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    Commercial Truck Insurance Requirements: A Quick Guide for Trucking Companies

    Commercial Truck Insurance Requirements: A Quick Guide for Trucking Companies

    For trucking companies, applying for truck insurance can be a highly complicated process. 

    Commercial truck insurance requirements can vary greatly depending on the type of goods you transport, whether you transport goods within your state or across state borders, and the weight of your truck. 

    That said, understanding the basics of truck insurance can give you a better idea of the insurance policies you may need to provide legal and financial protection for your business. 

    Commercial Truck Insurance Defined

    At the bare minimum, the Federal Motor Carrier Safety Administration (FMCSA) requires all commercial trucks to obtain public liability insurance in order to get their operating authority or MC number. This includes both bodily insurance and property damage insurance. 

    Understanding State and Interstate Regulations

    Minimum commercial truck insurance requirements can exceed the limits set by FMCSA if you are traveling interstate. Hazardous and non-hazardous goods also have different regulations:

    • At least $300,000 of coverage for non-hazardous freight in vehicles under 10,000 lbs
    • Between $750,000 to $5,000,000 of coverage for freight in vehicles over 10,000 lbs
    • At least $5,000 of coverage per vehicle in cargo insurance for household goods
    • At least $10,000 of coverage per occurrence in cargo insurance for household goods

    Necessary Commercial Truck Policies  

    Although there are federal minimums for commercial truck insurance policies, businesses looking for extra protection should also consider investing in other types of insurance. With a total of 4,119 fatalities due to large truck crashes in 2019, unexpected accidents can occur anytime. 

    Before choosing types of truck insurance for your company, it’s worth comparing several quotes from different insurance companies. Bundling together several insurance policies can usually lead to greater cost savings down the line and make it easier to file and keep track of any claims. 

    Primary Auto Liability Insurance

    Arguably one of the most important types of commercial truck coverage, primary auto liability insurance provides coverage for the cost of treating injuries and repairing damage to other people or property. If your truck driver accidentally harms a passenger in another car during a collision or hits a fence, this type of insurance will kick in. 

    Motor Truck General Liability Insurance

    Motor truck general liability insurance provides broad coverage for for-hire truckers and motor carriers. It can provide coverage for personal or advertising injury, physical damage to premises rented by your company, medical treatment for customers on your property, and wrong delivery of products that cause damage. 

    Motor Truck Cargo Insurance

    Motor truck cargo insurance is a form of commercial truck coverage that can be useful for interstate owner-operators. It helps cover the cost of loss or damage to cargo that is a result of a fire, collision, or other incidents during transit and loading or unloading of goods. The cost of this can vary significantly depending on the type of goods you transport. 

    Physical Damage Coverage

    There are two main types of physical damage insurance, namely comprehensive and collision. Comprehensive coverage covers damage done to your truck from physical damage unrelated to a collision, such as natural causes, damage from contact with an animal, and theft. In contrast, collision coverage covers damage related to hitting another car or object.

    Trailer Interchange Agreement Insurance

    For owners that hire non-owned trailers, trailer interchange insurance provides a type of physical damage coverage for the trailer. Some instances include damage to the trailer due to theft, vandalism, collision, fire, or an explosion. This written agreement helps protect both parties throughout the period during which the trailer is being transported. 

    Under-Insured Motorist Coverage

    Underinsured motorist coverage can be beneficial for trucking companies. If you suffer an accident and the third-party motorist involved doesn’t have sufficient insurance coverage of their own, this can help provide compensation and cover their losses in addition to yours. This can include any medical bills, lost wages, and more. 

    Bobtail Insurance

    Owner-operators who already have primary auto liability insurance may not need bobtail insurance. However, those leased onto a motor carrier may need bobtail insurance to cover situations when a load has already been delivered, and a commercial truck is being used for non-business purposes. 

    Workers’ Compensation Coverage

    A workers’ compensation insurance policy provides protection for trucking employees that can be impacted due to a work-related accident. It can cover the cost of lost income or wages during the recovery period, the cost of rehabilitation, provide death benefits, and pay for medical expenses. Almost every state requires workers’ compensation for employees. 

    Frequently Asked Questions

    Why is commercial truck insurance so expensive? 

    Commercial truck insurance costs are high simply because the insurance provider is incurring many risks: claims involving commercial vehicles are typically more expensive than claims involving personal vehicles. 

    What needs to be displayed on commercial vehicles?  

    Commercial vehicles need to display the legal name or single trade name of the operating company. The motor carrier identification number (provided by the Federal Motor Carrier Safety Administration) also needs to be displayed, preceded by “USDOT.” 

    Is cargo insurance required? 

    Cargo insurance is typically not required, but it is recommended to protect goods from exposure to risk. 

    What is trucking physical damage insurance?

    Trucking physical damage insurance covers fees incurred when fixing or replacing damaged tractors. Rigs are also covered, whether operating for personal or business use.

    What is the difference between cargo and freight insurance?

    Freight insurance is the additional protection that covers your cargo in case of damage or loss. On the other hand, cargo insurance keeps you calm and confident about shipping. 

    As you do more research into these various commercial truck insurance policies, make sure to look at the financial strength ratings of insurance companies, whether they offer 24/7 claims reporting, customer reviews, and deductible amounts that can help you make the right decision. 

    Investing in comprehensive trucking coverage can provide you with greater peace of mind during a worst-case scenario.

    Read on to learn more about other commercial truck insurance policies to protect your business on Assured Standard today! 

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    Assured Standard will protect your business with the right insurance, depending on your needs. Now more than ever, it’s crucial to have the right general liability insurance experts on your side. Protecting the future of your business starts today.
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