Following the truck payment and fuel costs, insurance is one of an independent owner-operator’s most considerable expense. Commercial truck insurance is a fixed cost, and that is why ensuring you get the best deal possible is essential if you want to keep the number of miles you drive to breakeven, low. Without having adequate insurance, an accident or cargo theft/damage claim could cripple your finances. Some larger companies such as Schneider National and Knight-Swift Transportation are said to be self-insured.
How much does commercial truck insurance cost?
Commercial truck insurance expenses can add up quickly. That is why successful owner-operators budget their premiums a year ahead. Your age, driving record, and the age and condition of your truck, the type of freight you haul, the lanes you run, and the state requirements all impact insurance costs. However, an owner operator that is just starting their business is likely to pay the following on their insurance premiums:
|Type of Insurance||Coverage amount||Premium Paid|
|Primary liability||$1 million||6,000 USD/year|
|Physical damage/Cargo||$150,000||6000 USD/year|
|Non-trucking use liability||$ 1 million||$700 USD/year|
Leased-on owner-operators will carry similar coverage but pay less of it themselves. Usually, this is performed based on a statement deduction.
What Truck Insurance is Needed?
If you are hauling freight under your authority, then you are required by federal law to have a minimum of $750,000 liability coverage. This is to protect you in a major accident in which you are at fault and to ensure that the injured parties can be compensated for their losses. You may want to increase this coverage to $1 million because most shippers and brokers will require it.
Your insurance broker will quiz you on several questions about your business and experience which they will include in an insurance packet and then forward it to the underwriter for the quotes. These questions are likely to include information about the types of commodities you move, the regions in which you drive, operating radius, previous trucking experience, and company safety and security policies. Owner-operators can help themselves get the best quote by demonstrating they have a stable business and safety management plan. Combining different coverage with one insurance underwriter can help especially if the underwriter offers a dual-deductible credit. This means that you only must pay the deductible amount once, if an accident occurs, and it’ll cover both damage and physical policies.
With more fleets installing in-cab video cameras and road facing dashboard cameras, it is likely these will become a mandatory requirement for getting insured. After all, truckers spend 90% of there work time on the road which means it is critical they have some footage or evidence if an accident happens to occur.
Although not a legal requirement, physical damage insurance is usually required by lenders if you are in the store for financing your truck/trailer. Insurers will always try to total loss a used truck and repair a newer model. This is basically due to the insurer still trying to go the cheaper route. Damage premiums are calculated based off a percentage of 3-5 percent of the truck/trailer value. Your commercial driving record/abstract will also be accounted for when evaluating premiums.
Hint: when obtaining damage insurance, always ask if the expense of towing is included in your policy because it will end up costing you thousands of dollars in extra towing fees if you don’t!
Because all commercial and non-commercial vehicles depreciate massively as they are used more and more, the ability to get top dollar for you insurance settlement is crucial. If you’ve got a new truck you’re hauling freight with, then you should consider gap insurance. It will adequately cover the difference between the settlement you receive from your damage coverage and the total amount you still owe on the loan. For example, if your truck is totalled and the insurer determines the value of the truck to be $70,000 yet you still owe $110,000 in loan payments, gap insurance will make up for the $40,000 difference.
Besides the premium, the other significant number is the deductible. If you are not familiar, a deductible is merely the amount of initial money you pay as part of your insurance claim. For example, the total damages of an application are estimated to be around $10,000, and a $1000 deductible means you pay for the first $1000 and the rest is covered by the insurer. Insurance is intended to protect the policyholder from sizeable catastrophic debt in the event of an accident. Therefore, smaller accident debts need not be insured which is why anything lower than your deductible is not claimable. The higher the deductible, the lower the insurance premium.
The federal government scrapped the requirement for motor carriers to hold a minimum of $5,000 in cargo coverage. However, most fleets buy $100,000 of coverage just because shippers require it to protect their freight.
