| Entity Type | Vehicle Type | BIPD Insurance Requirement | BIPD Insurance Requirement | Surety Bond/Trust Fund Agreement |
|---|---|---|---|---|
| Freight Forwarders of Property | N/A | $0 | $0 | $75,000 |
| Freight Forwarders of Household Goods | N/A | $0 | $5,000 | $75,000 |
| Broker of Property and/or Household Goods | N/A | $0 | $0 | $75,000 |
Businesses operating under FMCSA regulations also must maintain an MCS-90 (Endorsement for Motor Carrier Policies of Insurance for Public Liability). This endorsement is required to show you meet the federal financial responsibility requirements.
You’ll also need a U.S. Department of Transportation number, a federal identifier, if you fall under FMCSA regulation.
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No-fault states and what they mean for your commercial policy
There are 12 no-fault states in which commercial auto policies must include personal injury protection (PIP). PIP coverage pays for the medical expenses of the driver and passengers after an accident, regardless of fault. This form of protection pays for medical expenses and lost wages.
| State | Commercial PIP |
|---|---|
| Florida | $10,000 |
| Hawaii | $10,000 |
| Kansas | $4,500 |
| Kentucky | $10,000 |
| Massachusetts | $8,000 |
| Michigan | Varies |
| Minnesota | $40,000 |
| New Jersey | $15,000 |
| New York | $50,000 |
| North Dakota | $30,000 |
| Pennsylvania | $5,000 |
| Utah | $3,000 |
These states don’t eliminate liability coverage requirements, but change who pays for the initial injury claims.
When state minimums fall short for your business
State-minimum commercial auto insurance ensures you’re legally compliant, but may not provide sufficient protection for your business. A serious accident can cause substantial medical expenses, property damage claims, legal fees and lost income that go well beyond the state-minimum coverage requirements.
“Small business owners should work with their insurance agent or broker and be prepared to answer the following: Who will be driving the vehicles? Do you own, rent or lease your vehicles? Are you and your employees likely to be driving their own vehicles for business purposes? The answers to these questions will help determine the types of coverage your business needs,” said Mark Friedlander, senior director of media relations for the Insurance Information Institute (Triple-I). “In general, only a commercial auto policy can provide the level of liability protection a business needs. In today’s litigious society, where business owners need adequate financial protection against the escalating impacts of legal system abuse, insurance professionals typically recommend their customers purchase commercial auto liability limits that generally range from $500,000 to $1 million in combined single limits (CSL).”
Most states’ coverage requirements were established for personal vehicles and have been unchanged for years. Businesses and commercial vehicles tend to have higher liabilities because they spend more time on the road and may operate more expensive vehicles and carry more valuable cargo.
For example:
- Delivery businesses: If you and your drivers make many deliveries per day, you spend more time on the road and are more at risk of accidents, so you may need higher coverage limits.
- Contractors and landscapers: Heavy equipment, trailers and tools are additional risks.
- Passenger transport: Carrying customers, such as a limousine business, creates additional liability concerns.
- Pavers: Heavy equipment is expensive and can cause significantly more damage in an accident.
Sophie’s Tip
Think about your exposure, not just the limit. A 25/50/25 policy pays a maximum of $50,000 for all injuries in one accident. If your vehicle injures two people who each need surgery and extended recovery, that limit is gone before the property damage claim is filed. Most commercial insurance advisors recommend starting at $500,000 in liability for any vehicle in regular business use – and working up from there based on your industry and fleet size.
How your vehicle’s weight and business type affect your requirements
Your required coverage depends on your vehicles’ GVWRs and how you use them. A pickup truck you use for local client visits may only need a basic commercial auto policy that meets your state’s minimum requirements, while a larger vehicle that transports cargo to other states will need to meet FMCSA requirements.
Here’s a quick guide:
Vehicle Type | Vehicle Examples | Coverage Requirements |
|---|---|---|
| Light commercial vehicles (under 10,001 GVWR) | Sedans, SUVs, cargo vans, pickup trucks | If you operate solely within your state, you must meet the state minimum coverage requirements. If you travel across state lines, you must meet FMCSA requirements |
| Medium-duty vehicles (10,001 to 26,000 GVWR) | Box trucks and larger delivery vehicles | A vehicle over 10,0001 typically must meet FMCSA requirements |
| Heavy commercial vehicles (Over 26,000 GVWR) | Heavy trucks | Heavy trucks must meet federal insurance requirements |
| Passenger carriers | Limousines, buses, shuttles | Passenger vehicles must meet FMCSA requirements |
| Hazardous material transport | Trucks | Vehicles must meet FMCSA requirements |
Hired and non-owned auto — the gap state law doesn’t cover
State commercial auto policies apply to vehicles that your business owns. If you have employees who use their own vehicles for work or you occasionally rent vehicles for business purposes, your commercial auto policy doesn’t apply. A hired and non-owned auto (HNOA) can help fill the gap.
These policies cover employees driving their personal vehicles or rented vehicles, providing essential protection.
How to confirm your commercial coverage meets requirements
Confirming compliance with commercial auto insurance requirements goes beyond reviewing the state-minimum coverage. You should also review whether your business’s operations and vehicles are subject to FMCSA regulations, and whether your policy adequately protects your business’s risk exposure.
There are three steps in determining whether you have the right commercial auto coverage:
- Identify your vehicle use: List your vehicles, whether employees use their personal cars, and how you use your vehicles. From this exercise, you may find you need HNOA or FMCSA coverage.
- Review state requirements: Your state’s minimum coverage is likely barebones, so you may need additional protection.
- Think about risk: Consider the cost of repairing or replacing your vehicles, and how expensive a single accident resulting in injuries or damage could be. If an accident would financially damage your business, you likely need higher coverage limits. Consult with an insurance professional to decide how much insurance you really need.
Frequently Asked Questions: Commercial auto insurance
Is commercial auto insurance required in all 50 states?
Yes, every state requires businesses that own vehicles to maintain commercial auto insurance policies that satisfy the state’s financial responsibility requirements.
What is a split limit in commercial auto insurance?
A split limit divides liability coverage into three sections: bodily injury liability per person, bodily injury liability per accident, and property damage per accident.
When do FMCSA rules apply instead of my state minimums?
FMCSA rules apply if you travel across state lines, transport hazardous materials, or have a vehicle that exceeds 10,001 GVWR.
What states require PIP on commercial auto policies?
PIP is required in 12 states: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, Pennsylvania and Utah.
Does my commercial policy cover employees driving personal vehicles for work?
No, commercial policies don’t cover employees who drive their own vehicles. You need to purchase HNOA coverage to get added protection.
What happens if my business does not meet state commercial auto minimums?
Penalties vary by state, but companies that fail to meet state commercial auto insurance requirements can face fines, registration suspensions, vehicle impoundment, and loss of operating privileges.
Are state minimums enough for my small business?
For most businesses, the state minimum coverage requirement is inadequate. It satisfies the legal requirement for insurance, but as a business owner, you face greater liability risk if there’s an accident, and you likely need additional insurance.
What is an MCS-90 endorsement?
An MCS-90 endorsement is a federally required form that verifies you meet the FMCSA’s financial responsibility requirements.
Resources & Methodology
Sources
- FMCSA. “Insurance Filing Requirements.” Accessed June 2026.
- FMCSA. “Form MCS-90 – Endorsement for Motor Carrier Policies of Insurance for Public Liability under Sections 29 and 30 of the Motor Carrier Act of 1980.” Accessed June 2026.
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