How To Drive Confidently With Commercial Truck Insurance
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Commercial truck insurance is coverage specifically for business owners who use commercial trucks to transport goods or people. This specialized form of commercial coverage protects your trucks, drivers, cargo and more against accidents and other unexpected events.
Whether you’re a solo truck driver or manage a fleet of trucks, this guide will explain how commercial truck insurance works and how much it will cost.
What Is Commercial Truck Insurance?
Commercial truck insurance is a type of commercial insurance policy designed to protect businesses and drivers who own and operate commercial trucks. These vehicles are typically used to transport goods, materials and equipment and are often essential to the operations of a wide range of industries, from construction and agriculture to retail and transportation.
How Does Commercial Truck Insurance Work?
Commercial truck insurance is specialized coverage for the unique risks inherent to commercial trucking businesses. The policyholder pays a regular premium — usually monthly or annually — and in exchange, the carrier covers losses related to auto accidents, cargo being transported and more depending on the policy.
Primary liability insurance is the most basic type of commercial insurance for truckers and is typically required by law. This coverage provides protection for third-party bodily injury and property damage that may occur in the event of an accident.
Insurance companies may sell additional insurance options such as cargo coverage, which covers physical goods during transportation, and bobtail insurance, which extends coverage when the truck is being driven without a commercial trailer or even for personal use. In addition, insurance for a trucking company may include physical damage coverage, which covers damage to the truck itself, such as those caused by collisions, fire, or vandalism
What Types of Vehicles Are Covered by Commercial Truck Insurance?
Commercial truck insurance typically targets commercial medium- and -heavy duty vehicles used to transport goods, equipment and materials and sometimes passengers:
- Semi-trucks: Also known as tractor-trailers or 18-wheelers, these vehicles are typically used to transport large quantities of goods over long distances.
- Box trucks: Smaller than semi-trucks, box trucks are used for delivering goods to retail stores or transporting equipment for construction projects and are often equipped with a large, enclosed box or cargo area.
- Dump trucks: You can usually find these vehicles being used for construction and landscaping and are designed to transport and unload loose materials, such as dirt, gravel or sand.
- Flatbed trucks: You've likely seen these vehicles transporting large, oversized or irregularly shaped items, such as construction materials, heavy machinery, prefab homes or vehicles.
- Tow trucks: These vehicles transport inoperable or damaged trucks and cars.
- Refrigerated trucks: Also known as reefer trucks, these vehicles are used to transport perishable goods that require temperature-controlled environment, such as food or medical supplies, .
- Tanker trucks: Liquids or gasses, such as fuel, chemicals or water are transported by these vehicles.
- Moving vans: These vehicles are typically used to haul smaller loads such as furniture, fuel, chemicals and refrigerated items.
- Buses: These vehicles ferry passengers to various locations.
When Do I Need Commercial Truck Insurance?
Every state requires businesses that use hauling vehicles to have commercial truck insurance depending on what is being hauled, be it people as in the case with buses, chemicals or equipment. At the minimum, states will require truck drivers to at least maintain liability coverage before they can legally drive on the road.
Types of Commercial Truck Insurance
Commercial truck coverage can include a wide swath of insurance products that protect against liability, cargo damage and more.
- Primary liability: Covers the costs of bodily injury and property damage caused by the driver to others, but not to the driver or the truck itself.
- Umbrella policy: Offers extra liability coverage beyond the limits of a primary insurance policy, usually with limits of up to $15 million. For instance, if the truck driver is responsible for $30,000 in damages but the auto policy covers only $20,000, the umbrella policy will cover the remaining $10,000.
- Physical damage: Includes collision coverage, which pays for damage caused by a collision with another vehicle or object, as well as comprehensive coverage, which covers damage caused by other events, such as fire and theft.
- Trailer interchange: Similar to physical damage insurance, except it specifically covers non-owned trailers.
- Bobtail insurance: Covers your commercial truck when it is being driven without a trailer attached but it is still considered on-duty.
- Motor truck cargo: Covers damaged, lost or stolen goods and cargo that are being transported in your commercial truck.
