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How to find cheap commercial truck insurance for your trucking business
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.
How much is commercial truck insurance?
Expect average rates to run in the thousands per truck. 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. If your freight includes pharmaceuticals or expensive art, among other non-typical freights, you’ll likely have to pay extra.
- Your vehicle type. The value of your truck plays a role in your policy’s cost. A high-end truck with all the bells and whistles will cost more to insure.
- Your ability to bundle policies. Buying separate insurance policies typically costs more that grouping your business’s coverage with one provider.
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What level of truck coverage 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. At a minimum, to legally operate a commercial truck, 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.
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. If your truck is involved in an accident, public liability will on cover the cost of damage done to the other party involved. You will be on the hook for the damage to your truck if you don’t have additional coverages that protect you and your truck.
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. For instance, someone slipping and falling on your property, or damage or injury caused by the driver while unloading the freight.
- Physical damage. Covers damages to your truck if you’re involved in an accident. If you’ve financed your truck, your lender may require this type of coverage until you’ve paid off your loan.
- Cargo coverage. Covers any goods you’re transporting. Can also include livestock cargo.
- 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. A policy that extends coverage beyond your liability policy.
- Terminal coverage. Protects your truck’s freight when stopped or parked at designated terminals.
- Limited depreciation. If your truck is totaled, this 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.
- Hazmat coverage. Covers trucks transporting dangerous goods, such as chemicals or fuel.
How can I find cheap truck insurance?
- Get multiple quotes. Comparison shopping is almost always the best way to get a deal.
- Pay your premium in full. You’ll typically get a 5 to 10% discount.
- Choose a higher deductible for a lower premium. But be sure you can cover that higher deductible in case of an accident.
- Improve your credit score. The better your credit, the better the price of insurance.
Commercial limitations and exclusions 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, which is not necessarily what you paid for it or how much you’ll pay to replace it.
- Rental reimbursement limitations. Rental reimbursement can be limited to 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 yo
- ur vehicle to manufacturer’s specs or maintained your vehicle according to government or industry guidelines.
- 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 problem 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.
If commercial trucks are essential to your business’s success, avoid putting your assets and clients at risk by obtaining insurance that extends its protection beyond your everyday needs to the goods you transport and hazards that come with the job.
Depending on how large your business is, a commercial motor vehicle insurance broker might help you find stronger or cheaper coverage than you could find on your own.
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Finder Editorial Review Board Member: Andrew Flueckiger, CIC
Licensed in five states, Flueckiger holds one of the premier professional designations in the insurance industry.
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