Commercial Truck Insurance

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    Commercial Truck Insurance

    Commercial truck insurance encompasses various liability, comprehensive, and collision coverages. They ensure that you have sufficient funds to cover physical damages and body injuries from covered incidents (i.e., road accidents, theft, vandalism). No trucker can operate without adequate coverage.

    The extensive scope of commercial trucking insurance protects policyholders from several liabilities, but not everyone understands policy nuances. Policy contracts often overwhelm first-time truckers. To help you better understand your options, we made an in-depth guide detailing coverage limitations, policy variations, and the best trucking insurance companies.
    Why Commercial Truck Insurance
    Commercial Truck Insurance:

    What You Need To Know

    Commercial Truck Insurance - What You Need To Know
    Commercial trucking insurance includes a specific group of auto insurance policies that protect truckers from various risks they may face on the road, such as collision and cargo theft. Truck insurance generally has different policy variations. However, the two most crucial coverages pay for property damages and bodily injuries.

    Truckers cannot operate without getting commercial insurance for their trucks. Although insurance requirements vary based on the nature and location of your business, the Federal Motor Carrier Safety Administration (FMCSA) generally mandates $750,000 to $5,000,000 worth of liability coverage.

    Of course, note that truck insurance companies will allow you to increase your coverage however you see fit. Again, trucking businesses have varying needs. While brands hauling general household goods can have $750,000 worth of policies, truckers carrying hazardous cargo might need upward of $4,000,000.

    How It Works

    Explore the different commercial truck insurance companies, narrow down your options based on your coverage needs, then apply to your top choice. Wait for the underwriting team to process your request.

    Insurers follow varying criteria when assessing insurability. However, most institutions prioritize truckers with excellent driving records, solid business experience, good cash flow, and high credit scores. Meanwhile, trucking startups with multiple violations and unpaid tickets might fall under the high-risk category.

    Once your insurer approves your policy, you’ll receive an official offer. Your policy contract should indicate specific terms of the agreement, including the annual premiums, claim limitations, covered incidents, and add-on coverages, among other details.

    After this, you’re officially insured. Pay your premiums on time to ensure that your policy stays active 24/7/365.

    If you, your drivers, trucks, or business sustains damage from a covered incident, file a claim. Most insurers take less than a week to process claims. If the underwriting team approves your claim, you should receive sufficient funds.

    Note: Check your policy’s deductibles. Many commercial truck insurance companies set $500 deductibles, which policyholders would have to shoulder before receiving compensation for their claims.
    Requirements For Commercial Truck Insurance
    Don’t blindly jump at the first cheap commercial truck insurance offer you get. Keep in mind that you have to meet the minimum coverages set by your state and the FMCSA. Overlooking the mandated guidelines has several consequences, from license suspension to expensive legal charges.

    As we mentioned above, the FMCSA requires $750,000 to $5,000,000 worth of coverage. However, how much should you get? Your mandated coverage needs generally depend on your type of freight, which include the following:
    Type of Freight
    Minimum Liability Coverage
    Semi-trailer freight truck
    $750,000 to $5,000,000
    Tow truck
    $750,000 to $1,000,000
    Box truck
    $750,000
    Pickup truck
    $300,000
    Non-hazardous freight <10,001 lbs.
    $300,000
    Non-hazardous freight >10,001 lbs.
    $750,000
    Oil tanks by private/for-hire carriers
    $1,000,000

    Importance Of Commercial Truck Insurance

    Importance Of Commercial Truck Insurance
    Importance Of Commercial Truck Insurance
    Many truckers avoid commercial semi-truck insurance requirements so they wouldn’t have to spend so much on premiums. However, insurance fees are a small price to pay for liability protection. You should never skimp on commercial insurance for your trucks because they:

    Help You Avoid Lawsuits

    Although trucking repairs come with a steep price, they don’t hold a candle compared to the legal liabilities of road accidents. Many trucking startups go bankrupt after just one lawsuit. Most repairs only cost a few grand at most, but attorney fees and settlement charges could set you back by $15,000 to $20,000.

