Commercial truck insurance isn’t just for trucking businesses. If you or your employees drive trucks in your small business, you will want to make sure you have the right insurance coverage.

Here’s what you need to know about commercial truck insurance. 

How it Works

Commercial truck insurance is essential if you or your employees drive a truck as your business, or in your business. It can provide coverage for physical damage and bodily injury claims resulting from an accident involving a commercial truck. It can also cover claims against the truck driver and the trucking company, as well as liability coverage for property damage and personal injury, along with other coverage options. 

How Much Does Commercial Truck Coverage Cost?

Progressive, top insurer for commercial trucks in the US, says that in 2021, the average cost per month for commercial for-hire truck insurance ranged from $703 for specialty truckers to $1,118 for other transportation truckers. 

Your cost, though, will vary depending on a variety of factors that include;

• Your state and where you drive
• Type of truck
• Type of trailer (if applicable)
• Type of cargo you carry
• Your driving history
• USDOT authority 

Those are just some of the factors that may affect how much you pay. For example, are you pulling a trailer under a trailer interchange agreement? If so you’ll need to get trailer interchange insurance. 

How Much Commercial Truck Coverage Do I Need?

A small business owner who drives a light van to carry cleaning equipment to client’s offices or homes will have very different insurance needs than a food truck owner or  someone who has a fleet of semi trucks that delivers hazardous goods across multiple states.  

Here are some of the types of truck insurance coverage you’ll want to consider:

Liability Coverage: This type of coverage covers the company’s legal responsibility for bodily injury or property damage caused by a truck accident. General liability coverage can also include coverage for legal defense costs and damages resulting from lawsuits. 

For-hire truckers may need trucking liability insurance (in addition to primary liability coverage) to cover events like an erroneous delivery that causes damage.

You may also want optional Non-Trucking Liability Coverage if you lease your truck and use it outside of business purposes. If you operate a truck under someone else’s authority without a trailer in tow you may need bobtail insurance. 

Physical Damage Coverage: This type of coverage covers damage to the truck itself, including repair or replacement costs. It may also cover damage to cargo and any other items that may be damaged in an accident, though it typically does not cover the driver or owner’s personal property. Heavy trucks may need Fire and Theft with CAC insurance. 

There may be separate deductibles for collision and comprehensive coverage and if you own your vehicle outright you may choose whether to carry this coverage, or how much coverage to carry. (If your truck is financed or leased, your policy must meet requirements set by the lessor or lender.) 

Uninsured/Underinsured Motorist Coverage: This type of coverage pays for costs associated with an accident in which the at-fault driver is either uninsured or underinsured. One attorney warns that many insurance companies offer low levels of this coverage, which could result in catastrophic costs for a trucker in an accident caused by another driver.

Cargo Coverage: If the cargo you carry is damaged, destroyed or even stolen, motor truck cargo insurance can be crucial. And it may be required by the FMCSA. Household goods motor carriers are required to meet minimum cargo insurance requirements. 

Medical Payments Coverage: This type of coverage pays for medical expenses related to an accident, regardless of fault. It can cover you, your employees or anyone in the truck when an accident occurs. 

If you are a professional trucker, you likely are already aware that the Federal Motor Carrier Safety Administration (FMCSA) requires companies that operate commercial vehicles transporting passengers or hauling cargo in interstate commerce register with the FMCSA and have a USDOT Number. 

Commercial intrastate hazardous materials carriers who haul types and quantities requiring a safety permit must also register for a US DOT Number. Certain commercial vehicles must also meet certain insurance filing requirements that meet specific minimum coverages. These coverage limits are fairly high, but you must meet those requirements. 

Commercial Truck Insurance Rates

Commercial truck insurance rates will depend on a number of factors. Expect to spend some time evaluating coverage options and costs. 

Also be sure to provide complete information when you are getting a quote for commercial truck insurance so you get the coverage you need, and to also help ensure you are covered in the event of an accident, theft, or other damage. 

Factors that can affect your commercial truck insurance costs:

Location: It is more expensive to insure vehicles in certain states or locations, and commercial vehicle insurance is no different. Insurance tends to cost more in areas where there is a higher risk of accidents, such as urban areas with high traffic. Your driving radius will also be a factor here. Driving locally often means a better rate than long-haul driving. 

Vehicle Type: As with car insurance, certain types of trucks will cost more to insure. Newer trucks tend to be more expensive to insure than older ones, and generally heavier vehicles will be more expensive because they can cause a lot more damage in an accident. 

Driver Qualifications: Just as with your personal auto insurance, your driving record can affect your rates.  Drivers with clean driving records may qualify for lower rates, but the insurer may also take into account how long you’ve been driving commercially, your age. Your insurance-based credit score (based on your credit report) may also be a factor in underwriting. A hazardous materials endorsement on your Commercial Driver’s License (CDL) may be attractive in terms of the types of jobs you can get, but may also result in higher rates since you may be hauling riskier cargo. 

Deductibles and Limits: Higher deductibles or lower coverage limits can save you money. Deductibles are the amount that you or your business must pay out of pocket before insurance coverage kicks in. The coverage limit is the amount the policy will cover for certain types of claims. 

Cargo. The type of cargo you transport can affect your rates since some types of cargo are higher risk than others. 

As with any type of insurance, it’s helpful to compare quotes. But cheaper isn’t always better. You want to make sure you have adequate coverage and that the insurance company is financially healthy and has a good track record of paying claims promptly. 

Nav’s Verdict: Commercial Truck Insurance 

Commercial truck insurance— and business insurance in general— is crucial for businesses that rely on one or more trucks to operate their business. With the right coverage, you can help protect your business against significant expenses in the case of an accident, theft or other serious events. 

While insurance can be expensive, not having the right insurance can be even more costly. Take the time to review coverage options and securing the right insurance.

Frequently Asked Questions

• How do I know if a truck insurance company is good? 

  You can look up the financial strength rating of commercial truck insurance companies (or ask your insurance agent to do that for you) on several sites such as AM Best, Moody’s, Fitch’s, or Standard and Poor’s. They use different ratings systems. One of the most well known, AM Best, rates insurance carriers as follows:
  
  A+ or A++ Rating = Superior Financial Strength
  A or A- Rating = Excellent Financial Strength
  B+ or B- Rating = Good Financial Strength
  B or B- Rating = Fair Financial Strength
  C+ or C++ Rating = Marginal Financial Strength
  C or C- Rating = Weak Financial Strength
  D Rating = Poor Financial Strength

• Do I need commercial auto insurance as a rideshare driver?

  Your personal auto insurance won’t cover you for ride sharing activities. You may get insurance through the rideshare company you drive for but there may be coverage gaps. Talk with your auto insurance provider. You may need to get a ride share endorsement or other coverage to supplement your personal auto liability coverage. 

• Will commercial truck insurance affect my business credit?

  Insurance payments aren’t typically reported to business credit. Insurers may check personal and/or business credit, though, so be sure you monitor your credit so you are aware of potential issues.

• Can I pay for insurance with a credit card?

  You may be able to pay for your business insurance with your credit card. As long as you can afford to pay your credit card in full to avoid interest, using a cash back or rewards business credit card will make the cost of that insurance a little less painful.