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Truck Insurance Basics: What You Need To Know

Truck Insurance Basics: What You Need To Know

In the 2018 Traffic Collision Facts Report, there are about 130,000 individuals injured in truck collisions. This data also includes thousands of people killed in accidents. For this reason, getting truck insurance is already required by the law.

If you are in the trucking business, here’s what you ought to know about trucking insurance:

What Should Trucking Insurance Cover

1. General Liability Insurance

General liability insurance covers third-party accidents such as customer injuries, property damage, and copyright infringement. It helps in paying for medical, judicial, and funeral expenses.

2. Truck Cargo Insurance

Cargo insurance covers the cost of goods that were damaged due to fortuitous events while being transported. In cases where goods are lost or stolen, the insurance coverage will answer for their costs.

3. Physical Damage Coverage

The coverage pays for the cost of injury due to fire, collision, theft, or vandalism suffered by the policyholder or the truck owner. This is different from general liability insurance, wherein only costs related to third-parties are covered.

4. Rental Reimbursement And Downtime Coverage

By purchasing this policy, you are eligible to use a rental truck if drivers cannot use your company-owned truck after an accident.

An insurance company can offer separate coverage for rental reimbursement and downtime coverage. The latter pays for the rental truck cost, and the former entitles you to receive the lost income if you can’t have the rental truck.

5. Trailer Interchange

Having trailers that you don’t own will require you to have trail interchange insurance under a trailer interchange agreement. If this trailer gets damages from fire, collision, explosion, or theft, your physical damage won’t pay for it since you don’t own it in the first place. Instead, the trailer interchange pays for the costs.

Factors That Affect Truck Insurance Cost

Truck insurance is costly. Reducing its cost can yield major savings. While there are ways that you can do to achieve a lower premium, some factors are outside of your control. Some of these factors are related to demographics, driving habits, and trucks.

1. Your Age And Gender

Insurers generally charge more if a driver is too young and with less experience. As to gender, women are not usually linked to road accidents. But some insurers look into another perspective to determine the cost of the insurance.

2. Quality Of Your Truck

Insurers are concerned about the overall safety of the vehicle. Trucks with high quality are more likely to qualify for discounts.

3. Your Credit Score

A lot of insurers take into account your credit score in determining the insurance rate. Higher scores mean lower premiums. Paying your obligations on time can make a huge difference. 

4. Age Of The Truck

Between a newly purchased vehicle and an older one with issues, the latter is more likely to get involved in an accident. The repair cost is higher too.

5. Driving History

Having a bad record might result in higher premiums or worse, not even getting the chance to purchase insurance. Traffic violations, accidents, claims, and other histories of bad driving habits will be part of your record.

Strategies That Can Help You Get Lower Insurance Rates

1. Create Safety Policies

If you have written safety policies, you can make the rules clear for every employee. This will enforce your drivers to follow protocols and eventually avoid fines while at work.

Truck insurance companies are also checking your policies. They are particular with risk reduction and management. Once they see that you have a detailed and well-implemented set of policies, you’ll be rewarded with lower insurance premiums. 

2. Hire Experienced Drivers

The nature of the drivers’ job is risky. To determine your insurance premiums, insurance companies focus on how you reduce the risks by hiring seasoned drivers. Look for applicants with good driving records, it’s what insurers consider the most.

3. Improved Credit Score

The cost of the premium depends on your credit score too. So, pay your bills on time to save money on truck insurance. 

4. Get A Quote First

Rates may differ depending on the model of the vehicle. To understand how much each model is, communicate with an insurance agent first to ask how much a certain truck can cost to insure it. 

5. Have Pre-Trip Vehicle Inspections

The purpose of pre-trip inspections is to ensure that your trucks are ready to hit the road. It means that all parts of the trucks are functioning well.

Frequently Asked Questions:

What types of insurance are necessary for commercial trucks?

Essential types of truck insurance include Primary Liability Insurance, Physical Damage Coverage, and Motor Truck Cargo Insurance.

What is Primary Liability Insurance?

Primary Liability Insurance covers damages and injuries to other parties when a commercial truck is involved in an accident.

What does Physical Damage Coverage provide?

Physical Damage Coverage offers protection for your own vehicle against loss or damage due to events like accidents, theft, or fire.

What is the role of Motor Truck Cargo Insurance?

Motor Truck Cargo Insurance protects the transporter for their responsibility in the event of damaged or lost freight.

How are insurance premiums determined for commercial trucks?

Premiums are determined by factors like the type of cargo, the truck's value, the driver's driving record, the geographical area of operation, and the amount of coverage selected.

Truck Insurance Is A Necessity

Except for the law requirement, there are plenty of reasons why commercial truck insurance is a must for every trucking business and even for owner-operators. It acts as a protection for your cargo and others’ property too. Moreover, It allows you to build the trust of your customers.

Interested in understanding how the fundamentals of truck insurance translate into costs? Explore our informative blog post on average truck insurance cost to gain a comprehensive view of what influences the pricing. It's a perfect companion to this guide, offering practical insights that could affect your decision-making.

As early as today, get the best truck insurance for your business. Review your coverage and customize it to best fit your kind of work.

Get the best insurance advice when you contact Assured Standard today!

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