High commercial truck insurance premiums make it challenging for truckers to turn a profit. The rising cost of goods and the increased 6% inflation rate spiked policy premiums to an all-time high. However, several other factors affect insurance costs. Understanding these variables will help you minimize the costs of protecting your fleet with insurance.
One of the most important factors that insurers consider when setting premiums is the vehicle’s make and model. Commercial trucks fall under different categories. Learning more about the different types of commercial trucks, their specific purposes, the unique risks they face, and the extra coverage they need will give you helpful insights into truck insurance policies.
Average cost: $600 per annum
Coverage options:
Bobtail trucks refer to cargo-free, freight-carrying vehicles. Since these trucks typically carry cargo, truckers only drive bobtail trucks outside of hauling operations. Also, don’t confuse bobtailing with deadheading. Although bobtailing and deadheading refer to freight-carrying trucks without cargo, the latter has an empty trailer attached, and the former does not.
Since bobtail truck insurance covers non-business-related road accidents, maintaining excellent driving records will minimize premiums. Pay off your tickets, avoid getting into accidents, and reduce the number of hours your truckers drive without hauling cargo.
Average cost: $3,000 to $5,000 per annum
Coverage options:
Box trucks rank among the most common types of commercial trucks. There are currently around 2 million class 6 and class 7 box trucks in the U.S. — 800,000 and 1.3 million, respectively.
Their popularity stems from versatility. Unlike semi-trailers, they’re not exclusive to trucking service providers. Business owners use them for various tasks, such as delivering perishable goods, hauling medium-sized cargo, and transporting appliances.
One way to reduce your box truck insurance premiums is to map out your daily routes. Truckers that drive varying distances daily expose themselves to more risks. As such, insurers will reduce your policy costs if you prove that you regularly take safe, secure routes.
Average cost: $8,000 to $12,000 per annum
Coverage options:
Dually trucks are six-wheeled pickup trucks. These class 2 to 3 vehicles have two wheels in the front and four in the back that share one axle. Some of the best-selling dually trucks include the Hennessey VelociRaptor 6x6, Mercedes-Benz G 63 AMG 6×6, and Ford F-450.
The extra pair of wheels gives them extra stability while towing. Truckers can use these for regularly hauling and towing motorcycles, trailers, construction materials, and medium-sized appliances.
A quick way to get lower dually truck insurance premiums is to opt for less expensive options. Dually trucks come with a steep price tag. For instance, the Hennessey VelociRaptor 6x6 and Mercedes-Benz G 63 AMG 6×6 would already set you back by $350,000 and $500,000, respectively. Insuring these pieces costs around $20,000 to $30,000.
Average cost: $4,000 to $14,000
Coverage options:
Dump trucks are class 8 vehicles that have a movable trailer bed. This feature enables truckers to load and unload thousands of pounds of cargo with the push of a button. Most dump trucks even have a 15,000-pound capacity, so it wouldn’t make sense to move massive amounts of cargo by hand.
Truckers typically use dump trucks for heavy-duty hauling. Miners can transport coal, contractors can deliver construction materials, and garbage collectors can deliver waste to landfills.
To minimize the cost of your dump truck insurance, specify your cargo. Although insurers charge hefty prices for trucks carrying hazardous items, they give discounts to those hauling relatively low-risk goods.
Average cost: $560 per annum
Coverage options:
As its name suggests, a food truck is a motorized vehicle designed for selling food items. Although food trucks vary in sizes, they often include class 1 and 2 vehicles like step vans and cargo vans.
Since food trucks typically stay parked in just one or two spots every day, they don’t face many risks of getting into collision accidents. They usually only drive to and from their respective spots. As such, the most significant threats that food trucks face include non-collision accidents like fire and theft.
Minimize your premiums by detailing your daily stops and showing your vehicle’s security measures. Prove that you run a safe, secure, and anti-theft shop. Otherwise, insurers might charge you a higher premium to offset the increased risk of suffering losses.