    Considering the thousands of dollars in potential losses, the survival of your business following road accidents depends on your policy. So, don’t skimp on coverage. Generally, your policy should have sufficient coverage to pay for your trucks, driver’s hospital bills, cargo damages, and third-party damages.

    Provide Financial Protection

    Commercial trucking insurance covers a broad range of third- and first-party financial liabilities. Apart from vehicular repairs and replacements, they also compensate for bodily injuries, cargo damages, and legal settlement charges. If you have insufficient coverage, you’ll have to pay these bills out of pocket.

    Cover Damages Caused To Others' Property

    If you get into a road accident, you will be held responsible for any damages and injuries you cause to the other parties involved. At-fault motorists with insufficient insurance could face several legal charges.

    However, you don’t necessarily have to pay for third-party property damages yourself. As long as you abide by the state-mandated coverage needs, you shouldn’t face any issues resolving third-party damages — your insurer will settle your liabilities.

    What Commercial Truck Insurance Covers

    Commercial trucking insurance coverages vary on a case-by-case basis. For instance, while the cheapest commercial truck insurance options only offer general third-party liability protection, customized policies loaded with add-ons also cover first-party property damages.

    However, standard coverages typically have the same terms and conditions. Understanding the scope and limitations of truck insurance will help you determine if you need extra coverages or not.

    Who Is Covered Under A Policy?

    Truck insurance policies cover the designated driver and passenger/s, along with the involved third parties — like pedestrians and motorists. Liability coverage also applies to third-party property damages. If you opt for property damage coverage, your policy can also pay for your insured vehicle’s repairs.

    What Are The Things Covered?

    Commercial truck insurance can help pay for first- and third-party damages following covered incidents, such as:
    Accidents
    Truck insurance covers a broad range of collision and non-collision accidents. Most policies help truckers pay for bodily injuries and property damages, but more comprehensive policies also cover first-party repairs.
    Natural Calamities
    If you or your drivers are ever caught in a fire, cyclone, storm, flooding, or earthquake, comprehensive insurance will help pay for vehicular damages.
    Theft and Vandalism
    Comprehensive insurance policies cover theft and vandalism to the insured vehicle, but they don’t pay for the missing items inside. Generally, avoid carrying high-value belongings in your truck.
    Personal Accident Coverage
    Truck insurance with personal accident coverages can help pay for treatment and recovery if you or your insured driver sustain injuries from covered incidents. Pair this policy with an extensive health insurance plan for best results.
    Third-party Losses
    General liability insurance protects policyholders from the financial and legal liabilities associated with third-party damages and injuries.
    Towing Disabled Vehicle
    Many commercial truck insurance companies provide free roadside assistance.

    What Are The Things Not Covered?

    Unfortunately, commercial truck insurance companies cannot shoulder all the risks and liabilities your business faces. Claims often get rejected if they involve the following:
    Drunk Driving
    Although some policies approve claims from at-fault motorists, standard truck insurance policies typically reject cases involving drunk driving. Remember: DUI is a punishable offense.
    Driving without License
    If you opted for a Loss of License add-on coverage at the start of your policy, you could still file claims even if you accidentally lost your license. However, this coverage does not extend to unlicensed individuals operating commercial trucks.
    Contributory Negligence
    Standard truck insurance generally doesn’t approve claims from at-fault clients, but some add-on coverages provide limited bodily injury liabilities involving contributory negligence.
    Consequential Losses/Damages
    General liability doesn’t cover consequential losses/damages. However, adding cargo insurance to your policy ensures that your freight is protected from collision and non-collision accidents.

    What Are The Types Of Trucks Covered?

