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Choosing the right trucking insurance plan gives you the room to grow your trucking business, without worrying about adversities that might happen along the way.
In this article, I am introducing you to the basics of commercial trucking insurance plan, some limits, and mandatory obligations of a truck driver.
We are also looking into the nitty-gritty of (how to choose the right commercial trucking insurance plan?)
(a) Type of trucking insurance plan that is mandatory by FMCSA
(b) Type of insurance cover that helps truckers in business adversities
- Type of trucking insurance plan that is mandatory by FMCSA
- Types of trucking insurance plan coverage for owner operators:
- What are required to easily complete a commercial trucking insurance plans for your trucking operation?
- What insurance policies do I need when I become an owner operator?
- A cheap coverage is always not better than comprehensive coverage:
- Can I split my insurance policy?
- What’s the difference between the policy for a single-owner operator and a fleet owner?
Type of trucking insurance plan that is mandatory by FMCSA
- Mandatory requirement is to have liability insurance for the damage you can cause for a 3rd party. Limit is 750,000 dollars
- You need cargo insurance that's going to respond to $100,000
- Then you have add-on insurance which protects your truck or your truck driver.
- Make sure there is uninsured motorist coverage: Driver insurance helps to protect drivers from unforeseen accidents, issues and other problems. You can spend $400 to $500 per year to protect your driver or you. Find out truck insurance from OOIDA
Types of trucking insurance plan coverage for owner operators:
Truckers General Liability Coverage: This insurance covers actions of you/your driver when operating on someone else’s premises such as loading docks and truck stops and it also covers mistakes in the delivery of the load.
Primary Liability: It covers the damage you as owner-operator may do to others while operating the truck.
Physical Damage Coverage: It provides coverage for repairing or replacing your equipment if you are involved in an accident.
Non-Trucking Liability coverage: Covers damages and injuries to others when you are not under dispatch from the company you are currently leased on with.
Motor Truck Cargo coverage: This insurance covers your cargo whatever be the risk- stolen goods, wet load, refrigeration breakdown, debris removal. You need to have a cargo policy that is broad form and not for specific perils.
Trailer Interchange: Non-owned trailer used for load hauling is covered under trailer interchange agreement.
Medical Payment: This covers medical bills if you or a passenger is injured while driving or riding in the tractor (this coverage varies from state to state).
Uninsured/Underinsured Motorists: It covers you when someone collides with your truck and does not have the liability coverage to repair what you need to repair.
What are required to easily complete a commercial insurance plans for your trucking operation?
A driver who wants to be an independent owner operator needs to keep the below things in mind:
- Have experience of at least 2 yrs before venturing into owning a truck or being owner operator
- Keep your Motor Vehicles Record (MVR) clean. FMCSA or DOT has access to MVR, any violation, issue or accident will be noted and if your MVR is not clean, you will find it difficult to be an owner operator.
- Keep your credit history clean
- Get an accurate appraisal of what your truck and trailer are really worth
- Choose your insurance agent carefully
What insurance policies do I need when I become an owner operator?
- You need liability min is 750,000 maximum recommended by freight broker is 1,000,000.
- Cover your equipment, and look at the real price after depreciation. Don’t over-insure
- Have uninsured motorist coverage
- Make sure you cover your cargo well, for example: protect your electronic cargo with a $250,000 cover.
A cheap coverage is always not better than comprehensive coverage:
Cheaper insurance is not always cheaper, ill effect of having loss coverage is when you are involved in an accident you will have to take money to cover the damages from your savings.
Having a broad form of cargo coverage, some insurance companies cover only specific perils. If your cargo falls outside the specific peril list you may have to cover the cargo with your own money.
So take a broad form of cargo coverage, it covers you for any eventuality that might occur with your cargo.
Can I split my insurance policy?
Splitting insurance policies can save you a lot of money and get you the best coverage. This is a strategy insurance brokers often employ, to get maximum bang for their buck.
Agents take insurance from different insurers for cargo, liability, or uninsured motorists. This depends on the price, coverage, and reputation of the insurer.
We also need to make sure that the insurer has the adequate rating necessary to qualify with your broker. We are giving you the best insurer in the USA list for 2022.
For making working with brokers easier asks your broker to give you a list of the requirements they look for in an insurance plan. This can help you reduce costs, and improve efficiency in selecting an insurance plan.
What’s the difference between the policy for a single-owner operator and a fleet owner?
Some insurance companies look to be fleet owners of 3-5 trucks, 15 trucks, or 50 or more trucks.
Buy insurance from a company that has the legroom to accommodate your expansion plans.
Insurance companies don’t like sudden/unplanned expansion because rapid expansion creates rapid claims. Have a planned or step-by-step expansion insurance companies don’t mind that.
Other urgent requirements for an owner operator:
Firstly, there are a few operational adjustments an owner-operator should make while he or she is in the nascent stages of operation. Like enlisting a dispatcher to help you get good and well-paid loads.
Secondly, you need a good load board, with which you can book high paying and quality loads for your business.
Thirdly, we need to enlist a factor that has competitive rates and above-par service quality to make your business financial bottleneck-free. This will help you to have a good cash flow and working capital.
Saving money on fuel can make your bank account healthy. So use a Fuel card to get enormous savings on diesel.
For more information on Dispatch, Factoring, Insurance, Fuel card, etc click on the links on the line.
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It’s really helpful that you included what the requirements are for someone that wants to be an independent owner operator. I hope to manage to start my own trucking operation sometime in the near future so that part of the article was quite interesting to me. Unfortunately for me, I personally don’t have enough years worth of experience, so it seems I’ll have to wait a little more than a year before I enter the industry.
It’s good to know all the factors that will come into play when insuring your trucking company, that should help me compute for how much I may need to pay to avail the services of one. It’s great that if your company doesn’t claim much they can get lowered prices on premiums, that’s really helpful and reassuring. My husband is thinking of getting a trucking company of his own and I think it would be best to convince him to get insurance. I’m glad to hear there seem to be a lot of things that the insurance covers. I’m surprised that it even covers non-trucking liabilities even when you’re not on the clock. His main grievance with insurances was that they don’t cover enough, hopefully, the long list your provided is enough to convince him.
My dad is looking into doing business in the trucking industry since he would be retiring from his desk job soon. So now, he is looking into things he should consider such as commercial transportation insurance. Thanks for this comprehensive article which also gave tips about getting premiums from reputable companies that have the capacity to expand their coverage when your business expands its fleet as well.