What you need to know about commercial truck insurance
Insurance for commercial trucks includes a variety of liability, comprehensive, and collision coverages. The policy ensures that you have sufficient insurance coverage to cover bodily injuries and physical damages caused by covered incidents (i.e., road accidents, thefts, vandalisms). Without adequate coverage, truckers cannot operate.
It is important to understand the nuances of commercial trucking insurance because it protects policyholders against several liabilities. First-time truckers often feel overwhelmed by policy contracts. Our guide details the limitations of coverage, variations in policies, and the best companies that provide trucking insurance in an effort to help you better understand your options.
Commercial truck insurance
Truckers are protected by commercial trucking insurance from various risks they might encounter while driving, such as collisions and cargo theft. There are generally different types of commercial truck insurance policies. However, property damage and bodily injury are the two most important coverages.
Without commercial insurance, truckers cannot operate. The Federal Motor Carrier Safety Administration (FMCSA) generally requires $750,000 to $5,000,000 in liability insurance coverage, depending on your business type and location.
The truck insurance companies could also be willing to allow you to increase your coverage in whatever way you may deem necessary. It is important to remember that each trucking business has its own unique needs. For example, brands hauling household goods might need a $750,000 policy, but truckers hauling hazardous cargo may need policies worth up to $4 million.
How it works
Identify your coverage needs, narrow down the available commercial truck insurance companies, then apply to the company you decide to work with. You need to wait for your request to be processed by the underwriting team.
When determining insurability, insurers use a variety of criteria. It should be noted, however, that most institutions prioritize truck drivers with excellent driving records, good business experience, a strong cash flow, and high credit scores. Startups in the trucking industry with offenses such as multiple violations and unpaid traffic tickets can be considered high-risk.
A formal offer will be sent to you once your insurer has approved your policy. Policy contracts should detail specific terms like annual premiums, claim limitations, covered incidents, and additional coverages.
You are now officially insured. Stay on top of your premiums to ensure that your policy remains active at all times.
In the event that your drivers, trucks, or business sustains damage due to a covered incident, you will need to submit a claim. Insurers usually process claims in less than a week. You should receive sufficient funds if your claim is approved by the underwriting team.
Note: Make sure you know what your deductibles are. A typical commercial truck insurance policy will impose a $500 deductible, which policyholders will have to pay first before receiving compensation.
Insurance requirements for commercial trucks
Make sure you do not blindly accept the first cheap truck insurance offer you receive. Remember to comply with your state’s and FMCSA’s minimum coverage requirements. The consequences of disregarding the mandated guidelines are numerous, ranging from license suspension to costly legal action.
According to the FMCSA, coverage levels must range from $750,000 to $5,000,000. The question is, how much should you get? The type of freight you handle determines your mandated coverage needs, which include:
| Type of freight | Minimum liability coverage |
| Semi-trailer freight truck | $750,000 to $5,000,000 |
| Box truck | $750,000 |
| Non-hazardous freight <10,001 lbs. | $300,000 |
| Tow truck | $750,000 to $1,000,000 |
| Non-hazardous freight >10,001 lbs. | $750,000 |
| Oil tanks by private/for-hire carriers | $1,000,000 |
| Pickup truck | $300,000 |
Why commercial truck insurance is so important?
To avoid paying high premiums for commercial semi-truck insurance, many truckers avoid the required coverage. Nevertheless, protection from liability is worth the small cost of insurance. Never skimp on your truck’s commercial insurance because they:
Protect you from lawsuits
Despite trucking repairs being expensive, they pale in comparison to the legal liabilities associated with road accidents. A single lawsuit can bankrupt a trucking startup. Generally, repairs cost a few grand at most, but settlement charges and attorney fees could cost anywhere from $15,000 to $20,000.
With thousands of dollars in potential losses, your business is dependent on your insurance policy after a road accident. Don’t cut corners on coverage. A typical policy should cover your trucks, hospital bills for your driver, cargo damage, and third-party liability.
Ensure financial protection
There are a variety of financial liabilities covered by commercial trucking insurance, including those of third parties and first parties. They also pay for bodily injuries, cargo damage, and legal settlement costs in addition to vehicular repairs and replacements. These bills will have to be paid out of pocket if your insurance is insufficient.
Coverage for damages caused to others property
Any damages or injuries you cause other parties in a road accident are your responsibility. A motorist who is at fault and does not have sufficient insurance could face several legal repercussions.
Damages to third-party property, however, do not necessarily have to be paid by you. You should not have any problems resolving third-party damages as long as you follow the state-mandated coverage requirements – your insurer will handle it.
Coverage under commercial truck insurance
Insurance coverages for commercial trucks vary from one company to another and depending on each case. 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.
Commercial truck insurance policies with add-ons cover first-party property damage in addition to general third-party liability, unlike cheaper options that only offer general third-party liability protection.
A standard coverage, however, usually comes with the same terms and conditions. You can determine if you need extra coverages by understanding the scope and limitations of truck insurance.