    Commercial trucking insurance coverages, limitations, and conditions vary based on the vehicle you wish to insure.
    Pickup Trucks
    If you don’t use your pickup truck for commercial purposes, you’ll only need a standard auto insurance policy.
    Cement Mixers
    Standard liability insurance helps pay for any damages your cement mixer might do during operations.
    Tow Trucks
    Add on-hook coverage to your liability insurance so that your hauled vehicles are also protected.
    Box Trucks
    Apart from standard liability insurance, also get cargo insurance so that you can file claims if your cargo sustains damage during trips.
    Dump Trucks
    Dump trucks typically cost more to insure because their size leaves them prone to accidents.
    Tractors & Semi-trucks
    Semi-trailer trucks pay more for coverage depending on the cargo they haul — regardless of whether they get cargo insurance or not.

    What Are The Types Of Coverage Available?

    Truckers can customize their policies to match their business’s insurance needs, budget, and fleet size, among other factors.
    General Liability
    General liability insurance protects you from the financial liabilities involved with third-party bodily injuries and property damage.
    Medical Payments
    Liability insurance covers third-party damages, but personal injury protection coverages extend to you, your drivers, and passengers.
    Motor Truck Cargo Coverage
    Motor truck cargo coverage protects your vehicle and cargo from any damages while in transit, loading, or unloading.
    Non-Trucking Liability
    NTL covers collision and non-collision accidents that occur while you're using your truck for non-commercial purposes.
    Physical Damage
    Adding physical damage to your liability insurance policy ensures that your coverage extends to first-party vehicular damages as well.
    Primary Liability
    At-fault motorists can file claims on third-party property damages and bodily injuries with primary liability.
    Rental Reimbursement with Downtime
    Rental Reimbursement with Downtime compensates up to 30 days’ worth of rental fees while your rental vehicle is under repair for covered damages.
    Trailer Interchange
    If your fleet operates on a trailer interchange, this coverage protects you from various first- and third-party property damages.
    Uninsured/Underinsured Motorists
    Use your uninsured or underinsured motorist coverages if you get involved in a road accident with someone who has little or no auto insurance.

    How Much Commercial Truck Insurance Costs?

    How much does commercial truck insurance cost? The biggest mistake most newbie truckers commit is haphazardly agreeing to the first policy quotation they get. No matter how affordable the premiums might seem, always explore your options.

    Truck insurance premiums typically vary based on your preferred insurer’s risk tolerance. Widely known commercial insurers often charge the industry average, but they also have stringent application requirements. Truckers with bad driving records might not qualify.

    Meanwhile, commercial trucking insurance providers specializing in high-risk clients have minimal requirements. However, they charge higher premiums. From an insurer’s point of view, it’s very risky to insure truckers with high chances of getting into road accidents.

    What Affects The Cost Of Commercial Truck Insurance Policies?

    Although commercial truck insurance companies have varying levels of risk tolerance, they typically assess clients based on similar factors, which include:
    Cargo
    Your truck insurer will assess the goods you regularly haul, whether you get cargo insurance or not. You’ll fall either under hazardous or non-hazardous. Note that truckers hauling hazardous, high-value items generally need more coverage.
    Driving History
    Having unpaid tickets and multiple traffic violations spikes premiums. Insurance providers will use your driving records to gauge your likelihood of getting involved in road accidents. If you own a fleet, your insurer will also assess the drivers you hire.
    Operating Radius
    Spending long hours on the road exposes you to more hazards. For this reason, long-distance truckers driving hundreds of miles every day typically need more coverage. Most long-haulers drive anywhere from 250 to 1,000+ miles per trip.
    Type of Covered Vehicle
    Your insurance policy generally needs sufficient funds to pay for repairs and parts replacement, so high-value, exotic trucks typically need more coverage.
    Coverage and Deductible Amount
    Customize your coverage limits and deductibles to get better premiums. Insurance policies with lower coverage limits and higher deductibles generally cost less — especially if you pay the premiums annually.
    Storage of the Vehicle
    Don’t overlook your parking space. Insures typically reward clients who care for their trucks 24/7 with better rates. Remember: insurance covers theft and natural disasters. As such, make sure your parking space is in a secure, guarded area with surveillance cameras and guards.

