What Is Commercial Truck Insurance And How Much Will It Cost You?

Every business has specific needs and specific needs require specific insurance. For trucking businesses, businesses with trucks, or independent truck drivers, commercial truck insurance is a tailored policy that addresses trucking risks. No matter how many trucks you have on the road, this insurance will help protect you, your business, and your vehicles. If you are an owner-operator of truck or leasing through a motor-carrier, you’ll want to find the perfect truck insurance, and arming yourself with knowledge is the first place to start.

In this post, we’ll cover everything you need to know about truck insurance including who needs it, where to find it, and how much it’ll cost.

What Is Commercial Truck Insurance?

Commercial truck insurance is a specific grouping of insurance auto policies developed to cover trucking needs. The trucking policies start with primary liability and build upon that foundation with various additional coverages. Primary liability truck insurance is often required as part of a trucking license — it protects people and property from damage caused by your truck. 

If you are a driver and want to drive on your own authority, then you will need primary liability insurance. If you are an owner-operator of a trucking company, then you’ll expand your trucking insurance to include general liability, as well.

Need insurance to drive? Primary liability is your goal. Need to get your trucks on the road? You’ll need general liability.

A primary insurance policy will only cover the damage to another vehicle or to a person in the event of an accident. At the very least, the public is protected. General liability, however, offers additional protections in the case of a lawsuit or a libel/slander/false advertising claim against your business. Most insurance experts would encourage you to invest in a general liability commercial trucking plan. All trucks require at least $750,000 in insurance coverage. Additionally, the Federal Motor Carrier Safety Administration (FMCSA) might require certain trucking operations (for example, those that haul cars) to show proof of adequate general liability coverage.

According to Trusted Choice (a group of independent insurance agents), the average cost of a commercial truck accident in the United States is $59,000 — and one in three small businesses will fold because of uninsured costs related to an accident or lawsuit. Covering yourself with the right insurance is a business-saving tactic.

Commercial Truck Insurance Vs. Commercial Auto Insurance

Trucking is different than driving around the city in a work van. Drivers often haul a large amount of merchandise or materials, across state lines, for long hours. The Federal Motor Carrier Safety Administration (FMCSA) — the governing body over trucking — requires certain insurance minimums needed by owners before their trucks can even hit the road. Drivers have to prove they have a minimum of primary truck insurance to be approved by the FMCSA. Leasing agreements for the trucks might also require proof of general liability truck insurance.

Why won’t a commercial auto policy cut it? Well, the trucking world ultimately has different day-to-day risks than cars/vans, and for-hire truckers need truck insurance, not commercial auto. Otherwise, truck drivers might find themselves vastly under-insured under a commercial auto plan (or unable to get behind the wheel at all).

What Commercial Truck Insurance Covers

With a general liability commercial truck policy, you’d be covered in the following situations:

• Bodily Injury: If someone is hurt by your truck this pays for medical bills and the potential lawsuit costs that may arise. This also covers someone who might slip and fall on your property.
• Damaged Property/Damaged Commodities: If your truck damages someone’s property, this will cover the cost to fix and replace the property. Also, general liability insurance will cover the cost and damages if you deliver commodities to the wrong address.
• Driver Accidents At Delivery Locations: Many variables fit under this particular category, but if your driver causes any damage to property at another site, your general liability will cover the damage.
• Libel, Slander, & False Advertising Claims: If you conduct any sort of advertising or represent your brand out on the road, general liability coverage also helps out in the event of a libel, slander, or false advertising lawsuit.

What Commercial Truck Insurance Doesn’t Cover

Commercial truck insurance policies don’t cover everything. Look for additional endorsements to cover these possible scenarios:

• Specific Vehicles That Aren’t Trucks: It should go without needing a mention since truck is in the title, but this insurance is specific to certain types of trucks. The following vehicles are not covered under commercial truck insurance: cement trucks, limos, hearses, buses, passenger vans, or ice cream trucks.
• Driver Injuries: The basic insurance policies are about protecting other people (paying for damage and medical bills and safeguarding you in a lawsuit). If you’d like to protect your worker’s injuries, those claims would be part of a worker’s compensation insurance plan.
• Damage To Your Trucks: General liability covers the cost of damage to others, not yourself. If you want to insure your own trucks, you’ll need physical damage coverage. While it isn’t required by law to insure your own property, it’s smart.
• Lost Product Due To Broken Refrigeration: If a refrigerated truck (reefer) breaks-down or the cooling component breaks down, you will need specific insurance to cover the replacement and the loss of cargo.
• Loss Of Cargo: The federal government might require you to carry a minimum of $5,000 in cargo coverage but truck drivers are often carrying cargo worth far more than that, so you might want to invest in more coverage.
• Loss Of Income After An Accident: If your truck is in an accident and it takes some time to get your businesses back up and running, your insurance won’t cover the loss of income. You’d want to specifically look into business income insurance or business interruption insurance to cover those gaps.

