Assured Standard Logo
FREE Quote
Get a Free Insurance Quote Today

    What kind of truck do you have?

    When do you need it?

    Commercial Truck Insurance
    Trucking Coverage for Owner-Operators

    Trucking Coverage for Owner-Operators

    With rising road accident rates and increasing dangers in the trucking industry, insurance for owner operator truckers and business owners is essential. As well as being a legal requirement, trucking insurance can help cover the financial costs of damage to your truck and cargo and pay for the cost of expensive medical fees that may occur. 

    However, the type of insurance you need can vary based on whether you are an owner operator or private carrier. Learning about the different types of trucking coverage can help you decide which options are the most suitable. 

    Why Should Owner-Operators Get Insurance?

    According to the FMCSA insurance filing requirements, all motor carriers must invest in public liability insurance for bodily injury, property damage, and environmental restoration. 

    Freight forwarders will need to have around $750,000 - $5,000,000 worth of coverage depending on commodities transported, while the minimum requirement is $300,000 for non-hazardous freight transported in vehicles weighing under 10,001 lbs.

    In addition, a Household Goods Motor Carrier or a Household Goods Freight Forwarder will need to pay for cargo insurance worth $5,000 per vehicle or $10,000 per occurrence. 

    Since a total of 4,119 people died in large truck crashes in 2019, according to trucking fatality statistics, purchasing fleet auto insurance can help address some of these dangers. Being responsible and buying insurance for your vehicles can protect your business and other motorists on the road. 

    Whether it’s cargo insurance to cover the cost of vehicle fires and theft, physical damage for collisions and rolls, or bobtail insurance to protect truckers returning home, having a safety net for the worst-case scenario can provide you with greater peace of mind. 

    Types Of Trucking Coverage For Owner-Operators

    There are plenty of different types of owner-operator insurance that can help keep safe on the road, and each type comes with its own unique benefits. 

    Fleet Auto Insurance

    For those that own multiple vehicles, fleet auto insurance is beneficial since it provides coverage for owned vehicles used for business purposes as well as personal, non-owned, and hired vehicles that are also used for business purposes. This can help protect you and your employees in terms of financial and legal costs.

    For instance, if an employee causes an accident while driving a company-owned vehicle and this leads to property damage, the cost of this should be covered by your insurance plan. The cost of this insurance is usually determined by the size of your fleet. 

    Owner-Operator Insurance

    If an owner-operator operates under their own authority, they are legally required to purchase auto liability coverage by the FMSCA with a limit between $750,000 to $1 million depending on the requirements of your freight broker as well. 

    For an owner-operator leased on to a motor carrier, the trucking company they operate under is usually required to cover their auto liability insurance. However, this only kicks in when a truck driver is transporting a load or using the truck for business purposes.

    The good news is that it provides coverage when property damage occurs or a third party is injured, even when the driver is at fault. 

    Motor Carrier Insurance

    Another form of insurance for owner operator truckers is motor carrier insurance. Since many carriers use for-hire owner-operators, those who fit under this category can often use the primary liability insurance under their authority. 

    However, a for-hire owner operator may also need to purchase other forms of insurance like non-trucking liability insurance in addition to physical damage coverage for added protection. 

    Private Carrier Insurance

    When it comes to insurance for private carriers or those who haul goods in their own truck on behalf of an employer or company, there are several types of private carrier insurance you should invest in. 

    This includes liability insurance for third-party damage and coverage for physical damage for your own truck repairs. This can take the form of comprehensive insurance, fire, and theft with combined additional coverage or collision insurance. 

    Own Authority Insurance

    If you need to apply for a DOT number and operating authority, you will also need to invest in your own authority insurance coverage. This includes liability insurance between $750,000 to $1,000,000 in terms of coverage for regular cargo or up to $5,000,000 for those transporting hazardous goods. 

