If you’re new to being an owner-operator, you’ve likely run into the sometimes messy roadblock of business insurance. Trying to learn more about commercial trucking insurance can get mentally exhausting, especially without knowing where to begin.
There’s so much misinformation out there that you may end up paying a high price if you take a wrong turn.
Unfortunately, there’s no single solution that fits everyone’s needs. You’ll have to sift through a lot of information and relate it all to your situation to figure out the best coverage for you. To help you out, here are some must-know business insurance facts that can save you thousands along the way.
1. Insurance requirements vary depending on a few factors.
There are a few factors that can affect the type of insurance you’ll need as an owner-operator.
These are:
- Range
- Haul type
- How much experience you have
- Your driving record
Just like with any vehicle insurance, your past driving record can help determine your rates.
2. Insurance requirements can also vary on a state-to-state basis.
States have their own regulations and requirements when it comes to commercial auto insurance, and it falls on you to find out what your state’s requirements are so you can ensure your compliance. The insurance costs may also vary depending on where you operate since some states have higher insurance rates than others.
3. Despite the factors above, primary liability insurance will always be a requirement.
Every owner-operator needs primary liability insurance, which covers damage to both tractor and trailer. The minimum coverage requirement appears to be $750,000. Some owner-operators add physical damage coverage that can help protect their tractors and trailers from natural disasters like bad weather conditions and road hazards like potholes.
4. Minimum primary liability insurance goes up depending on what you’re hauling.
$750,000 won’t always be the minimum primary liability insurance you need. This amount can go up depending on the cargo you are hauling. For example, if you’re carrying risky loads or hazmat materials, chances are you’ll find yourself having to meet higher minimums all around.
You may also see your minimum going up to $1,000,000 if you need federal filing. Your insurance agent may be able to help you figure this out.
5. You might want cargo coverage.
Primary liability insurance doesn’t always cover damage or losses incurred to the cargo you are carrying. If you’re an owner-operator running under your own authority, it might be a good idea to get cargo insurance to protect your haul. The last thing you need is to be financially responsible for damaged loads.
If you’re working under lease to a motor carrier, you might not need this coverage as the company might already have it in their insurance coverage.
6. There are other insurance types to consider.
If you’re driving under a trucking company’s authority, you’re likely already covered by their primary liability coverage. However, you might find yourself needing NTL (Non-Trucking-Liability) and Bobtail insurance coverage.
- NTL will cover you when you’re using your truck for anything non-business-related, like a stop for supplies or going somewhere with your friends.
- Bobtail insurance will cover you when you’re driving your truck without a trailer attached.
If you are driving under your own authority as an owner-operator/independent contractor, then your primary liability coverage most likely already includes NTL and Bobtail coverage. It may be a good idea to double-check with your insurance provider.
7. You can also get optional passenger accident coverage.
If you often drive with a guest (passenger) in your truck, you can opt for additional passenger accident coverage for some extra peace of mind.
Final Thoughts
Insurance doesn’t always have to be a messy thing you’ll have to untangle. A little bit of research and assistance from an insurance agent can help you figure out everything you need to get set up.
It might be a good idea to take your time to choose the right insurance agent and company for you. There’s no harm in consulting multiple agents and companies for second opinions until you decide what’s best for your needs.