Who is covered by the policy?
The truck insurance policy covers both the driver and passenger, as well as any third parties involved, such as pedestrians and motorists. Damages to third-party property are also covered by liability coverage. Your policy may also cover the repairs of your insured vehicle if you opt for property damage coverage.
What is covered in the policy?
The following incidents are covered by commercial truck insurance:
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 | You can get treatment and recovery coverage from truck insurance if you or your insured driver are injured in an incident covered by the policy. It is best to combine this policy with comprehensive health insurance coverage. |
| Natural calamities | A comprehensive insurance policy will cover vehicular damages caused by fire, cyclone, storm, flooding, or earthquake. |
| Accidents | Accidents involving trucks, both collisions, and non-collisions, are covered by truck insurance. A trucker’s insurance policy typically covers bodily injuries and property damage; however, more comprehensive policies also cover repairs for third parties. |
| Theft and vandalism | Theft and vandalism to an insured vehicle are covered under comprehensive insurance policies, but stolen items inside the vehicle aren’t covered. Carrying high-value belongings in your truck is generally not recommended. |
| Towing disabled vehicle | Roadside assistance is often provided for free by commercial truck insurance companies. |
| Third-party losses | The purpose of general liability insurance is to protect policyholders against financial and legal obligations related to damages and injuries sustained by third parties. |
What is not covered under the policy?
It is unfortunate that commercial truck insurance companies cannot provide coverage for all the risks and liabilities your business may face. The following are common reasons why claims are rejected:
| Drunk driving | At-fault motorist claims may be accepted by some policies, but standard truck insurance policies It is important to keep in mind that DUI is a punishable offense. |
| Driving without license | Even if you accidentally lost your license, you could still file a claim if you opted for Loss of License coverage at the start of your policy. Unlicensed individuals operating commercial trucks are not covered by this coverage. |
| Contributory negligence | Generally, truck insurance policies do not accept claims from at-fault clients; however, some add-on policies cover limited bodily injury liability involving contributory negligence. |
| Consequential losses/damages | Consequential losses/damages are not covered by general liability. Cargo insurance, however, offers coverage for all kinds of accidents and risks, including collisions and non-collisions. |
Which types of trucks are covered?
The coverages and limitations of commercial truck insurance vary according to the type of vehicle you intend to insure.
| Tractors & semi-trucks | It doesn’t matter if semi-trailer trucks get cargo insurance or not; the cost of coverage increases for trucks hauling depending on their cargo. |
| Tow trucks | Ensure that your hauled vehicles are also protected by on-hook coverage as part of your liability insurance. |
| Cement mixers | Any damage your cement mixer might cause during operation can be covered by standard liability insurance. |
| Pickup trucks | A standard auto insurance policy will cover your pickup truck if it is not used commercially. |
| Box trucks | Additionally, you should get cargo insurance so that you can file a claim in the event your cargo is damaged during travel. |
| Dump trucks | The cost of insuring dump trucks is usually higher as their size makes them prone to accidents. |
Types of coverage available and how they differ
It is possible for truckers to customize their insurance policies based on their company’s insurance needs, their budget, and the size of their fleet.
| General liability | In case of third-party bodily injury or property damage, general liability insurance protects you financially. |
| Medical payments | You, your drivers, and your passengers are covered by personal injury protection coverages, not just third-party damages. |
| Motor truck cargo coverage | Cargo coverage for motor trucks protects your shipment while it is in transit, during loading, or during unloading. |
| Non-trucking liability | If your truck is used for non-commercial purposes, NTL covers collisions and non-collisions. |
| Physical damage | By including physical damage coverage in your liability policy, you ensure that your coverage extends to first-party vehicular damage as well. |
| Primary liability | A driver who is at fault for property damage or bodily injury to a third party may file a claim with primary liability for these damages or injuries |
| Rental reimbursement with downtime | As part of the Rental Reimbursement with Downtime policy, your rental fee will be compensated for a period of up to 30 days while you are in the process of repairing your rental vehicle. |
| Trailer interchange | This coverage protects you from various third-party and first-party property damages if your fleet operates on a trailer interchange. |
| Uninsured/underinsured motorists | Should you get into an accident with someone who lacks or has little auto insurance, you can use your uninsured or underinsured motorist coverages. |
How much does commercial truck insurance cost?
What kind of costs are involved in commercial truck insurance? One of the biggest mistakes new truckers make is accepting the first insurance quote they receive. You should always explore your options, no matter how affordable the premiums may seem.
It is typically your preferred insurer’s risk tolerance that determines your truck insurance premiums. Commercial insurance companies with a good reputation usually charge industry averages, but they also have extremely strict application requirements. Some truckers might not qualify if they have a bad driving record.
In contrast, companies providing high-risk commercial truck insurance have minimal requirements. Their premiums, however, are higher. It is very risky for an insurer to insure truckers who are more likely to be involved in road accidents.