Non-trucking use liability is when you’re not actively engaged in the movement of cargo. Mostly, it includes most instances of bobtailing (tractor-only) scenarios.
This type of insurance is a requirement under the state and provincial regulations, and therefore it may already be insured through a government agency. Check with your local state/province for clarity on the rules.
Full List of Trucking Insurance Types
|Aggregate and Combined Deductibles|
|Collision, Comprehensive or Specified Perils|
|Earned Freight Charges|
|Employee Benefits Coverage|
|Employment Practices Liability Coverage|
|Excess and/or Umbrella|
|Federal and State DOT authorities assistance|
|Fuel & Oil Delivery|
|Fuel, ICC, Customs, and Sub-hauler bonds|
|General Freight Haulers|
|High Valued Commodities Requiring Limits of $250,000 per vehicle or high|
|Loading and Unloading|
|Moving & Storage|
|Over sized and Overweight|
|Personal Effects for Drivers|
|Pollution Buy Back|
|Refrigerated and Heated Operations|
|Sand, Stone and Gravel|
|SIRS and Large deductibles|
|Timely filing of federal and state financial responsibility filings|
|Uninsured / Underinsured Motorist|
|Various payment options|
Top 10 Commercial Truck Insurance Companies
In the complex world of Trucking and Transportation, you need to be able to rely on your insurance agent to have the expertise to service your account. Your agent should not only know where to place your account for the best rates and coverage available, but he or she should also work to assure you in compliance with Federal, State, and Local insurance regulations and meet the requirements of those you serve.
1. Hiscox Insurance
Hiscox is the expert in small business insurance. They can help you meet the minimum $750,000 requirement for liability coverage and other areas such as worker’s comp. Independent trucking contractors have found the services provided by Hiscox to be quick, thorough, and cost-effective.
If you are still going through the process of incorporating your trucking company, use Promo code “Hiscox-promo” to save 20% on incorporating filing costs.
Progressive offers customized truck coverage including motor truck cargo, non-trucking liability, trailer interchange for tractor service companies, and rental reimbursement with downtime compensation.
They also help with state and federal filings which tells the government that you have the required liability insurance as per the regulations.
Progressive specializes in heavy truck claims and handle all their adjustments, in-house. They have partnered with lots of pre-approved repair shops which give Progressive customers priority.
One neat feature of using Progressive is the business experience discount which is given to truckers who have been operating under their own authority for at least three years.
State Farm is one of the leaders in commercial insurance. They offer a wide variety of products including comprehensive collision, liability, personal injury, and trailer interchange coverage.
They operate based on an agent structure, so it is important you do a little research beforehand to ensure you are getting the best quotes from all underwriters. We recommended using NetQuote to find the best insurance premium rates for trucking business policies.
4. HUB International
HUB International Transportation Insurances Services, Inc. (HUB Transportation), a leader in the trucking industry, is one of the nation’s top insurance and risk management firms. Because of this advantage, they can negotiate favorable pricing and the most appropriate coverages based on your individual needs. When you choose HUB Transportation, the most up-to-date trucking specialists, you get the advantage of keeping informed of all the current trends, risks and accidents in the trucking industry, as they relate to you. Your trucking company deserves a specific plan catered to its employee’s needs. Commercial Trucking Insurance provides quality insurance at the best price, and you’ll enjoy their exceptional customer service.
Well, we’ve discussed the top 4 commercial trucking insurance companies, but we promised you 10. Here are other options to consider:
5. Reliance Partners
7. National Interstate
8. Northland Insurance
9. AIG Truck Insurance Group
10. 1st Guard
Things to consider when evaluating an insurance company
- The most favorable terms from insurers, considering your circumstances
- Open and honest communication to answer all your insurance questions
- No pressure. You decide for yourself the terms of your insurance and the provider
- Full compliance with all laws and regulations
- Take their commitments to clients very seriously, and if are not fulfilling your expectations, then your concerns should be addressed immediately