3 Reasons Why You Need Commercial Truck Insurance Right Now

TLTR: Commercial truck insurance is essential for your trucking business. Read on and discover the three major reasons why. We’ll also discuss what it covers, what it doesn’t, and how much it will cost you.

How do you make a million dollars in the trucking business without insurance? You start with two million.  

Keep Truckin says that starting a new truck company with one truck alone could set you back by up to $175,000. Add to that the cost of employing drivers, maintenance fees, adding more trucks to your fleet, and miscellaneous expenses… you’re looking at hundreds of thousands of dollars as an investment. One legal battle could end your dreams of becoming America’s biggest fleet owner-operator.  

Getting commercial truck insurance at the right time can keep your fleeting dream alive.

In this blog

Who Needs Commercial Truck
Insurance Coverage?

All commercial truck owner-operators need truck insurance. There are several types of trucks available, which means that several different types of insurance exist to cover them. The different types of commercial truck insurance include: 

  • Semi-Truck Insurance 
  • Box Truck Insurance 
  • Dump Truck Insurance 
  • Tow Truck Insurance 
  • Flatbed Truck Insurance

Three Reasons to Get Commercial
Truck Insurance

If you’re a trucking business owner, then that’s the number one reason why you need commercial truck insurance. However, let’s look at the three other equally important reasons you need proper coverage before your fleet hits the road. 

The Trucking Business is a Big Deal

According to American Trucking Associations, commercial trucks move around 72% of the nation’s total freight by weight every year. Statista claims that the number of registered trucks in the country has also increased by around 81% in the last decade. With so much of the country’s finances relying on cargo transport, it’s your duty as a trucking business owner to secure your fleet, cargo, and drivers. 

Heavy Cargo Trucks Get into a Lot of Accidents

Although one of the largest industries to increase national revenue, the trucking business causes many casualties on the road. Without proper insurance to shield you from financial losses due to road fatalities, cargo damage, and theft, your business could be heading towards early bankruptcy. 

The Insurance Institute for Highway Safety (IIHS) reports that 11% of motor accident deaths in the U.S. are caused by large trucks crashing into other vehicles and humans on highways, roads, and streets. 

Here’s a list of other common risks for commercial trucks: 

  • Truck driver fatigue 
  • Traffic flow 
  • Cargo theft, vandalism, and damage 
  • Natural causes (windstorm, rain, hailstorm) 

    Insurance companies understand the importance that trucking businesses pose in our national finances. Therefore, commercial truck insurance is specially tailored to meet the safety needs of truck owners and operators.

    Commercial Truck Insurance is Mandatory

    The Federal Motor Carrier Safety Administration (FMCSA) won’t let your commercial fleet operate without adequate insurance. The FMCSA assigns a specific Department of Transportation (DOT) number to registered commercial vehicles. However, if you fail to show proof of insurance, they won’t assign you your DOT number, thereby restricting you from performing any commercial activities. 

    Why Isn’t Commercial Auto Insurance Enough for My Trucking Business?

    An average truck transports tons of cargo and covers more miles than an average commercial vehicle. Therefore, a truck insurance policy needs more coverage than commercial auto insurance. Important coverage such as bobtail insurance isn’t included in a standard commercial auto insurance policy, either. 

    Moreover, your clients and shippers will undoubtedly ask for proof of insurance before doing any business with you. Moving cargo is expensive, and without proper insurance on the fleet, the clients wouldn’t have trust in your company.  

    Commercial vehicle insurance can protect your business auto while you’re commuting to work, but it can’t cover reefer breakdowns, cargo loss, and other perils.

    What Does Commercial Truck
    Insurance Cover?

    Commercial truck insurance covers these specific safety needs of the truck businesses:

    General Liability Insurance for Commercial Truck Businesses

    General liability insurance provides coverage for claims arising from normal business operations, such as property damage, medical bills, or injuries (if one of your trucks gets into an accident). Liability insurance will also compensate your legal defense costs, regardless of who’s at fault. 

    Workers Compensation Insurance

    Almost all states mandate workers compensation insurance. It reimburses your workers for lost income, medical costs, rehabilitation expenses, and so on. A single driver transports a significant amount of shipment, so every driver’s well-being is in the best interest of the business. 

    Commercial Umbrella Insurance for a Commercial Truck

    Commercial umbrella insurance reimburses you when your current insurance policy is not enough to cover losses. Imagine your truck crashes into an office building. Your workers’ compensation policy covers your driver’s injuries, but your commercial liability policy is insufficient to handle the cost of the claim against you for property damage. But umbrella insurance can step in to help cover the remaining costs. 

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    Standard Endorsements

    Motor Truck Cargo Insurance

    Motor truck cargo insurance protects the shipment that your truck carries. So, if your cargo is lost or damaged from collision or fire, you will be compensated fully for the vehicle and the contents inside. 