    You may also need cargo insurance with limits of up to $100,000 or more depending on the value of the goods you transport. Finally, you may also need to invest in physical damage insurance to help pay for truck and equipment repair if you get into an accident.

    Commercial Trucking Insurance vs. Owner-Operator Insurance

    It’s important to distinguish between commercial trucking insurance and owner-operator insurance. Owner operator trucking insurance is typically designed for someone who manages their own truck as opposed to a company that manages multiple trucks in a fleet. In contrast, commercial trucking insurance is for both large and small fleet owners. 

    In essence, owner-operator insurance is a type of commercial trucking insurance. Some other types of commercial trucking policies include primary liability, physical damage insurance, cargo insurance, underinsured motorist coverage, and more. 

    One benefit of owner operator trucking insurance is that it can be more affordable than other types of insurance for large companies with more fleets while providing enough coverage for your needs. 

    What Is The Cost Of Trucking Insurance?

    The average cost of owner operator truck insurance is between $3,000 and $5,000 per year, provided they are leased to a motor carrier. In contrast, an owner-operator with their own authority will need to pay about $9,000-$12,000 per truck. However, several factors can impact the cost of trucking insurance. This includes: 

    • The number of trucks and drivers in a fleet 
    • The weight and type of cargo you carry, since the more dangerous it is, the greater damage it can cause in a collision
    • The distance vehicles are driven since long-haul trucking can carry more risk than those that travel shorter distances
    • The size, overall value, and model of your truck driven, since the more powerful your truck is, the more it will cost to insure and/or repair
    • The driving history of employees, since truckers with a clean record, will cost less to insure than those with several driving violations under their belt
    • The location of your business, since every state will have their own price points
    • The amount of coverage needed, since higher limits will mean higher yearly or monthly premiums
    • The past claims history of your business, since those with plenty of claims, might need to pay higher premiums  

    Frequently Asked Questions

    To help you understand the basics of owner operator truck insurance, here are some of the most commonly asked questions by business owners. 

    Do truckers need general liability insurance?

    Although general liability insurance isn’t usually a legal requirement, business owners might want to invest in this coverage. This is because it provides financial protection for any injuries and/or property damage you or your employees cause as a result of non-trucking-related business activities. 

    What type of insurance do I need for a semi truck?

    The type of insurance you need for a semi truck depends on your specific situation, but the law requires that you purchase Primary Liability Insurance coverage. Other forms of insurance you may need include motor carrier insurance and private carrier insurance. 

    What is non-trucking liability insurance?

    Non-trucking Liability Insurance is a type of owner operator insurance coverage that protects them against legal claims in the event that a truck is being used for non-commercial reasons when a load is attached or not attached to the truck. 

    What is trailer interchange coverage?

    To cover the cost of physical damage to your trailer being pulled under a trailer interchange agreement, trailer interchange insurance is crucial. This can help provide protection if the non-owned trailer is vandalized, burnt, stolen, or otherwise damaged in an accident. 

    How does cargo insurance work?

    If you are hauling cargo or any type of freight, motor truck cargo insurance can help cover the cost of lost or damaged cargo. Although coverage varies based on your insurance company and specific plan, covered events can include natural disasters, acts of war, piracy, customs rejection, cargo abandonment, and more.

    Final Words

    Although owner operator truck insurance requires you to make regular payments over time, it can be argued that it is well worth it in the event that an accident occurs. Since financial and legal burdens can quickly add up, having this insurance before disaster strikes is crucial. 

    It may seem like a lot, but paying between $3,000 and $5,000 per year, if you are leased onto a motor carrier or paying $9,000-$12,000 per truck if you are operating under your own authority, can help ease the burden of potential expenses down the line.

    For more information on the benefits of commercial truck insurance for your business, feel free to check out our other guides on Assured Standard today!

    assured standard logo
    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.
    Commercial Truck Insurance
    Business Insurance
    Copyright © 2023 Assured Standard. All Rights Reserved.
    cross linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram