The Ultimate Guide to Types of Truck Insurance

If you are in the business of transporting goods by truck, you are aware that it can be a profitable but also risky and costly venture. Whether you own a big fleet of trucks, work as an independent truck driver, or manage a business that relies on these vehicles to deliver goods, you must protect yourself and your clients from potential losses and damages on the road. That is why you need commercial trucking insurance, which is a sort of specialized coverage that protects trucks and their drivers against a variety of threats such as crashes, theft, vandalism, and legal liability.

Truck insurance is a complex and broad subject that demands careful consideration and analysis. It comes in a variety of forms, each with its own set of benefits, limitations, and prices. Depending on the size, structure, and scope of your trucking operation, you may require one or more of these forms of coverage to protect your assets, employees, and customers. Let’s go over the many types of trucking coverage policies to find which one is best for you. By understanding different types, you will be able to make the best decision for your business.

What is Truck Insurance?

Commercial truck insurance, like conventional car insurance, can assist cover you in the event of an accident or damage to your vehicle. If you own or lease a vehicle or manage a business with a fleet of trucks and drivers, you’ll need proper coverage which will protect you, your drivers, your trucks, and your cargo. This coverage protects you whether you use your truck to move goods, animals, clients, or supplies. If you use your truck for both work and personal purposes, such a truck policy will fill in the gaps left by your auto policy. However, this is not always the case with larger commercial trucking businesses.

In such cases, Owner operator truck insurance covers the specific needs of owner-operators. Owner-operators are truck drivers who own and operate their trucks, either under their own authority or under a lease agreement with a motor carrier.

Trucking insurance policies begin with primary liability and subsequently add various coverages. As part of a trucking license, you must carry primary liability coverage to safeguard property and persons from harm caused by your trucks.

Types of Truck Insurance

There are various levels and types of trucking insurance. It is important to have a proper understanding of all because it will aid you when it comes time to shop. Some common commercial truck coverage policies are:

1. Primary Liability Insurance

This is the most basic and essential type of insurance for trucking companies. It covers the damages and injuries that you or your drivers cause to other people or property in an accident. It also covers the legal fees and settlements that may arise from such accidents. Liability coverage is required by law in most states and countries, and the minimum coverage limits vary depending on the location and type of cargo you transport. This policy will have coverage for the following scenarios:

• Bodily Injury

 Medical costs coverage for the other people involved in the accident. This does not cover your medical expenditures. However, you can add supplemental medical coverage to receive compensation for your injuries.

• Property Damage

Coverage for someone else’s property or vehicle, however, it can cover more than just a car. This will include the cost of repairs and replacement.

2. General Liability Insurance

Every state mandates general liability insurance. It protects you if one of your drivers causes property or bodily harm as a result of a collision. It covers a driver’s behavior while operating on someone else’s property, such as truck stops or loading docks. It also involves errors in load delivery. This type of policy can assist in protecting your company from financial losses and assist to protect truck drivers from lawsuits resulting from accidents, injuries, or property damage in or around their trucks.

3. Physical Damage Coverage

Physical damage insurance covers commercial truck repairs caused by theft, collision, vandalism, and natural calamities. If your truck is beyond repair, this policy may cover the cost of replacement. It has further categories which cover different scenarios.

• Comprehensive Coverage

It includes coverage for the truck and all attached equipment.

• Collision Coverage

If your car collides with another object, such as a deer, tree, or equipment, your physical damage coverage will pay the cost of repairs.

• Specified Case Coverage

Fire, lightning, explosion, theft, windstorm, hail, earthquake, flood, mischief, vandalism, sinking, burning, collision, and derailment were all covered. For fewer risks to be covered, you would purchase a Specified Cause of Loss policy instead of comprehensive coverage.

4. Motor Cargo Insurance

This cargo insurance covers the products you transport, including damages caused by collision, fire, or hitting. This commercial policy, for example, covers your goods if your truck becomes stranded in an ice storm or heavy traffic. This coverage protects you if the cargo on one of your commercial trucks is stolen or destroyed. Premiums will vary depending on the type of goods. There are two types of cargo insurance:

• Primary Coverage

Up to the policy limit, primary coverage covers damages or losses.

• Excess Coverage

Excess coverage compensates for damages or losses that exceed the policy limit.

The FMCSA (Federal Motor Carrier Safety Administration) does not require motor truck cargo insurance; however, most shippers require it to enter into a contract with them. This policy is a smart option to protect your investment.

