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Trucking Insurance Comprehensive Guide for Owner Operators

TRUCKING INSURANCE GUIDE

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  • GLI Dispatch Services
  • July 24, 2023

Trucking Insurance Comprehensive Guide for Owner Operators

Table of Contents

What is Trucking Insurance?

Here’s the thing about trucking. It’s not just about loading up, hitting the open road, and dropping off a shipment. There’s more to it. You’re constantly playing a game of risk, from the moment you turn the ignition to the time the cargo is safely delivered. And commercial truck insurance? It’s your safeguard, your protection from potential financial troubles that can arise if things go awry. Without it, one accident, one theft, or one mishap could derail your entire business.

What are the types of Trucking Insurance?

Trucking insurance isn’t a one-size-fits-all thing. It’s like a menu with a variety of options to suit different needs. There are different types of coverage to consider, each playing a unique role in protecting your business. The trick is to understand these options and piece together a policy that provides the level of protection your business needs.

Primary Liability Coverage

Primary liability coverage is your bread and butter. It’s the basic, mandatory coverage that all commercial vehicles must have. This type of insurance is designed to protect you if you’re responsible for an accident. It covers damages to another person’s property and bodily injuries to others in an accident. Without it, your business could be on the hook for a hefty sum of money if you cause an accident.

Physical Damage Coverage

Then there’s physical damage coverage. This one is like your knight in shining armor for your trucks. It covers damages to your own vehicles due to incidents like collisions, fire, theft, or vandalism. Basically, it gives you peace of mind that if your truck takes a hit, you won’t have to drain your bank account to get it back on the road.

Motor Truck Cargo Insurance

Next up  is motor truck cargo insurance. Consider this your shield for the goods you’re hauling. If those goods are damaged or stolen while in your possession, this coverage can step in to cover the costs. It’s like having a safety blanket wrapped around your cargo, ensuring that a mishap with the load won’t eat into your profits.

Non-Trucking Liability Insurance

Here’s one you might not have heard of – non-trucking liability insurance. This type of coverage protects your vehicle when it’s not being used for business purposes. Let’s say your driver uses the truck for a personal errand and gets into an accident. Non-trucking liability insurance steps in, ensuring your business isn’t left high and dry.

Trailer Interchange Insurance

Finally, we have trailer interchange insurance. This is your back-up for those trailers you’re hauling but don’t actually own. If damage happens to those trailers while in your possession, this insurance coverage can take care of the repair or replacement costs. Think of it as your safeguard for the equipment you’re trusted with.

Additional Trucking Insurance Coverage

Umbrella or Excess Liability Insurance

Here’s where we start exploring the extras. Umbrella or excess liability insurance is like your secret stash of coverage. It kicks in when the costs of a liability claim exceed the limits of your primary liability coverage. It’s your extra layer of protection, making sure your business stays afloat even in the face of a big claim.

Occupational Accident Insurance

Lastly, let’s not forget about your drivers. Occupational accident insurance is there to provide coverage for your drivers if they get injured while on the job. It covers medical expenses, disability benefits, and even death benefits if a tragedy occurs. It’s a way to show your drivers that you’ve got their backs.

What isn't covered under Commercial Truck Insurance?

Now that we’ve covered what truck insurance can protect you from, let’s take a turn and talk about what it doesn’t cover. It’s important to know that not all situations and risks are covered under a truck insurance policy. Detailed below are the exclusions and limitations of Commercial Truck Insurance

Personal Use

If your driver decides to use the truck for personal errands and gets into an accident, your insurance may not cover it. Commercial truck insurance is specifically designed for business use, so it’s crucial to separate business and personal usage.

Employee Personal Property

Your driver’s personal belongings that may be left in the truck are not covered under trucking insurance. So, if your driver left their personal laptop in the cab and it gets stolen, your insurance policy won’t cover it.

Intentional Acts

Here’s another biggie – intentional acts. You can’t purposefully damage your truck and expect your insurance company to foot the bill. If an accident is deemed intentional, your claim will likely be denied.

Wear and Tear

Trucks, just like any other vehicle, experience wear and tear. It’s part of their lifecycle. Your insurance won’t cover the costs to repair damage from regular wear and tear or mechanical breakdowns. This is why regular maintenance is so important.

Improperly Secured Cargo

If you or your drivers are not securing cargo properly and it leads to damage, your insurance company won’t cover it. It’s crucial to ensure that all cargo is secure before hitting the road.

Non-Covered Perils

Certain types of damage or loss caused by perils that aren’t covered in your policy are not insured. For example, some policies don’t cover damage from natural disasters unless you’ve added specific coverage.

What Optional Insurance Enhancements You Should Consider?

Umbrella or Excess Liability Insurance

If you’re looking for extra peace of mind, consider adding umbrella or excess liability insurance. This coverage provides additional protection beyond the limits of your primary liability coverage. If you face a large claim that exceeds your primary coverage limits, this insurance can cover the difference.

Occupational Accident/Workers Compensation Insurance

Occupational accident insurance can provide benefits for your drivers if they’re injured on the job. It can cover medical expenses, disability benefits, and even death benefits.

Rental Reimbursement Coverage

If your truck is in the shop for repairs after an accident, rental reimbursement coverage can cover the cost of renting a replacement truck. This can help keep your business rolling even when your truck is out of commission.