What affects the cost of commercial truck insurance policies?
While commercial truck insurance companies assess clients based on different risk tolerances, they often take into account the following factors:
| Type of covered vehicle | A high-value, exotic truck usually requires more coverage under your insurance policy to pay for repairs and parts replacements. |
| Cargo | The goods you haul regularly will be assessed by your truck insurer, regardless of whether you have cargo insurance. You will either fall under hazardous or non-hazardous conditions. There is typically a greater need for insurance coverage for truckers hauling hazardous, high-value items. |
| Operating radius | You are exposed to more hazards when you spend long hours on the road. Therefore, long-distance truckers who travel hundreds of miles daily usually require more coverage. An average long-haul driver drives 250 to 1,000 miles or more per trip. |
| Driving history | A bad driving history like multiple traffic violations and unpaid tickets can spike premiums. Insurance providers will gauge the likelihood of you getting involved in an accident on the road by checking your driving records. If you own a fleet, your insurer will also assess the drivers you hire. |
| Deductible and coverage | Coverage limits and deductibles can be customized to obtain better premiums. Insurance policies generally cost less if the deductibles are higher and coverage limits are lower. This is especially the case if you are paying the annual premiums. |
| Vehicle storage | Make sure you pay attention to your parking space. Clients who care for their trucks 24/7 are usually rewarded by the insurer with better rates. It’s important to keep in mind that insurance offers financial protection in case of theft or natural disasters. So, make sure you choose a secure parking space that is in a guarded area with surveillance cameras or guards. |
Top companies providing commercial truck insurance
Which insurance company offers the best policies for commercial trucks? The market for truck insurance is flooded with dozens of companies. First-timers may find it overwhelming to choose any insurer because of the sheer number of choices available.
We put together a quick comparison review of four of the country’s most reputable truck insurers to help you start the process:
Progressive
In terms of trucking insurance, Progressive is, without a doubt, among the best. Founded in the 1930s, they are well-known for quickly processing claims and providing coverage across the country.
Yet, what truly distinguishes them is the extensive coverage they offer. In terms of insurance policies, truckers have total control. The limitations of your policy can be customized based on your budget, the size of your fleet, and the nature of your business.
| Pros | Cons |
| Extensive coverage options | Industry-high insurance premiums |
| 24/7/365 customer support | Business insurance policies only available through third parties |
| Multiple opportunities for discounts |
Sentry
With Sentry, you will find all the business insurance you need under one roof. With their long history of mutual insurance, they are well-positioned to offer a wide range of policies, such as commercial semi-trailer insurance and general liability insurance.
Additionally, Sentry has over a century of industry experience, allowing clients to feel at ease. With a history dating back to 1904, they have endured several economic depressions, so you can count on them to remain in business for a long time protecting your insurance needs.
| Pros | Cons |
| A variety of discounts are available | Roadside assistance is not free |
| Support from agents is excellent | Applications and quotations cannot be submitted online |
| Financial stability and reliability |
The Hartford
Hartford is dedicated to providing long-term protection. It’s rare to find a commercial truck insurer that offers such comprehensive programs geared toward defensive driving, road accident prevention, and driver safety. Moreover, you can get massive discounts by taking these classes.
As far as financial strength is concerned, this 200-year-old company has an excellent reputation. Among other ratings, they have an A+ rating from Standard & Poor’s Financial Rating, an A1 rating from Moody’s Financial Rating, and an A+ rating from AM Best Financial Rating.
| Pros | Cons |
| Exceptional financial ratings | Coverage options are limited |
| A comprehensive defensive driving program | Policy customization is minimal |
| Offers group benefits |
Frequently asked questions
Are you still confused by commercial truck insurance? We’ve got you covered! Learn about some of the questions that first-time truckers and policyholders ask about commercial trucking insurance.
What is cargo insurance, and how does it work?
In case of first-party damage to your cargo, you are covered by cargo insurance. As a general rule, it covers damages caused by car accidents, natural disasters, cargo abandonment, theft, acts of war, and customs rejections.
How does a bobtail policy work?
Those who own bobtail insurance on their semi-trucks are protected while using them for non-commercial purposes. In most situations, it covers vehicles not hauling cargo. Consider adding this coverage to your semi-truck policy.
How do cargo and freight insurance differ?
Cargo insurance covers damages sustained by the insured cargo, while freight insurance protects the person or organization overseeing the dispatch of goods.
A brief overview of commercial truck insurance
In general, trucking insurance protects your company from unforeseen incidental risks, such as collisions, criminal activities, and natural disasters.
A trucker should never drive without adequate insurance coverage. It is illegal to drive underinsured. As well as risking your own and your passengers’ safety, you may also face hefty fines and license suspension.
It may seem overwhelming, but finding a reputable, responsive, well-reviewed truck insurance company is vital for everyone’s safety. Businesses need to first understand the types of commercial trucking insurance to find the right coverage that suits their needs.
