Motor Carrier Insurance Cost: Coverage and Monthly Rates

Motor Carrier Insurance Cost: Coverage and Monthly Rates

Are you a truck driver? Regardless of whether you’re an owner-operator or contracted to a company, it would help if you had motor carrier insurance. The cost of insurance varies depending on several factors, and understanding the types of cover available and its limitations can help you find the best rates.

This post unpacks everything you need to know about motor carrier cost insurance for your trucking business.

What are the Types of Motor Carrier Insurance?

There are several insurance products designed for truckers. Choosing the right coverage depends on your needs. Owner-operators with permanent leases have some of their insurance requirements taken care of by the motor carrier, reducing the costs of your policy.

Motor Carrier Insurance Cost

The insurance covers several provisions, and understanding your coverage along with the policy costs helps you select the best insurance provider and products to suit your needs.

What Does Motor Carrier Insurance Cover?

If you have a general liability commercial trucking insurance policy, you have cover for the following circumstances.

Injuries

If you injure someone with your truck, the insurance covers any lawsuits or medical bills incurred by the party involved. This policy also provides cover for slip-and-fall incidents on your property.

Damage to Property or Commodities

If you’re hauling property, this policy covers you for loss or damage to cargo. It also covers you if you deliver to the wrong physical address.

Accidents at Driver Delivery Points

General liability insurance also covers you for any damage caused to other people’s property.

Slander, Libel, and False Advertising

This policy covers you for any advertising blunders that may occur with your branding or marketing campaigns.

What Motor Carrier Insurance Doesn’t Cover

Your motor carrier insurance won’t cover you for everything. These circumstances don’t fall under your policy.

Vehicles That Aren’t Trucks

Your policy will cover trucks only. Vehicles like hearses, limos, passenger vans, and buses don’t qualify for cover.

Driver Injury

Your general liability policy only covers other people and their property. If you want to protect your workers against injury, those claims fall under worker’s compensation insurance.

Accident Damage

General liability covers other people’s property. If you want sufficient cover for your truck, you’re going to have to take out an independent policy. Federal law doesn’t enforce this cover. However, it protects your business if you’re involved in an accident.

Broken Refrigeration causing Product Loss

If your refrigeration unit packs up and ruins the cargo, you’ll need a specific policy o cover this loss.

Cargo Loss

The federal government requires truck drivers to have a minimum policy value of $5,000 to cover their cargo. However, most truckers carry loads worth much more than that. Check your policy to see that you’re not underinsured.

Loss Of Income  

If your truck experiences damage and you have downtime while waiting for it to get fixed, you’ll need independent policies to cover your loss of income.

What are the Factors Determining My Motor Carrier Insurance Cost?

The cost of semi-truck insurance works out to between $3,000 to $5,000 annually for owner-operators working under a lease. Independent owner-operators pay more, typically between $9,000 to 12,000 per vehicle per year.

The price of your insurance premiums varies depending on several factors. When an insurer assesses you for a policy, they look at the following when setting your premium.

  • The purchase price and market value of the truck.
  • The type of cargo you haul (Hazardous waste or materials are prone to higher premiums).
  • Driving experience and age.
  • Your commercial trucking license and its validity.
  • The distance of your trips.
  • Your credit score and credit history.
  • Your policy payment plan – monthly, quarterly, or annually.

Each insurance provider evaluates these factors according to an independent pricing and risk model. As a result, you’ll get different insurance premium prices from various providers. Shopping around for the best premiums and the best cover is a good idea to help you find the best deal.

What are the Average Costs for Motor Carrier Insurance?

The average premium pricing for your motor carrier insurance cost is between $5,000 to $7,000 for general liability coverage. However, owner-operators will have to purchase this cover in their policy. The federal government sets this threshold, but most truckers require more cover than this amount.

It’s also important to note that general liability premiums can vary between $500 to 600. Cover for physical damage can account for premiums of between $1,000 to $3,000, and this price includes comprehensive insurance and collision cover.

Occupational accident cover will cost your business between $1,600 to $2,200. Cargo insurance varies depending on the type of cargo your haul.

Bobtail insurance covers you when you’re not hauling a trailer. This policy can cost you between $350 to $400.

All these insurance policies are essential for truck drivers. However, there are a few others you’ll need to give your business the protection it needs when things go wrong.

Trailer Interchange Insurance

This policy applies when you’re hauling other people’s cargo, and the owner of the trailer doesn’t have an insurance policy to cover the load.

Umbrella Policies

These policies range from $500 to $700, covering any gaps or payment shortfalls in your policies.

Underinsured/Uninsured Motorist

This cover applies when you’re involved in an accident with another party, and it’s not your fault. The policy covers your property if the other driver is under-insured or uninsured.

Hazard Insurance

Truckers hauling hazardous cargo like fuel or chemicals require this insurance in case of accidents or disasters. If your load spills on the freeway, the insurer covers the cost of the cleanup. 

Livestock Insurance

If you haul animals like chickens and cows, this policy covers you in the event of cargo loss or escape. You also get cover for any damage arising from escaped cargo. 

Motor Carrier Insurance Cost

How Can You Lower Your Motor Carrier Insurance Cost?

If you want to save on your insurance premium cost, follow these tips when applying for insurance.

Improve Your Driving History

Insurance companies will offer you better rates if you have a good driving history. If you’re always getting into accidents, insurers see this as high-risk, and they charge you a fortune in your premium prices.

Length of License

Insurers also look at how long you’ve had your Commercial Trucking License. Most insurers give favorable pricing to drivers with a 5-year history or longer holding a commercial trucking license.

Pay Annually

You can reduce your premium costs by 10% to 20% by paying your account annually with your insurer. The longer the term, the better the savings.

Compare Insurance Rates

As mentioned, get three to five quotes from different insurers. Compare the policy terms and cover, and choose the best option providing you a balance between the two. 

Consider Your Deductibles

To keep the cost of your premiums low, consider higher deductibles with lower limits. You’ll have to wait until tax season to reap the benefits, but it’s worth the wait.

Wrapping Up

There are several types of insurance coverage and policies for truckers. Your needs depend on your status as an owner-operator for the company.

Owner-operators with permanent leases enjoy the benefit of the motor carrier covering some of their insurance costs.

However, independent owner-operators must ensure they take care of all their insurance needs and those of their drivers. Leaving yourself or your driver under-insured can end up costing you your business.

Typically, independent operators have higher insurance premiums due to the increased risk involved with the situation.

Your insurance plan needs to include several provisions, providing you adequate cover for all scenarios you experience on and off the road.

Make sure you understand the policy terms before committing to any insurer.

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