Downtime Coverage

Downtime coverage can provide compensation if your truck is out of operation for an extended period due to a covered loss. This coverage can help you keep up with fixed expenses, like truck payments and driver salaries.

Trailer Interchange Physical Damage Coverage

If you’re in the business of hauling trailers owned by others, consider adding trailer interchange physical damage coverage. This can cover the cost of repairs or replacement if a trailer you’re hauling is damaged or lost.

What is The Cost for Truck Insurance?

After reading about all the potential risks and the protection offered by trucking insurance, you’re probably wondering about the cost. How much will it take to protect your business on wheels? Detailed below here are monthly estimates for each category of insurance.

Primary liability insurance cost:

Average monthly estimate for Primary liability insurance: $450 to $1,200

Physical damage insurance cost:

Average monthly estimate for Physical damage insurance : $100 to $350

Cargo insurance cost:

Average monthly estimate for cargo insurance: $50 to $150

General liability insurance cost:

Average monthly estimate for general liability: $40 to $60

Non-trucking liability insurance cost:

Average monthly estimate for Non-Trucking Liability insurance: $35 to $60

Bobtail (owner-operator) insurance cost:

Average monthly estimate for Bobtail insurance : $35 to $60

What are the factors affecting Truck Insurance Premiums

Truck Driving Record and Experience

Hold onto your steering wheel, because this is important. The driving record and experience of you and your drivers have a big influence on your insurance premiums. If you’ve got a team of drivers with clean records and years of experience, you’re likely to see lower premiums. It’s all about risk – experienced drivers with a history of safe driving present a lower risk to insurers.

Type and Value of Trucking Equipment

The type and value of your trucks can also affect your insurance costs. Bigger, more valuable trucks can cause more damage in an accident, which can lead to higher liability costs. On the flip side, they can also cost more to repair or replace, which can increase your physical damage coverage premiums. So, the bigger and pricier your truck, the more you might have to shell out for insurance.

Types of Coverage, Policy Limits and Liability Coverage

Liability Coverage

How much liability coverage you choose can have a big impact on your premiums. Higher coverage limits mean more protection, but they also come with higher premiums. It’s a balancing act of weighing up the potential costs of a claim against the cost of the premiums.

Physical Damage Coverage

Just like with liability coverage, the amount of physical damage coverage you choose can influence your premiums. Higher coverage limits mean higher premiums, but they also mean more protection for your trucks.

Cargo Insurance

Lastly, the type and value of the cargo you’re hauling can affect your insurance costs. If you’re hauling high-value cargo, you may need more cargo insurance, which can increase your premiums.

How to Reduce Truck Insurance Premiums?

Here’s the good news – there are ways to potentially reduce your truck insurance costs. With a little effort and the right strategy, you could see significant savings.

Implementing Safety Programs and Training

One of the most effective ways to reduce your premiums is to show insurers that you’re committed to safety. Implementing safety programs and providing regular training for your drivers can lower the risk of accidents, which could lead to lower premiums.

Maintaining a Clean Claims History

A history of frequent insurance claims can send your premiums skyrocketing. By focusing on safety and maintaining a clean claims history, you can show insurers that your business is a lower risk, potentially leading to lower premiums.

Installing Safety Equipment and Technology

The use of safety equipment and technology, such as dash cameras and telematics, can also help lower your premiums. This equipment can provide valuable data that can help prevent accidents and defend against false claims.

Reviewing and Comparing Insurance Quotes

Don’t settle for the first quote you receive. Take the time to review and compare quotes from different insurance providers. You might find that rates vary considerably, and you could save by switching to a different provider.

Increasing Deductibles

Finally, consider increasing your deductibles. A higher deductible means you’ll pay more out of pocket if you make a claim, but it can also lead to lower premiums. Just make sure you’re comfortable with the deductible amount should you need to make a claim.

How to Secure Truck Insurance Quote?

Ready to protect your business with truck insurance, here are the essential steps to obtaining coverage.

Assess Your Insurance Needs

Start by assessing your insurance needs. This should take into consideration the types of vehicles you have, the kind of operations you’re running, the cargo you’re hauling, and the distances and routes you’re covering. Remember to always start this process early, preferably at least 3 months prior to the end of your current renewal. 

Researching Insurance Providers

Next, do some research on different insurance providers. Look at their industry experience and reputation, their financial stability and claims handling, and their customer service and support.

Obtain Multiple Quotes

Once you’ve narrowed down your list of potential providers, obtain quotes from each of them. This will allow you to compare coverage and pricing and make an informed decision.

Reviewing and Finalizing Coverage

Finally, take the time to review all policy terms and conditions before finalizing your coverage. If anything is unclear, seek clarification from the insurer or an insurance professional. Remember, it’s crucial to understand what you’re buying before you sign on the dotted line.

GLI Truck Dispatch Services offers one of the best truck dispatch services to owner operators and carriers across USA. We offer other back-office solutions such as compliance and accounting to carriers in addition to our truck dispatch services to help our carriers succeed in this competitive yet rewarding trucking industry. At GLI, our truck dispatchers don’t just dispatch, they go the extra mile to help build relationships to help carriers grow their business. Its where professionalism meets quality. Visit www.glitruckdispatchservices.com to learn more about our processes and how our method of truck dispatching can help you succeed and grow your business. 

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