As long as goods, materials, scrap and waste need to be moved from point A to point B, and as long as there are businesses whose services are best delivered by truck, there will be trucking business. Those who make their living with their trucks are accustomed to the expense of trucking insurance. To the uninitiated, getting a truck insurance quote might seem to be just the same as insuring your personal vehicle. However, truck insurance quotes can get complicated. Reputable truck insurance companies will know how best to help you given the specific types of business you conduct, and the associated federal, state, county and municipal requirements for truck insurance.
Big Trucks
Big trucks can refer to any truck larger than a pick-up truck. A partial list might include:
- Armored Trucks
- Box trucks
- Bucket carriers
- Cargo Trucks
- Cement mixers
- Cement trucks
- Delivery vehicles
- Dump trucks
- Log trucks
- Long Haul and Short Haul Tractor Trailers
- Tow trucks
Big truck insurance liability is a specialized area of commercial insurance. Those companies that specialize in these lines of coverage may further specialize in certain industries from logging and wreckers to construction and refuse hauling. The fundamental factors that affect the type and amount of truck insurance coverage are:
- The skill and experience of the driver
- The type of vehicle
- The nature of the cargo or material carried
- The environment in which the vehicle is operated
- Coverage required by local, county, state and federal laws
Truckers insurance is available from a wide variety of insurance carriers. Seeking out an agent who is very familiar with the type of insurance you need and the industry you are in, is your best starting point to make sure you adequately covered to conduct business with managed risk.
Motor truck cargo insurance will normally be required by customers who are asking you to haul their products or supplies. They want to make sure that they are covered if anything happens to the cargo you are hauling on their behalf. There are limits to the liability of the hauler including the following:
- Acts of God, such as a storm or other catastrophic natural event
- Public Enemy which refers to actions of riot or war.
- Inherent Vice is a loss arising out of spoilage, degradation or deterioration caused by transit time, method or handling. This usually refers to cases where the vulnerability of the cargo was not properly disclosed.
- Act of Fault by the shipper such as improper packing.
- Public Authority which normally refers to confiscation by U.S. Customs or other policing authority.
In addition, to motor truck cargo insurance and primary liability coverage, certain types of trucks require additional insurance, such as tow trucks and dump trucks.
Tow Trucks
The tow truck business has its own unique kind of risks. When people call you for help, you are the hero; right up until the towing process further damages their vehicle. The best tow truck insurance will protect you if vehicles you are towing are damaged by theft, fire, collision or vandalism. If you are called by a lien holder to tow a car for repossession, you can end up seeming like the villain if the lien holder didn’t have their paperwork straight or made legal errors in the repossession process, it could be the tow truck driver that takes the initial impact. Special tow truck insurance for “wrecker” businesses can protect you from claims of invasion of privacy or improper seizure of property. This line of business can be very lucrative. However, like many lucrative businesses, the exposure to losses is significant. Besides the inherent risk of doing business, tow truck insurance should also cover loss and damage to the vehicle and liability for loss and damage to the property of others. Professional commercial trucking insurance agents how know this business works and what additional coverage you might need, such as insurance for any property stored on an impound lot you operate.
Dump Trucks
If your business is hauling construction materials, scrap, waste, snow or ice, you operate a dump truck. Dump trucks, classified as heavy commercial vehicles, carry specific kinds of risk requiring specialized insurance. Both the truck and cargo are subject to losses by damage and losses from the liability of damage to others and their property. Dump truck insurance rates depend upon the truck itself, the training and experience of the drivers, and the hazardous nature of the transported material. Cargo such as bio-hazard waste or aggregate construction materials has its own risks and its own type of insurance coverage requirements. For example, there is special insurance just for carriers who haul sand and gravel loads. Dump trucks that work primarily in bad weather with ice and snow crews have the added liability of driving in extremely hazardous conditions. You may actually need several types of insurance products to operate a hauling business that uses a dump truck, including primary liability coverage, physical damage insurance and motor truck cargo insurance. Truck owner/operators, who may haul different types of loads and have the appropriate licenses and primary liability insurance coverage, may be able to insure their trucks and cargo on a short term basis for projects with a specific start and end date. You might also be interested in dump truck financing.
