First, it is important to find an insurance agency that speaks your language. There are many choices out there, so don’t be afraid to ask around and check out your options. Your agent should work with you to understand each aspect of commercial truck insurance. Don’t be too quick to accept what has been suggested. Without due diligence, this could risk paying for coverage that isn’t needed or miss out on getting some much-needed insurance coverage.
As with any auto insurance policy, you need to consider various aspects of a truck driver’s insurance coverage, not only your protection but also the protection of others on the road. There are basic requirements that must be met and optional coverages that may be needed depending on certain factors.
What Type of Insurance Do You Need?
That varies depending on your specific owner-operator circumstance. Are you a leased owner-operator or an owner-operator with authority?
Most leased owner-operators just need bobtail, non-trucking liability, and physical damage. If you are an owner-operator with authority, you are probably required to carry primary liability insurance. The state you are licensed in, and the kind of loads you carry are also factors that come into play when determining the type of insurance you need.
Before you start shopping for a good insurance company, let’s first understand the different types of coverage available. Most trucking policies usually include:
- Primary Liability Insurance: This covers bodily injury and property damages. Truckers who cross state borders are mandated by the FHWA (Federal Highway Administration) to carry limits based on the kind of materials hauled.
- Cargo Coverage: Coverage of the merchandise that is being hauled.
- Trailer Interchange Insurance: This may be needed for physical damage to the trailer.
- Physical Damage on Truck/ Own Trailer: This is collision and comprehensive on own truck/tractor or trailer.
- General Liability: Provides Commercial General Liability for the business itself, not the trucks.
- Worker’s Compensation: Covers employees/ drivers for medical payment and disability income for any work-related injury or disease.
- Occupational Accidents: Provides limited medical payment and limited disability income benefits for any work-related injuries.
- Umbrella Coverage: Provides extra liability coverage above and beyond the underlying General Liability, Auto Liability, and Workers Compensation.
- Towing and Rental: Towing provides coverage for towing the disabled truck when involved in a covered loss (i.e., accident, theft, etc.)
- Gap Insurance: Usually is needed if the vehicle is financed. If a brand-new truck is never insured, a Rider policy may be needed.
Based on your situation, list all the insurance you need. Once you have that information, it becomes easier to find the right company/agent. The next step is to get and evaluate various insurance quotes.
Fluctuation of Insurance Prices and Quotes
Once you have all the quotes you need, you should thoroughly review each one. Do not decide on a quote just because the rates are lower — the best quote is one that offers the best coverage for the money being paid. There is always a reason why an agent offers a cheaper quote than the others. Find out why, then decide whether you still want to work with them.
Compare quotes that have similar charges in relation to the covers offered. The following are the factors that affect the premium:
- Garaging Address: Some companies look at the ZIP Code to price your policy, while others may look at the County. Remember always to distinguish between your mailing address and the garaging address.
- Credit of Applicant: Some trucking companies are credit-driven. Truck applicants with better credit get better prices.
- CDL Experience/Operator Age: While many companies will not even consider you if you have less than 2 years of CDL experience, other companies will penalize you for having less experience or if your MVR has blemishes. While most companies will not insure anyone under the age of 21, there is normally a surcharge for drivers under 25 years of age.
- Prior Insurance: Many companies will give you discounts if you show proof of prior insurance without lapse.
- Limits of insurance on your primary liability, cargo, and trailer interchange. The more coverage you ask for, the more money you must pay.
- Radius of Operations: There are no rules here. Some companies prefer short-range (up to 300 miles) truckers while others will penalize local truckers (especially if the trucking business is situated in a large metropolitan area like Chicago or New York.)
- Merchandise Hauled: Certain merchandise (electronics, expensive clothes) are more expensive to insure than, for example, paper products or regular household products. Refrigerated products are also more expensive to insure than plastic products.
Other coverages that may cost you more but you may consider beneficial are equipment coverage, optional accident insurance, and non-owned trailer coverage.
Shopping online may save a few dollars on insurance, but if you have an agent already, having a rapport probably will be more fruitful as they will be able to find the best discounts available for your specific circumstances. Often, you can show the online quotes to your agent and get a price match.
In conclusion, the more informed you are about trucking insurance, the better deals you can get. One glove doesn’t fit all, so analyze your situation, understand what you need, and do some research on policies and prices online before making a decision on owner-operator insurance.
Happy Trucking from Landstar!