    Best Commercial Truck Insurance Companies

    Who has the best commercial truck insurance policies? There are dozens of truck insurance companies in the market. Although the freedom to choose any insurer you want feels liberating, first-timers might feel overwhelmed by the sheer number of options.

    To give you a good starting point for insurance shopping, we made a quick comparison review of the most reputable, widely recognized truck insurers in the country:

    Progressive

    Progressive undoubtedly ranks among the ​​best trucking insurance companies around. They have a solid history dating back to the 1930s, process claims swiftly, and provide coverage to truckers in all states.

    However, what truly sets them apart from the rest is their extensive list of coverages. Truckers have total control of their policies. You can customize your policy limitations based on your budget, fleet size, business nature, and occupational hazards.
    Pros
    • Extensive coverage options
    • 24/7/365 customer support
    • Multiple opportunities for discounts
    Cons
    • Industry-high insurance premiums
    • Business insurance policies only available through third-parties

    Sentry

    Sentry serves as the one-stop shop for all your business insurance needs. As a long-standing mutual insurance company, they have the resources to offer various policies, from commercial semi-truck insurance to general liability insurance policies.

    Also, clients can feel at ease knowing Sentry is backed by over a century’s worth of industry experience. They’ve been in business since 1904 and have withstood several eras of economic depression, so you can count on them to protect you for many more decades.
    Pros
    • Reliable, proven financial strength
    • Excellent agent support
    • Multiple opportunities for discounts
    Cons
    • No online applications and quotations
    • Doesn't offer free roadside assistance

    The Hartford

    Hartford focuses on long-term protection. Not many commercial truck insurance companies can match their extensive programs geared toward driver safety, road accident prevention, and defensive driving. Moreover, partaking in these classes gets you massive discounts.

    As for financial strength, this 200-year-old company boasts one of the best reviews on the market. They have A+, A1, and A+ ratings from Standard & Poor's Financial Rating, Moody's Financial Rating, and AM Best Financial Rating, respectively.
    Pros
    • Excellent financial ratings
    • Extensive defensive driving classes
    • Features group benefits
    Cons
    • Lack of coverage options
    • Minimal policy customizability

    Frequently Asked Questions

    Do you still find commercial truck insurance confusing? We have you covered! Get a better understanding of commercial trucking insurance by going through some questions first-time truckers and policyholders commonly ask.

    How does cargo insurance work?

    Cargo insurance covers first-party damages to your cargo. It typically pays for freight damages from vehicular accidents, natural disasters, cargo abandonment, theft, acts of war, or customs rejection.

    What is a bobtail policy?

    Bobtail insurance protects policyholders while operating their semi-trucks for non-commercial purposes. It covers most incidents wherein the insured vehicle is not hauling cargo. Pair this coverage with your semi-truck insurance policy.

    What is the difference between cargo and freight insurance?

    Freight insurance typically protects the person or organization overseeing the dispatch of goods from financial losses, while cargo insurance pays for damages the insured cargo sustains.

    Commercial Truck Insurance In A Nutshell

    Overall, commercial trucking insurance protects your business from the financial liabilities stemming from unforeseen incidents, such as collision accidents, criminal activities, and natural disasters.

    No trucker should hit the road without sufficient coverage. Driving underinsured is illegal. Not only will you compromise your and your passengers’ safety, but you could also end up with hefty fines and a suspended driver’s license.

    Learn How Truck Insurance Coverage Works. Get Free Trucking Insurance Quote.

    Get Quote Today!
    Do you still have some unanswered questions about commercial trucking insurance? Assured Standard has you covered! Check our blog and resources page for more helpful pieces explaining the step-by-step process of insuring trucking businesses.

    Get a Free Commercial Truck Insurance Quote Today. 
    Call us at (888) 965-3002.

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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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