Do I Need Insurance for my Trucking Business?
Long story short, yes. Having an insurance policy for your trucking business is a must, as mandated by federal law.
Through the Federal Motor Carrier Safety Administration (FMCSA) and Department of Transportation (DOT), a proof of primary liability insurance is required for your trucking business to be issued an Operating Authority/MC Number.
With that being a non-negotiable question, trucking business owners are now mostly concerned about the cost of getting a trucking insurance. In this article, we will be talking about estimated costs of a commercial truck insurance, the factors affecting insurance rates, and possible ways on how you could lower your commercial truck insurance cost.
Estimated Costs of a Commercial Truck Insurance
Primary liability coverage minimums are required by the federal government for each of your trucks, including leased vehicles under your fleet. Accidental injuries or damages that your vehicle may cause to people or property are covered by this type of insurance.
For transparency, truck insurance prices have increased over the years. At present, average monthly cost of a primary liability coverage alone plays at around ~$640 for specialty truckers and ~$982 for transport truckers. These figures can still increase even more when cargo, physical damage, and other circumstances are added in the coverage. Basically, cost increases as more coverage is added.
Factors affecting Truck Insurance Rates
As previously mentioned, more coverage added means higher costs for your trucking insurance. Other rating factors that influence cost are the following:
USDOT Authority - Having your own authority means higher costs than leasing to a company as the latter usually covers the primary liability exposure while drivers are under dispatch. However, a non-truck or bobtail coverage must be carried by these drivers to fill some gaps however they are a lot cheaper than the primary liability itself.
Cargo - The type of cargo being hauled largely influences insurance costs. Depending on the type and transport conditions and requirements, some cargo involves greater risks when being moved compared to others. Hence, accurately disclosing the type of cargo being transported is a must to avoid being denied when claims are made.
Vehicle Type - Similar to cargo type, vehicle age and type also affect insurance costs. For instance, newer vehicles will justify higer insurance costs than older ones as the former may incur bigger costs when repaired or replaced than the latter. Meanwhile, heavier trucks will often be charged higher compared to lighter pickup trucks as the former may cause greater damages in case an accident occurs involving it.
Location - Insurance rates vary by state. Simply, higher costs are expected when operating in states having higher insurance rates.
Operating Radius - For truckers that cover larger areas and more miles, greater insurance costs are involved. This is due to the possibility of greater risks involved in less-familiar routes and longer drives, hence regional routes will involve higher rates than local routes.
Driving History - USDOT operating history with any accident and/or violation records could also lead to a higher rate for your truck insurance. For example, even a minor speeding ticket could cause a drastic increase to insurance costs. This calls on drivers and truckers to prioritize compliance to safety and traffic rules as this could not only ensure workplace safety but also help make hundreds to thousands of dollars in savings.
How Can I Lower my Commercial Truck Insurance Cost?
Some ways to help reduce commercial truck insurance costs include maintaining a good driving record on your USDOT Operating History, opting for a higher deductible in your policy, paying your premium in full, insuring more than one vehicle at a time, and setting up your payment via electronic funds transfer.
Getting commercial truck insurance could be costly for your business but truly, it gives you a lot of peace of mind as you continue your operations.
For a customized trucking insurance policy that meets your unique needs and provides all the protection that you may require for one low price, Innovative Logistics provides affordable commercial insurance options, with the specific needs of business owners as the top priority. Let’s talk about your trucking goals today.