- Uninsured/underinsured motorist: Provides protection to truckers who are involved in a car accident with a driver who either has insufficient coverage or no coverage. Without this coverage, you will need to absorb the costs yourself or sue the at-fault party.
- Rental reimbursement: Pays for the cost of renting a replacement vehicle while a damaged truck is being repaired or replaced, as well as truck payments in some cases.
- Workers' compensation: Protects employees who are injured or fall ill due to their work by providing financial aid for lost wages and medical bills. This type of insurance is required by law in most states.
- Occupational accident: Provide financial protection for workers who are not covered by traditional workers' compensation insurance such as independent contractors.
- Motor truck general liability: Safeguards businesses against allegations of harm against a third party’s body or property. This coverage is not always mandatory, although it is highly recommended to cover lawsuits related to property damage, injuries and errors during service provision. The policy may also cover claims of defamation and false accusations.
- Non-trucking liability insurance: Protects the driver from financial losses that may result from accidents or incidents that occur while the truck is being used off-duty.
How Much Does Commercial Truck Insurance Cost?
Insuring a semi-truck can cost between $3,000 and $12,000 annually. Generally, the larger and more expensive the truck, the more it costs to insure because the insurance company faces a higher replacement cost if the truck is totaled.
However, premiums can also depend on the company and the coverage purchase. According to Forerunner Insurance Group, primarily liability insurance can range from $5,000 to $7,000. Adding just one type of coverage to an auto policy can increase your premium anywhere from $50 to $3,000 and up:
- Physical damage: $1,000-$3,000
- Bobtail insurance: $350-$400
- Uninsured/underinsured motorist: $50-$100
- Occupational accident: $1600-$2,200
- Umbrella policy: $500-$700
Of course, choosing higher coverage limits will cost more but you will receive greater financial support when you get into an accident. Depending on the risks your trucking business faces, you may want to pay for the higher coverage limits.
What Are the Best Commercial Truck Insurance Providers?
There are several trucking company insurance providers you can choose from. We've gathered a list of some of the best in the country that provide affordable truck insurance:
Owner Operator Direct
Primary liability, expanded refrigeration coverage, traffic and security expense coverage, towing expense coverage, debris and pollution removal, reload expense coverage, bobtail insurance
Owner-Operator Independent Drivers Association
Primary liability, general liability, motor truck cargo, physical damage, passenger accident coverage
Primary liability, general liability, motor truck cargo, physical damage, non-trucking liability, cyber liability
Great West Casualty Company
Primary liability, general liability, motor truck cargo, physical damage, umbrella coverage, workers’ compensation
Primary liability, motor truck cargo, trailer interchange, rental reimbursement, gap coverage (when applicable), bobtail insurance
General liability, non-trucking liability, motor truck cargo, trailer interchange, rental reimbursement with downtime
How To Purchase Commercial Truck Insurance
Similar to buying any type of insurance policy, you should take the following steps to assess your coverage needs and shop around for the best policy that meets the needs of your commercial trucking business:
- Identify your insurance needs: This may involve considering the type of trucks used in your business, how experienced your drivers are and the type of cargo being transported in your trucks. Working with an insurance agent experienced with the trucking industry can help you identify the specific types of coverage you need to protect your business.
- Shop around: To obtain a quote for commercial truck insurance, include information about your business, driving history, the types of cargo you transport and the location and frequency of your operations. Be sure to get multiple quotes so you can find the best price. And remember, cheap commercial truck insurance isn’t always better and you should look at customer reviews of any providers you’re considering.
- Review policy details: Make sure you understand the coverage limits, deductibles and exclusions and ask any questions you may have before making a final decision.
- Purchase the policy: Once you agree to the policy details and the offered quote, coverage will begin on the policy start date as soon as you pay your premium.
- Re-assess your coverage needs: Every few months or so, you should look at what other insurance carriers are offering. If there are better coverage options or cheaper rates, you may want to switch carriers. Also, consider how your business has changed, as you may need less or more coverage than what you purchased the first time.