Additional Types Of Commercial Truck Insurance

As stated before, primary liability truck insurance and general liability truck insurance are the basic requirements needed to drive and follow the rules set by the Federal Motor Carrier Safety Administration (FMCSA). Let’s revisit those again and outline other possible truck insurance policies that are available through an insurance agent:

Primary Liability Truck Insurance

This is needed insurance for anyone who wants to get behind the wheel of a truck. It protects the people and things that are hurt if your truck causes an accident.

General Liability Truck Insurance

Will pay for the damage done to someone on your property or someone’s property while your truck is present. Also covers lawsuits involving libel, slander, and false advertising.

Physical Damage Coverage

This is the policy you will need to cover the damage done to your own truck and equipment in the event of an accident or a disaster. (This cover the blue book replacement costs.)

Motor Truck Cargo Insurance

If you suffer cargo damage through accident, disaster, or getting stranded in an ice storm or traffic jam, this insurance endorsement will protect your commodities.

Bobtail Insurance Coverage

In an accident with just your truck and no trailer attached (also called bobtailing)? This is an easy endorsement to add that covers accidents that happen specifically when the truck is not being used for a job.

Uninsured/Underinsurance Motorists Coverage

If you only have liability insurance and someone without insurance is involved in an accident with you, you may end up being left without a truck or a business if you need to pay those expenses out-of-pocket. The current data says that one in eight drivers on the road is uninsured. (And in some states — I’m looking at you Florida — that rate is over 25%.) This helps you if the person is either uninsured or under-insured for the accident.

Reefer Breakdown Coverage 

A refrigerated truck might have its own equipment and mechanisms to worry about. This specific endorsement to a trucking insurance policy would cover the cost of lost cargo, refrigeration breakdown, or damage of product due to a collision. (Sometimes insurance policies have exclusions. The most commonly seen products excluded from coverage are: frozen foods, seafood, tobacco products.)

How Much Does Commercial Truck Insurance Cost?

Truck insurance costs will vary depending on your need and it’s important to understand that commercial truck policies aren’t cheap. An owner-operator looking for primary liability coverage for his/her employees is looking at an average of $5,000-$7,000 a year in premium charges. (That is the cost paid to the insurance company before deductibles.) However, some plans offering only primary liability can run as little as $21 a month for independent for-hire drivers.

Adding endorsements will increase that premium. Some other factors that may affect your insurance costs are:

• Age
• Driving record
• The age and condition of your equipment
• The types of things you haul
• State requirements
• How far your drivers are driving, etc.

Ways To Save On Commercial Truck Insurance

As with all insurance policies, there are ways to save some money. However, please remember that in the insurance world, cheaper may not be better; it may not have the needed coverage you’re required to have to hit the road. If you are after a specific policy, here are some ways you can get the premiums down:

• Hire drivers with impeccable driving records
• Drive carefully — even a single speeding ticket can affect rates
• Implement safe driving classes and seminars for employees
• Raise your deductibles
• Pay your premium in full each year (insurance companies offer discounts)
• Always keep your payments current
• Be aware of the cargo you are hauling and adjust needs accordingly
• Ask about discounts

When it comes to discounts, you can get a commercial driver’s license (CDL) discount if you have had your commercial driver’s license for over two years and you can get another discount if you’ve been in business for three years or more.

Where To Buy Commercial Truck Insurance

Due to the specificity of trucking regulations and safety requirements, finding an insurance agent and provider familiar with commercial trucking is an important part of your buying process. In general, there are four easy steps for buying insurance: Know what insurance you need, gather your business documents, comparison shop, and purchase! 

Most major insurance agencies offer commercial truck insurance, but according to the Consumer Advocate, the highest rated commercial trucking agencies (based on coverage options, policy strength, pricing, financial rating, and customer experience) were as follows: Progressive, Esurance, and CoverWallet.

Choosing The Right Policy

Protecting your trucking business or yourself as a for-hire trucker means insuring yourself properly. Whether you need primary truck insurance or need to add general liability, insurance doesn’t have to be an extraordinary expenditure — and adding it to your business costs could help you survive the financial burden of an accident or disaster.

An insurance expert will take the time to explain coverage options and walk you through types and choices. Primary is required, general liability might be required or suggested, and any other endorsements will strengthen your protection. Think about your business and contemplate worst-case-scenarios. (In 2017, Oregon had a truck accident where thousands of eels dumped out on to the highway, triggering the fish’s fear response which was to release mucus-like slime over everything in its path…so…that was fun.) Then, make a plan for your business today.