    Physical Damage

    • Collision: Pays for damages arising from accidents. 
    • Comprehensive: Indemnifies liabilities other than collision. 

    Uninsured/Underinsured Motorists

    Uninsured/underinsured motorists coverage reimburses your repair costs and medical bills if you get in an accident with an uninsured driver. There may be instances when an underinsured driver hits one of your trucks and does not have enough insurance to cover your bills. In this case, underinsured motorist coverage can help you cover the rest of the bill. 

    Hazmat Coverage Insurance for a Commercial Truck

    Trucking companies sometimes ship hazardous materials for business. Suppose a truck transporting hazmat gets in an accident. Standard auto insurance will step in to pay for property damage and bodily injury. However, it won’t pay for the damage incurred by the hazardous materials. Hazmat coverage is valuable for companies that frequently ship hazardous materials. 

    Livestock Hauling Insurance

    Trucking jobs can sometimes involve transporting livestock. This livestock endorsement covers risks that may inflict harm on the livestock when transporting them. If you’re moving with a flock of sheep and some of them run away or die due to heat exhaustion, livestock hauling insurance can cover you. 

    Trailer Interchange Policy Under Commercial Truck Insurance

    There may be instances where you have to tow another truck’s trailer. Your standard coverage won’t protect the other truck’s goods in such cases. A trailer interchange policy will help you protect the trailer in case it gets damaged while in your possession. 

    Limited Depreciation Policy

    A limited depreciation policy helps cover the cost of replacing your vehicle if it is declared a total loss after a collision. 

     

    Non-Trucking Insurance Coverage for Commercial Trucks

    Standard commercial truck insurance protects you during business hours, but what about off-hours? Thankfully, a non-trucking insurance policy can shield drivers who use their trucks for non-work purposes. That way, drivers and their trucks are covered 24/7. 

    Rental Reimbursement

    Suppose your truck is totaled in an accident. You and your client are left with an undelivered shipment. A rental reimbursement policy can cover truck rental costs in such situations. It can also prevent your logistics from being hampered. 

    Bobtail Insurance for Commercial Truck Businesses

    Trucks cabs are driven without trailers every once in a while. A bobtail insurance policy provides coverage for tractors or trucks moving without trailers. 

    Owner-Operator Insurance

    Owner-operators of commercial trucks need special insurance coverage. Whether the operator is using a leased vehicle or one they own makes a difference in the kind of truck insurance they should have.  

    When an owner-operator leases a truck from a trucking company, the vehicle is covered under the company’s truck insurance. This insurance will cover third-party liabilities and damage to the truck or property when the truck and the driver are at fault. If any other casualties were to occur, the operator would be paying for them with their own insurance or out of pocket.  

    When an owner-operator runs their own commercial truck, FMCSA requires them to purchase auto liability coverage with a limit of $750,000. Consider also buying general liability and physical damage coverage along with basic requirements. 

    What Is Not Covered by Commercial
    Truck Insurance?

    Commercial truck insurance is, as the name suggests, for commercial trucks. It’s not meant to protect any personal items of the owner or operator. Here’s a list of standard exclusions of commercial truck insurance: 

    Intentional Damage

    Any property damage or bodily injury inflicted on self or third parties on purpose will not be covered by truck insurance. For instance, you’re traveling with cargo for your clients from California to Ohio. When you reach your destination, your client delays the payment. In a fit of anger, you destroy their cargo. If you try to file a claim, you will be denied. 

    Racing

    Running a race on the highway well over the speed limit is asking for trouble. If you happen to collide with an oncoming vehicle, your insurance provider will not agree to pay for the damage. 

    Certain Natural Disasters

    Unless you have specific coverage against floods and earthquakes, your standard commercial truck insurance won’t cover any damage to your fleet or the cargo.  

    How Much Is Truck Insurance? 

    The cost of your truck depends on many factors. Each trucking company is unique and has unique risk coverage needs. However, the average annual cost of truck insurance in 2020 as claimed by Progressive is $982. Keep in mind that your vehicle type, cargo, operating area, driver’s driving record, USDOT authority, deductibles, and coverage limits will come into play as well.

    Top 10 Commercial Truck
    Insurance Companies

    Insurance for commercial trucks is expensive, but some insurance companies offer cheap coverage options. Let’s look at the top 10 commercial truck insurance companies in 2021. 

    Progressive for Commercial Truck Insurance

    Progressive holds an A+ rating from the Better Business Bureau and an A+ financial strength rating from AM Best. Investopedia rates the insurance company as the best overall option for a truck insurance policy. Their coverage options are virtually unlimited and provide stellar truck claims service. They have extended their services to all 50 states and a wide variety of specialty truckers.  