5. Trailer Insurance Coverage

Trailer exchange coverage is insurance that assists drivers in paying for losses incurred while switching trailers. This might help truckers avoid costly repairs and fines. It helps covers the cost of repairing or replacing trailers that you are using but don’t own. If these trailers get damaged, it helps pay for the repairs or replacement. It is also available under Business Auto Policy (BAP) and it will come under effect if the insured trailer of some 3rd entity is damaged.

6. Uninsured Motorists Coverage

Uninsured or Underinsured Motorists Coverage pays for damage to your vehicle if another driver hits you and does not have liability insurance.

7. Fleet Insurance

This is a special type of truck insurance that is utilized by businesses. Fleet insurance is a form of coverage that covers the entire fleet of vehicles. Instead of insuring your corporate vehicles individually, which can be pricey, you can potentially save thousands of pounds by developing a comprehensive, tailor-made fleet insurance policy. It not only saves your company money, but it also allows you complete flexibility and control over your policies.

 Insuring your trucks under a single policy will save you a lot of time and allow you to focus on other critical aspects of your business. Depending on the sort of fleet policy you obtain for your company, it may cover the following: If your truck is at fault, you will get third-party liability coverage; uninsured auto coverage if an uninsured driver is at fault; theft, vandalism, and fire damage or loss; and accident benefits.

8. Bobtail Insurance

If you’re driving your truck without a trailer connected (best known as bobtailing or Non-Trucking Liability Insurance), this insurance can assist protect you in the event of an accident. It covers trucks that are operated without trailers, sometimes known as bobtailing. This coverage protects the vehicle only when it is not coupled to a trailer, regardless of whether the truck is dispatched.  

How to find the right type of Truck Insurance?

Commercial truck insurance is difficult to understand. It is available from a variety of companies and in a variety of forms. Choosing the correct policy for your company can make or destroy it. If you need to file a claim, you should be certain that your truck insurer will uphold their half of the bargain. That includes conducting the same due diligence on a possible commercial truck insurer as you would on a new business partner.

Even if you have the best drivers in the world, you do not influence what other road users do. Business owners may hope that their personnel will behave predictably, but they must always prepare for the unexpected. In the trucking industry, such planning begins with a collaboration with the appropriate insurer. Before signing up with any insurer, consider the following factors to find the best match.

What coverage do you need?

It is critical to understand what coverage you need for your truck. Will there be a liability clause if someone is injured while the vehicle is in operation? Do you need the insurer to cover the medical expenses? If not, what other exceptions exist, and how might these exceptions affect your business? Your needed coverage will also be influenced by the type of truck you drive and the cargo you transport.

a) Your Budget

There will always be some kind of vehicle commercial insurance available at every price bracket. The less money you have, the more cautious you must be with your policy. Ensure that your cost savings are not the result of costly coverage exclusions. If you are low on budget and you cannot buy complete coverage policies for your truck(s) then you can do the following steps to minimize coverage premiums to a level that fits your budget.

• Employ professional drivers who have commercial licenses and clean driving records.
• Significantly increase your deductibles.
• Ensure that your vehicle is effectively secured when it is driven off-road.
• Pay premiums every year.

b) Truck or Fleet type

The type of truck you own is an important consideration when selecting commercial truck insurance. Is it light-duty, medium-duty, or heavy-duty? Each categorization carries with it unique responsibilities. It can affect your premiums significantly as due to the increased expense of repairs following an accident or equipment concerns, such as heavy semi-trucks often cost more to insure than lightweight pickups.

c) Insurer Reputation

Check the reputation of any insurance business you obtain a quote from by reading some online reviews. Verify the financial stability of the company through online ratings.

d) Customer Support

Before you get any policy, find out what happens if you need to file a claim or have a question. Who do you contact? How do you contact the company? What are the response timings if you need to use your insurance? Many businesses offer 24-hour help online or via phone, but not all do.

Conclusion

According to the National Safety Council (NSC), 4,842 heavy trucks were engaged in fatal crashes in 2020, while 107,000 large trucks were involved in injury crashes. Without the proper insurance, one major accident can rapidly put you out of business; hence, you must safeguard yourself, your business, and those around you with the appropriate coverage.

Truck Insurance has different types such as primary liability insurance, which serves as the foundation of coverage, protecting against personal injury and property damage, to cargo insurance, which protects against loss or damage to transported products, each type is critical in managing risks in the fast-paced world of trucking.

Furthermore, specialized coverages such as bobtail and non-trucking liability provide focused solutions for certain instances, giving truckers peace of mind while their vehicles are not actively transporting loads.