Top Factors That Affect Your Commercial Trucking Insurance Rates

The make and model of the truck, the cargo being transported, your operators’ driving histories and the routes your drivers take are all examples of factors that can determine your commercial trucking insurance rates. Insurance isn’t anything you can skimp on when it comes to running a commercial trucking business, as it is legally required in most states and there are certain federal and state-level requirements you must meet.

Keep reading to learn more about the factors that influence your commercial truck insurance costs, the average costs you can expect and how to lower insurance premiums.

On This Page

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  1. Driver History and Experience

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  2. Type of Cargo

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  3. Routes

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  4. Vehicle Type and Age

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  5. Coverage Requirements

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  6. Location and State Regulations

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  What Is the Average Cost of Commercial Trucking Insurance?

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  How To Reduce the Cost of Commercial Trucking Insurance

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  FAQs

1. Driver History and Experience

Commercial trucking insurance rates typically run cheaper for businesses that employ drivers with clean driving records, as these drivers are less likely to get into a car accident that necessitates filing an insurance claim. Insurance companies typically factor in the last three to five years of your driving history when determining rates, and someone with recent accidents and tickets in their driving history will likely pay higher rates than someone with a driving record that is clean or has fewer accidents.

Age is also taken into account, as younger drivers with less experience on the road are seen as risky to insure.

Rates are typically higher than usual for those under 25, with rates usually relaxing afterward, provided they maintain a clean record. Those above 60 may also see higher rates, as older individuals may have slower reflexes and may not be able to drive as safely on the road, especially under the strenuous conditions of driving a commercial truck.^[1]

2. Type of Cargo

Cargo types can also affect the insurance rate. Hazardous or flammable cargo can be more difficult to safely transport and, as a result, often come with higher insurance rates. Additionally, hazardous material requires a higher minimum coverage requirement, likely resulting in higher premiums, but we’ll discuss that later.

More expensive cargo, such as high-value electronics or precious metals, may be more likely to be stolen or damaged than less valuable cargo.^[1] Heavier cargo may also result in higher rates, as its higher weight can increase the damages to your vehicle and risk other people’s safety if the truck topples over.

Additionally, you may need unique insurance coverages depending on what you’re transporting. For example, companies transporting livestock may need coverage for an animal that dies during transit.^[2]

3. Routes

Where you drive your truck can heavily impact your rates, with frequently-traveled unsafe routes potentially resulting in higher costs. Routes that take your truck into urban areas with heavy traffic, high-crime regions or places vulnerable to environmental conditions, like a snowy road or mountain pass, could also result in higher rates due to increased risk.

4. Vehicle Type and Age

A vehicle’s overall age can be a determining factor in rates. Older vehicles worn down due to age might need more frequent repairs, especially if they haven’t been well maintained. Some insurance companies may view this as an increased risk of causing an accident on the road, which could result in higher insurance rates.

However, the solution to cheaper rates isn't always to buy a newer truck, as brand-new vehicles may also result in higher premiums. This is because newer trucks are often more valuable, sometimes with more advanced safety features and higher-quality components that would be more expensive to replace or repair.

Between the two options, a slightly older or used truck that is well maintained may be cheaper to insure than a brand new truck, especially if they don’t feature more sophisticated, high-value components.^[3]

The type of truck also plays a role. Trucks are insured based on their purchase price, with more expensive trucks having higher rates for their increased value. For example, a brand new Kenworth truck would likely have cheaper rates to insure than a Peterbilt due to its lower upfront costs, even though both trucks are manufactured by the same company and share many components.^[4]

5. Coverage Requirements

Coverage requirements will vary depending on whether your truck is transporting intrastate or interstate cargo. The Federal Motor Carrier Safety Administration (FMCSA) sets a standard minimum liability insurance coverage requirement for interstate transport based on the type of cargo being transported, with higher coverage typically coinciding with higher rates.

The minimum liability requirements include:^[5][6]

• Non-hazardous freight (under 10,001 pounds): $300,000
• Non-hazardous freight (over 10,001 pounds): $750,000
• Hazardous freight: $1,000,000 to $5,000,000 depending on the specific type of material

These federal requirements are meant to protect the public in the event of an accident, such as a truck toppling over and spilling hazardous materials. As liability coverage, it also covers any damages or injury done directly to another driver or pedestrian in the event of an accident.

Additionally, the FMVSA requires cargo insurance with a minimum of $5,000 per vehicle and $10,000 per incident for any trucks carrying household goods.^[5]

6. Location and State Regulations

Your base of operations can impact your rates. Like your trucks' routes, regularly driving or parking in high-risk areas or locations with severe weather may raise your rates due to the increased likelihood of damage or theft.

Additionally, expanding your company's footprint could open you up to more risks depending on where your trucking operations take you. For example, expanding your range of coverage from exclusively New Mexico, which had 99 truck-related fatal crashes in 2022, to include Texas, which had 782 similar crashes that same year, could cause your insurance to increase its rates to compensate for the higher probable risk.^[7]

State regulations will also affect intrastate travel. For example, California and Colorado share some of the insurance requirements set by the FMCSA (but may have other requirements as well).^[8][9] Other states, like Florida, require minimum coverage that ranges between $50,000 and $300,000 for cargo, depending on the cargo's weight.^[10][11] Always check with state minimums to ensure you have enough coverage.

What Is the Average Cost of Commercial Trucking Insurance?

Commercial trucking insurance typically costs about $14,000 to $22,000 annually per truck for owner-operators.^[12] However, this may vary depending on your state due to lower minimum requirements or less expensive insurance offerings. For example, Mississippi owner-operators typically pay $3,552 per year if they operate within only the state and $4,664 if operating across state lines. Alternatively, in California, intrastate drivers typically pay $11,834 annually, while interstate drivers pay $14,041.^[13]

How To Reduce the Cost of Commercial Trucking Insurance

Below are a few suggestions on how a trucking company can reduce their commercial trucking insurance costs:

• Enforce strict safety requirements for your drivers and vehicles. Check for potential issues with the vehicle at every rest stop and monitor traffic and weather conditions to lower the risk of a rate-increasing accident.
• Install safety equipment like dash cams, built-in avoidance systems, and telemetrics that can potentially lower the likelihood of a motor vehicle accident and help lower premiums.
• Hire drivers with experience driving trucks and clean driving records. Check for references during the hiring process and ensure they have proper training.
• Ask if there are policy bundles or discounts that can help lower your premium. For example, check if your insurer offers a good driver discount or allows you to bundle liability and cargo insurance policies.
• Increase your deductible to lower your monthly premiums in exchange for greater out-of-pocket expenses on a claim. Keep in mind that you balance your deductible to premium ratio so you are not overly financially burdened if you get into an accident.
• Shop around to find the best rates, generally looking between three to five commercial truck insurance companies to get a range of offers. Consider using a marketplace like SmartFinancial to help you find the policy that meets your goals by clicking here for a free quote.