Although it may seem like an unnecessary expense, trucking insurance plays a significant role in the protection of businesses in the trucking industry. 2019 statistics from Census.gov describe how more than 3.5 million people work as truck drivers, making it one of the largest occupations in the United States.
To add to this, although many truckers work a regular 40-hour workweek, almost half of these truckers work longer hours, making them more susceptible to fatigue while driving. This can be particularly dangerous because they typically operate heavier vehicles while transporting valuable cargo.
Because of this, having comprehensive insurance can provide financial assistance in the event of an unforeseen accident. Medical costs, legal costs, and more can quickly add up and impact your business’s bottom line, making it crucial to invest in the best commercial truck insurance you can afford for your company.
Reasons to Invest in Trucking Insurance
Finding a reputable insurance company is the key to obtaining adequate coverage for your unique needs. A valid insurance policy acts as a safeguard against potential liabilities that can arise from accidents both on and off the road.
1. It protects your business financially
Things like accidents, theft, and other disasters can cause unexpected expenses that can quickly derail your company’s success, especially if you’re just starting out. However, investing in a commercial truck insurance policy can help cover some of these losses.
In addition, having an insurance policy with an established company means that you can quickly process any claims and return to normal operations as soon as possible after a temporary setback. Your clients will also appreciate the additional coverage and be more likely to trust you with transporting their cargo.
2. It is a legal requirement you should comply with
Regardless of the state you operate in, The Federal Motor Carrier Safety Administration (FMCSA) has made it a legal requirement for every trucking company to obtain public liability insurance before operating. This covers property damage and bodily injury caused by a truck driver.
Without the most basic types of coverage, you can potentially face expensive fines and legal action that will harm your company, impacting your day-to-day operations. However, investing in broader types of insurance coverage can give you added peace of mind in terms of safety.
3. It can cost you more if you skimp on your insurance plan
In addition to major costs including fuel and vehicle maintenance, a commercial insurance policy may be one of your biggest annual expenses. It may seem tempting to purchase the cheapest insurance policy you can find, but cheaper is not always better. Often, you get what you pay for in terms of quality and customer service.
The right policy for your brand will balance both value and sufficient coverage in the event of an accident or theft. Taking the time to do some research and find a plan that can help you recover financially after an accident is critical so that you don’t pay for coverage that is too little or covers more than you need.
4. It can cover more than just accidents on the road
Although many people tend to associate truck insurance with accidents on the road, there are also other benefits to investing in other types of coverage as well. Assured Standard’s overview of commercial truck insurance describes how there are different coverage types for every business need, including the following:
- Motor Truck Cargo Insurance: Covers damage associated with the destruction of cargo if a vehicle is subjected to a fire, a crash, or an accident on the road
- Bobtail Insurance: Protects drivers who are operating a commercial vehicle without a trailer under someone else’s trucking authority
- Supplemental Towing and Cleanup: Handles both towing and cleanup of debris and other materials on the site where the accident has taken place
5. It can provide additional services to improve your experience
Many insurance providers offer the added bonus of roadside assistance coverage for truckers, which can save both time and money in the long run. While these policies may not cost a lot of money in the first place, an insurance plan can often be bundled with additional services for further cost savings and numerous benefits. These can typically include:
- Tire replacement assistance
- Mobile mechanic services
- Access to emergency jump starts
- Access to fuel delivery
- Locksmith services and aid
- Navigational aid
- Assistance with truck rentals
- Helpful concierge services to locate truck stops, restaurants, and more
Types of Trucking Insurance
With the variety of insurance types available on the market today, it can be confusing to determine which type of trucking insurance your business needs. Consulting a qualified agent can help you make the best decision and ensure that your needs are met on an annual basis. The most common types of trucking insurance are:
- Primary Auto Liability Insurance: This is required by federal law for every vehicle whether it is self-owned or leased and protects you in the event of a third party injury
- General Liability Insurance: Covers a business for any property damage or bodily injury that doesn’t involve a truck, including a slip and fall at your place of business or advertising risks
- Non-Trucking Liability Insurance: Another term for bobtail liability, it covers the cost of an accident when a truck driver is not under dispatch and is using the truck for non-business related purposes, e.g. on their way home
- Non-Owned Trailer Liability Insurance: This coverage protects a trailer that someone else owns.
Factors that Affect the Cost of Trucking Insurance
Depending on several factors including the state that you live in, your insurance costs can vary across companies and plans. Things like driving records, age of your trucks, number of years in business, and the type of cargo you carry can also raise or lower the costs of your premiums.
1. The number of policies you have
If you own a large fleet of trucks, insuring each truck individually will lead to higher premiums. However, if you bundle together separate policies with the same company, they’re more likely to offer competitive discounts that can be even more convenient to deal with when processing claims.
When you’re choosing trucking insurance, double-check whether the insurance company offers discounts on additional policies when you ask for a quote. This can save you a great deal of money in the long run.
2. The overall safety of your fleet
The location of your trucks and where your fleet is stored plays a role in the cost of your trucking insurance. If it is parked in an open lot as opposed to a closed yard, insurance companies will tend to charge a higher rate due to the increased risk of theft and damage.
However, commercial trucks that are parked in a garage would pay much less than in a public area.
3. The type and value of your cargo
Depending on the type of cargo you transport, certain types of coverage can be even more expensive or fail to cover your specific needs. For instance, if your cargo includes things like jewelry, fine art, pharmaceuticals, tobacco, alcohol, and live animals typically require another policy because of their high value and relative risk.
4. The driving record of your truckers
Before giving you a quote for their services, insurance companies will ask for the history and driving records of all the truck drivers under your company. For those who have had numerous violations in the past for speeding, drunk driving, and vehicular accidents, it is likely that the insurance company will charge higher premiums.
Especially when it comes to heavy-duty vehicles like trucks, insurance companies will want to minimize their risk, which is why hiring experienced truck drivers who practice road safety may be much more cost-effective for your business.
5. The age and value of your truck
Factors such as the mileage, the age of your truck, signs of wear and tear, and any history of accidents can impact your insurance premiums. Different vehicles have varying risk profiles and may lead to a wide range of insurance costs for your company.
Before investing in a new vehicle, it pays to look up the annual insurance costs for that specific make and model. In addition, keeping your vehicles in tip-top shape can help lower insurance premiums and make them more affordable.
6. The typical driving distance of your trucks
If your fleet of trucks regularly travels across state lines, insurance companies will likely charge more. The more miles that your trucks cover, the more likely it is that an accident can occur due to driver fatigue and vehicle damage.
Furthermore, some distances and locations may be more dangerous to drive in, which can also impact your insurance costs. Providing companies with typical routes and average distance your fleet covers will help them come up with an accurate quote.
What to Consider When Purchasing Trucking Insurance
During the process of buying commercial truck insurance, make sure to read the policy very carefully before signing it and only work with a company that you trust. Investing in comprehensive coverage can save you money in the long run, especially if you manage to negotiate a good deal.
What is your stance on investing in trucking insurance? Feel free to leave a comment below if you have any stories and tips to share.