    Sentry for Commercial Truck Insurance

    The same article by Investopedia reports that Sentry specializes in truck insurance. It is available to serve owner-operators of commercial truck companies in all 50 states. They also have flexible coverage options for a wide range of trucks. Sentry has also been awarded an A+ AM best rating. 

    The Hartford for Commercial Truck Insurance

    The Hartford has integrated very specific coverage options in regards to trucking coverage. Although available in all 50 states, the company doesn’t offer online quotes. The best thing about Hartford, though, is that they offer coverage for employees and truck drivers as well as owners.  

    They also provide coverage to the following vehicles:

    • Transport truckers
    • Refuse truckers
    • Ambulances
    • Fire trucks
    why-commercial-truck-insurance

    CoverWallet for Commercial Truck Insurance

    CoverWallet offers online quotes and allows you to buy policies instantly. We found that the truck insurance cost was quite affordable, starting at $125 monthly. The insurance company has satisfactory customer service and coverage options. 

    State Farm for Commercial Truck Insurance

    State Farm is reportedly a company with strong customer service. They offer multiple truck policies in all 50 states but doesn’t offer any online quotes. State Farm is a reliable name in the insurance industry. 

    United Specialty for Commercial Truck Insurance

    United Specialty currently operates in California, Wyoming, Arizona, Idaho, Oregon, New Mexico, Texas, Utah, Nevada, and Washington. They provide coverage for auto liability, cargo, and physical damage. United Specialty doesn’t offer online quotes. 

    Renegade Insurance for Commercial Truck Insurance

    Renegade insurance is one of the prominent insurance agencies offering trucking policies at the lowest rates in 2021. The company offers 24-hour customer service, DOT & Compliance Audit Assistance, services in 48 states, and a massive 20% discount on truck insurance policies.  

    Owner-Operator Independent Drivers Association (OOIDA)

    Available in every state, OOIDA specializes in owner-operator insurance policies. They claim to offer a complete range of coverage for your motor carrier with no hidden renewal terms. They offer competitive rates as well. 

    Western Truck

    Western Truck Insurance is currently operating in 26 states and offers a wide range of coverage. You can either request online quotes or connect directly to a representative. 

    Nationwide

    Nationwide has been awarded an A1 rating from Moodys and an A+ rating from AM Best. The company also offers online quoting. You can choose from various coverage options and enjoy discounts if you’ve installed anti-theft devices or have a good driving record.  

    Moreover, Construction Coverage reports that Nationwide is great for newer drivers and startup companies as they offer cheap trucking insurance policies for new drivers and companies. 

    The Verdict: Who Has the Best Truck Insurance Policy?

    While all of the truck insurance companies seem to provide great coverage options, Renegade Insurance seems to be the best choice for commercial truck insurance. With so much to offer and great customer service and expert claims staff, your insurance purchase is guaranteed to be easy, swift, and worthwhile. 

    Before You Go

    Truck insurance can come in many shapes, sizes, and premium costs. But don’t let the cost keep you from investing in a policy from a trustworthy truck insurance provider. Cheap truck insurance is only as good as the coverage limit it provides. If you’re having trouble choosing a truck insurance company, let an insurance expert guide you.  

    Get in touch with a local insurance agent today.   

    Frequently Asked Questions

    How much does it cost to insure a dump truck?

    Coverage for dump trucks can vary depending on many factors. Colonial Insurance Services states that the premium for a dump truck can range from $4,000 to $14,000 annually. 

    Can a trucking company be self-insured?

    Yes! FMCSA allows trucking companies to self-insure to save company capital. As a self-insured company, they have the right to opt for higher deductibles, pay for their own general liability coverage, and negotiate their own settlement figure in case of an accident. However, standard charges may intervene and make it harder for negotiation. We recommend consulting with an experienced insurance agent. 

    Is bobtail insurance the same as non-trucking liability insurance?

    Non-trucking liability insurance covers the liabilities of the owner-operator in case of an accident when the truck isn’t being used for commercial purposes. Bobtail insurance covers the liabilities of the truck when the trailer isn’t attached to it. Bobtail insurance covers you regardless of whether the truck was operating for commercial purposes or not.  

    How do I save on my commercial truck insurance?

    The best way to lower your truck insurance cost is to be a smart shopper. Multiple insurance companies offer a wide range of coverage. However, you don’t need all of it. Sure, the more policies you buy, the better you’re protected. But do you really need workers compensation insurance if you’re the sole owner and operator of your truck?  

    Here are some ways you can lower your truck insurance cost:  

    • Request quotes from many providers. Talk to your agent and get comparisons before you settle on one truck insurance quote. 
    • Raise your deductibles. 
    • Ask for discounts. Don’t be shy! 
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