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How Much Should Semi-Truck Insurance Actually Cost?

Finding the right insurance can be difficult, as the process can be excessively complex and sometimes confusing. There are many factors to take into consideration when insurance agencies give you a quote; some of them in your control and some of them not. Knowing how your status can affect your rate is key to getting a fair price. Being uninformed can cause you to overpay, so it’s important to research carefully. Here’s what you need to know about semi-truck insurance costs and how to avoid being duped.

Why Do You Need Semi-Truck Insurance?

Commercial trucking insurance is different from ordinary car insurance, as there is a wide range of additional liabilities. In the event of an accident, federal law requires certain insurance policies to ensure the compensation of anyone injured or any property damaged. Failure to fulfill these insurance requirements can result in an assortment of consequences. These can include a variety of expensive fines, extensive and often invasive government inspections, and total financial liability in the event of a collision, fire, or vandalism.

Different Types of Insurance

There is a wide variety of coverage that you will need before getting out on the road. Some protect the public in the event that a driver causes damage or a collision, these policies include:

  • Public Liability Insurance (usually between $5000 and $12,000) protects both the truck driver and the public if a truck driver causes an accident.
  • Bodily Injury Insurance (cost depends entirely on driving record and company policy, but usually combined with public liability for a few thousand more per year) covers the cost of medical bills if anyone is injured in an accident by fault of the truck driver.
  • Property Damage Coverage (requirements vary by state, ranging from $5,000 to $25,000) covers repairs to any property that is damaged as a result of an accident.

Additionally, there is insurance to protect the truck drivers and their cargo:

  • Cargo Legal Liability Insurance (usually around $1,000 per year) covers damage or loss of cargo should it occur on your route due to an accident, fire, or vandalism. It’s important for both the carriers and the providers as it protects the driver from legal liability, and it protects the cargo owners from significant profit loss.
  • Physical Damage Insurance (usually between $1,000 and $3,000 per year) is for semi-trucks, and it covers the trailer in the event of any body damage.

Average Costs

While it’s difficult to give approximations due to the large range of cost per policy, all of these different types of insurance added together usually range in cost from $12,000 to $18,000, sometimes even going above $30,000 for drivers considered to be higher risk. However, these are merely national averages and may not speak to your unique situation. The prices for each type of insurance drastically vary in different ways, depending on which factors are the most relevant to what the policy is protecting. So for example, Cargo Legal Liability Insurance will vary in cost depending on the value of your cargo. Additionally, if you’ve signed on with a motor carrier, this lowers your personal costs, often all the way down to $2,000 $4,000.

Factors that Affect Your Costs

There are a wide variety of factors that can affect the cost of your quote. Insurance companies evaluate certain aspects of your past and present before determining the price, so make sure you are familiar with each of the following. These factors can include, but are not necessarily limited to:

  • The number of years that you’ve been driving a semi; more experience resulting in lower rates
  • What type of cargo you haul; the more expensive the cargo, the more expensive the insurance
  • How long your routes usually are; the shorter the route, the less risks associated
  • Your age, as younger drivers are considered less of a liability than seniors
  • Your credit history; as this helps determines how dependable you are at making payments
  • What type of payment plan you establish with the provider; the more payments per year, the better
  • Driving record/ number of accidents; a poor driving record will cause your rates to skyrocket

How to Lower your Insurance Costs

While many of these factors described above are out of your control, there are many things that you can do to lower your costs, the most being to stay accident-free. A clean driving record is essential to keeping insurance costs down, as pricing for coverage is largely influenced by your probability to cause a collision. Additionally, the more frequent your payments, the better, as it establishes trust between you and your provider. It’s recommended that you pay the whole premium in one lump sum every year, as it is a great way to keep your rates reasonable. This payment is easier said than done, but it’s a great goal to strive towards in your hauling journey.

Finally, to make sure that you’re getting the best possible quote, compare different prices between various providers. Some providers may be more lenient with their conditions, thus leading to a better quote.

The cargo transport industry can be complex and confusing, especially when dealing with insurance costs. That’s why we make semi-truck financing easy with our simple loan application and approval process!

Self-Driving Semis: The Future of the Trucking Industry

Photo Credit: Wired

As artificial intelligence increases in modernity and practicality, its usage increases across all industries and fields, and trucking is no exception. Society is slowly warming up to the idea of self-driving cars, but self-driving semi-trucks is severely more frightening of a concept. Self-driving semis seem riskier because they’re bigger and more physically intimidating, but the technology is not as different as you might think.

Government Involvement

United States government research facilities have allowed for the testing of self-driving vehicles nationwide. Over 12 states have rolled out programs to test the practicality and safety of self-driving trucks and ultimately the Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) will determine the rules and regulations. This government involvement will limit the extent of biases from specific companies.

Is Autonomous Technology Safe?

One of the main public concerns is safety. Software can often be inconsistent due to bugs and programming errors, and people tend to trust themselves more than a computer. Industry experts are even predicting that once the technology is perfected, this AI opportunity could dramatically increase safety on the roads. Humans make mistakes, and machines are typically much more consistent and predictable since they’re automatic in their decision making.