Average cost: $1,578 per annum
Coverage options:
The pickup truck is a light-duty class 1 vehicle. It stands as the most commonly used truck for commercial and private use. Many truckers use these as their daily drivers. Statistics even show that car manufacturers sold around 3 million units in 2020, representing 20.57% of all operating vehicles in America.
Since pickup trucks heavily rely on the vehicle’s market value, opt for affordable options. High-end trucks like the Dodge RAM 2500 Limited or Ford F-350 SD Limited will both cost over $2,200 per annum to insure.
On the other hand, less expensive options like the Toyota Tacoma or Ford F-150 only cost $1,000 annually. Also, they have more affordable parts. As such, truckers wouldn’t have to worry about their insurers unfairly increasing policy premiums after a claim.
Average cost: $5,000 per annum
Coverage options:
Tow trucks have special equipment that enables them to haul various vehicles. Standard tow trucks with a hook and crane typically carry damaged vehicles, while flatbed tow trucks haul high-value or brand-new units.
Insurers typically charge high tow trucks higher based on their cargo. Those that offer roadside assistance can minimize their premiums to $4,000, but those towing luxury or repossessed vehicles might pay more.
Also, consult your insurance provider about their risk tolerance. High-risk trucking service providers should look for insurers specializing in the cargo they carry. Apart from lower rates, these businesses also offer assistance programs.
Average cost: $7,680 to $11,760 per annum
Coverage options:
Requirements:
The state requires all truckers to carry around $750,000 worth of liability insurance per semi-truck. However, the coverage requirement varies depending on your cargo. Truckers moving non-hazardous cargo in class 1 and 2 vehicles only need $300,000, while private truckers carrying hazardous, toxic items might need up to $5 million of insurance.
However, truckers should expect current insurance rates to be relatively higher than the previous years’. Apart from higher inflation rates, the increased cost of repairs, pricier trucks, and the rising number of claims all cause the rates to skyrocket.
Fortunately, there are several ways to minimize your premiums. Insurance providers assign premiums based on risk assessments, so truckers get lower rates if they prove that their truckers face few risks on the road. Hire reliable drivers, participate in road safety courses, and, of course, avoid getting into accidents.
Don’t worry if some commercial trucking terms still confuse you — we have you covered! Get a better understanding of the industry by going through the most commonly asked questions about commercial trucks.
Primary business vehicles would need commercial insurance. For instance, taxi cabs, tow trucks, and delivery vans are commercial vehicles because they play integral roles in their respective businesses’ daily operations.Â
In trucking, deadhead miles refer to the distance wherein the vehicle does not carry cargo or is not attached to a trailer. Truckers often deadhead when driving to and from pickup sites, filling up on gas, or picking up cargo.
Physical damage consists of collision and non-collision insurance. Collision coverage pays for the first-party damages sustained from collision accidents, while the latter covers non-collision incidents like fire and theft. On the other hand, bobtail insurance covers accidents wherein the truck does not have load or cargo attached.
Insurers often compute different cargo insurance values per shipment. However, you can get a general estimate by adding freight costs to the declared invoice value, adding an extra 10% for miscellaneous expenses, then multiplying the result by your policy rate.
Although you don’t need insurance to purchase a truck, you will need adequate coverage to operate it. The government typically requires at least $750,000 to $1,000,000 worth of liability coverage, but you might have to pay more depending on the nature of your trucking business.
Overall, the rates of truck insurance policies vary based on the insured vehicle. Different types of commercial trucks have varying insurance needs, so insurers need to increase their premiums to offset the added risks. Although many of these risks are out of your control, you can adjust factors involving the hauled cargo, hauling times, and distance traveled.
Also, work with insurers that specialize in the truck model you drive. Assess your trucking business’ unique coverage needs, then see which commercial truck insurance providers can provide them at an affordable cost.
Are you on the fence about coverages to include in your truck insurance policy? Let Assured Standard shed some light on the topic! Check out our piece explaining the basic coverages of commercial truck insurance policies.