Truck Driver Insurance
The fault in an accident between a truck and another vehicle can be attributed to the driver of the truck, the other vehicle’s driver, the truck owner, the truck maker, the brake manufacturer, the trucking company and a host of other parties if someone can connect the dots. Typically, the driver, if he or she is not an owner-operator, is in the most fragile financial position. So, truck driver Insurance is required by federal law. Simply stated, operating a truck without this insurance is a violation carrying serious legal penalties. This coverage is required to guarantee that damages are paid and will not depend upon the financial position of the driver. Rates for truck driver insurance depend upon driver experience, history, and operational circumstances. The truck is generally covered separately from the driver for damage, theft and other losses to the truck itself. Owner-operators will be able to purchase a bundled policy which provides both types of coverage. If you are an independent driver, do not assume that those that hire you for a long or short term job have adequate coverage. Larger trucking companies will carry all the types of insurance necessary to operate their business including truck driver insurance for each of their drivers. Given the impact of not having this coverage, it is a bad idea to just assume it is in place.
Coverage Limits
Truck insurance rate quotes should be clear about specific coverages and coverage limits. Some coverages are required by the Federal Motor Carrier Safety Administration. Motor contract carrier and common carriers and vehicle operating freight forwarders are required to carry public liability insurance for losses involving bodily injury, property damage and environmental restoration. Freight limits would be $750,000 to $5,000,000 depending on what is being transported, The limits for non-hazardous contents moved by trucks under 10,000 pounds is much lower at $300,000. Passengers need to be covered for $5,000,000. Drivers operating vehicles able to carry less than 16 passengers is less at $1,500,000. Motor common carriers and freight forwarders must insure cargo at $5,000 per truck and $10,000 per event. Each state may also have particular insurance requirements even if you do not transport anything across state lines. For multiple trucks insurance is usually obtainable at a discount. Comprehensive coverage for a trucking business should include primary liability, truck cargo, general liability and non-trucking liability.
Managing Insurance Costs
Knowing the tips and tricks of experienced trucking companies can help you manage your truck insurance rates. Of course, you will want to obtain several quotes. Online quote services are great for this purpose. Prices for the same coverage can vary as much as 30% from provider to provider. So, do your homework before buying. In addition to being a diligent shopper, you may also want to take advantage of one more of the following tips, too.
- Sometimes buying truck insurance right from providers may uncover discounts that wouldn’t be available through an insurance broker. When you don’t work with a broker, the provider saves the commission.
- That said, it’s also possible that the least expensive policy can most easily be located with an insurance broker’s assistance. If your trucking business is especially high risk, it might be wise to work with a specialist in this area that can help negotiate the right provider at the right price.
- Develop documented safety and security policies and procedures, and implement measures for enforcement.
- Consider requiring your drivers to take defensive driving courses and implement safety technology such as antilock brakes, airbags and alarms to reduce the risk of loss due to injury, accidents or theft.
- Keep up with maintenance and repairs on vehicles. Regular maintenance can eliminate a minor problem before it causes a major incident.
- If you have multiple trucks, aim to insure all of them under one provider to reduce premiums.
- Rather than reduce coverage, consider increasing deductibles to manage costs. Generally, the higher the deductible the lower the premium. Having lean coverage can mean the end of your business if a claim can wipe you out.
- Be choosy about where vehicles are parked when unattended. If your trucks are kept in a secured facility, this fact will be taken into consideration when determining your rates.
- When considering how much coverage you need on the truck itself, check the vehicle warranty and truck loan terms to avoid paying for excess coverage.
- Keep a close eye on drivers’ records. The better the driving record the cheaper the insurance.
- Try your best to never let coverage lapse. Insurance companies will want to see continuity of coverage and good explanations for any gaps.
- Keep up with premiums and avoid amassing a history of late payments.
The truck insurance company you choose may be able to offer additional suggestions and measures in order to reduce premiums. Do your research on trucker insurance companies for their reputation on paying claims and providing service to policy holders. Saving money by going with a less than reputable truck liability insurance company can mean headaches when a claim is followed or when legal requirements change.