What you should know about narrowing down the right coverage.
There’s a lot that goes into running a profitable business. Part of it involves protecting your assets from everyday and unexpected hazards — including the very vehicles that deliver your business from A to B.
If your fleet includes trucks or service utility vehicles, you need commercial truck insurance.
This guide helps you untangle the coverages, requirements and eligibility for truck insurance so that you can get your business on the road at an affordable price.
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What kind of commercial truck insurance do I need?
Finding the level of protection that fits your needs and budget involves considering the freight you carry and your business operations.
The Federal Motor Carrier Safety Administration sets minimum insurance requirements for commercial trucking. To legally operate a commercial trucker, you’re required to carry public liability insurance, which includes bodily injury, property damage and environmental restoration.
Your specific requirements depend on the type of freight and weight you typically carry, with minimums that include:
- $300,000 for nonhazardous freight moved only in vehicles weighing under 10,001 pounds.
- $750,000 for nonhazardous freight moved only in vehicles weighing 10,001 pounds or more.
- $1 million for oil moved by for-hire and private carriers.
- $5 million for other hazardous material moved by for-hire and private carriers.
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What other coverage should I consider?
Commercial truck insurance coverage is available for nearly any hazard you could potentially encounter.
Although the FMCSA requires public liability insurance only, the bare minimum isn’t always the most advisable coverage.
Here’s a rundown of what you’ll find with most commercial truck insurance providers:
- General liability. Protects a business from bodily injury or property damage that might occur outside of operating your trucks or fleet.
- Physical damage. Covers damages to your truck if you’re involved in an accident. If you’ve financed your truck, your lender may require physical damage coverage until you’ve satisfied your loan.
- Motor truck cargo. Covers loss or damage to the freight you’re carrying in your truck.
- Nontrucking liability. Extends your truck’s coverage for personal use.
- Bobtail coverage. Covers the cab of your truck when it’s not carrying the trailer.
- Trailer interchange. Covers trailers that you don’t own but are pulling as part of an interchange agreement.
- Medical payments. Covers the medical expenses of the driver and any passengers injured in an accident.
- Uninsured motorist. Protects you when you’re in an accident with a driver who doesn’t have insurance or adequate insurance.
- Trucking umbrella. Umbrella policy providing coverage in excess of your liability policy.
- Terminal coverage. Protects your truck’s freight when stopped or parked at designated terminals.
- Limited depreciation. If your truck is totaled, covers the difference between the fair market value of your truck and the amount you’re likely to pay for a new one.
- Rental reimbursement with downtime. Covers the cost of renting a truck while your truck is being repaired.
Commercial limitations to watch out for
You’re likely to encounter a range of policy limitations, exclusions and conditions when buying commercial truck insurance.
- Collision limits. If your truck is totaled, your insurer will pay up to a maximum amount to replace your truck — typically the actual cash value. This amount represents the depreciated value of your truck, not necessarily what you paid for it or how much you’ll pay to replace it.
- Rental reimbursement limitations. Rental reimbursement pays for a rental while your truck is repaired after an accident. But it generally covers with a maximum daily amount and number of days it reimburses you for.
- Distance limits and restrictions. Policies often specify a radius in which you can drive for full coverage — for instance, a 300-mile radius.
- Vehicle weight conditions. Policies may specify conditions based on how much your vehicle weighs. For instance, to qualify for rental reimbursement, a flatbed truck can’t weigh more than 16,000 pounds.
- Maintenance and precautions. To remain covered, you might be required to prove you’ve operated your vehicle to manufacturer’s specs or maintained your vehicle according to government or industry guidelines.
Exclusions you’re likely to encounter
Given the nature of a commercial business, policies often include situations or damages they won’t cover even after an accident.
Keep an eye out for exclusions that include:
- Cargo insurance exclusions. Policies don’t include all types of cargo and could exclude art, pharmaceuticals, live animals and explosives.
- Wear and tear, deterioration or maintenance failure. You won’t find coverage for damage resulting from wear and tear or deterioration, such as rust or a problems routine maintenance would’ve prevented.
- DUIs or DWIs. Your insurer will likely deny coverage for any operator found driving under the influence of drugs or alcohol — or even who refuses to take a drug or alcohol test following an incident.
- Unsecured property or precaution failure. To avoid a denial on your claim, you might need to prove that you secured your property and took sensible precautions against loss or damage.
What affects the cost of a commercial truck insurance policy?
The cost of commercial truck insurance is determined using many factors that include:
- Your operators’ driving history. A driver’s past records can affect premiums, resulting in higher premiums for operators with spotty records.
- Your typical driving radius. Coverage for longer driving distances typically come with higher premiums. Interstate or long-distance drivers may see higher premiums than intrastate or short-distance drivers.
- What you haul. The types of cargo you carry is factored into the cost of your insurance policy.
- Your vehicle type. The value of your truck plays a role in your policy’s cost.
- Your ability to bundle policies. Buying separate insurance policies typically costs more that grouping your business’s coverages with one provider.
What to look for when comparing policies
When weighing a policy for your commercial fleet, consider your needs across the coverage your require.
- Vehicle insurance that covers your truck or fleet.
- Freight insurance that covers the goods you’re hauling in transit.
- Liability and business insurance for coverage against a range business hazards, potential legal liability and loss of earnings.
- Additional coverage such as motor truck cargo and medical payments.
If you’re a commercial business, it’s likely that commercial trucks are essential to your success. Avoid putting your assets and clients at risk with insurance that extends its protection beyond your everyday needs and to the goods you transport and hazards that come with the job.
Unlike your personal car insurance policy, limitations and exclusions for commercial truck insurance can affect the suitability of a policy for specific industries or vehicle uses. When coming through policies, consider the conditions and exclusions of a policy along with its costs and benefits.
Depending on how large your business is, a commercial motor vehicle insurance broker might help you find stronger or cheaper coverage that you can find on your own.