May 27, 2015
Understanding Commercial Truck Insurance
It’s required by law for a small business or an owner operator offering trucking services to have commercial truck insurance coverage. This insurance can be a costly item for a company that owns only one or two trucks. However, there are options available that are geared toward the type of truck, the goods carried, the risks incurred and the number of years’ experience the driver has. Understanding the different packages insurance companies provide will help choose the best option for your business.
Motor Carrier HQ is not insurance experts; the information we are providing below is just a basic overview of what you might run into as you are looking for insurance. Make sure you find an insurance agent who specializes in commercial truck insurance and has your best interest in mind to help you make smart insurance decisions.
Types of Commercial Truck Insurance
Types of coverage not related to the transportation of cargo include bobtail, occupational accident coverage, non-trucking liability coverage and coverage for personal items in the truck. Bobtail insurance applies after the truck’s load is delivered and the vehicle is traveling without cargo or a trailer. It is also for owners that use the truck for personal use.
This is similar to non-trucking liability coverage, which applies when the truck is not transporting cargo. Occupational accident insurance covers the owner operator for accidental death or dismemberment that occurs in the course of the truck driving.
This coverage consists of collision coverage and comprehensive insurance. Collision damage in basic coverage covers the costs of the other vehicle from an accident if you were at fault as well as the damage to your vehicle. Comprehensive insurance is similar to regular motor vehicle insurance. It covers the cost of repairs to your vehicles, up to the maximum value, that’s covered by something other than a collision.
Because you need coverage for every possible scenario, companies that offer commercial trucking insurance have a variety of specialized options to choose from without increasing the price to an unaffordable amount. In addition to basic coverage, the trucker who transports cargo on behalf of customers needs commercial auto liability. This will provide coverage for bodily injuries and damage to the property of others. Cargo insurance covers the loss or damage of the cargo, and the cost depends on the type and value of the cargo.
Drivers who have multiple accidents on their record have a higher deductible because of the risk to their insurance company. Deductibles vary from $500 to $2000 and are paid first in the event of the claim. This means if your deductible is $1500 and your repairs are $2000, you would pay the repair shop first and the insurer will pay the remaining $500. If you prefer not to have a high deductible, you can pay a higher premium. For companies with experienced, accident-free drivers, a higher deductible and lower monthly premium is usually the best option.
Premiums on the insurance package you choose typically require a down payment and the remaining balance is payable monthly. The payments can be combined with the truck payments if you buy the insurance through the dealer, but it could be more expensive than buying from an insurance company. You can cancel your policy at any time and it won’t affect your credit score. However, you will be liable for the payment of all premiums due prior to the date in which the cancelation takes effect. Premiums and deductibles may be higher if you or your driver has a bad record.