Additionally, autonomous driving comes with the added benefit of an instant reaction time, eliminating the single largest source of automotive accidents, which is human error. The number of front and back-end collisions will be reduced because this technology will monitor and maintain safe distances between vehicles.

You’re not Giving up ALL Control

While these advancements are coming at us quick, the transition definitely won’t be instantaneous. The switch to self-driving vehicles will most likely happen in smaller pieces incorporated into the current system. For the foreseeable future, automation in large scale transportation vehicles will still be overseen by a living, breathing human. There will be a tech-savvy person in the cab catching any technical errors or insights that need to be handled. This measure will mostly be a “just in case” sort of arrangement.

Theoretically, the truck should be mostly automatic, but it’s important to have a safety net, especially since these trucks will be on the roads with non-self-driving vehicles. Human error is simply something that cannot be planned for or programmed into a software, so the human presence is mostly to account for other drivers on the road and not the truck itself.

Job Security

This component of the process is also important to the livelihoods of truckers everywhere. A big concern with self-driving semi-trucks is that they will put drivers out of work and damage the industry and culture that truckers have built. Since self-driving cars will still have to be monitored and accompanied by actual living people, truckers will be able to stay employed even if their job becomes slightly more automatic.

Decreasing a Driver’s Heavy Workload

One of the biggest problems in the trucking industry right now is overworked drivers. There is currently a national driver shortage that is leading to tired and overstretched days that result in decreased productivity and an increased risk of mistakes and accidents. As mentioned previously, we would be gradually easing into this new era of self-driving vehicles. That would mean that slowly, the workload for truckers would get more and more manageable as we settle into these new advancements. The exhaustion and over-exertion of the job could potentially be a thing of the past.

Companies That Are Making It Happen

There are many companies who want a place at this table. It is projected to be the future of the industry, therefore companies such as Embark and Daimler are starting to invest more and more in recent years into the process. Embark comments that self-driving semis are even more crucial to the future of our roads than self-driving cars. The incredible influence that this technology could have on delivery, productivity and general efficiency in countless industries makes this all a huge potential for profit.

This is an immensely controversial topic. Many fear for what self-driving vehicles mean for safety and job prospects alike. While it’s impossible to truly predict these things until we see them happen in real time, industry experts are optimistic about what it means for drivers and their employers. If this transition goes as predicted, companies can increase profits and drivers will have improved qualities of life, all with the benefit of added safety. Autonomous vehicle testing is already in progress and growth and development of this new and innovative technology is expected to blossom in upcoming years.

At Mission Financial, we’re here to help you start your trucking career with semi-truck financing options.  We have amazing rates, customer service, and informative resources that will help you make the smartest decisions when getting started.

Uber Chooses Chicago as Its New Freight Headquarters

Image credit: Cargo Trans Inc

 

Uber recently announced that it would be funding a new Freight Business Headquarters in Chicago, Illinois. They revealed plans for office space in the famous River District taking up residence in a historic Post Office that has been uninhabited for years, until now. Their goal is to streamline their entire operations by centralizing corporate space.

The branch of the popular drive-share service allows for semi-truck drivers to lend their services to a variety of businesses on a more temporary basis than traditional industry contracts. The division matches shippers to truckers than can fulfill their needs, allowing truckers to have increased control when and where they work. Drivers can select a route or trip individually and receive pricing and timelines upfront. This program is available throughout both the United States and Europe.

Company Growth

The young company started its Freight Division a little over two years ago in May of 2017 and has already grown at an astonishing pace. The digital broker has expanded to $350 million in gross annual bookings in that short time, according to early-year paperwork. Reportedly, the business services 400,00 drivers to 1,000 businesses needing shipping. This growth led to a need for an increase in infrastructure, hence the search for a new headquarters. This astonishing progression is what has allowed Uber to make a name for itself alongside more traditional freight companies.

Why Chicago?

Chicago has long been a popular shipping hub, making it a good place for drivers to flock to for dependable work. The transportation industry has blossomed in the area to allow for a large pool of qualified trucking experts and professionals that will set Uber up for success when they begin their employing process. The area is also known for its logistics expertise which will hopefully aid in development. Uber Freight also already had about 1,000 employees in the area, which will be a great starting point when building the operation. The area is also known for its tech talent, helping to advance the technological future of trucking.

The Investment

The current estimate of investment sits at around $200 million going into the region annually through Uber Freight, which contains the potential for tremendous impact. The growth that this could bring to the transportation hub that is already thriving in Chicago is potentially boundless. While Uber faces competition from more established companies such as the Seattle-based Convoy, this hefty investment should help Uber compete with older and more seasoned veterans. To an extent, it has already paid off. The big company has already landed deals with expensive clients such as Land O’ Lakes.

The Immediate Impact

This has been an immensely controversial announcement due to the fluctuating reputation of Uber themselves. While Uber claims that their involvement in the areas has brought upwards of $1 billion through its involvement over the past few years, the company has a reputation for clashing with local government. This leaves many Chicago locals concerned for how the big business will impact the integrity of their city. Whether or not you agree with the moral standings of the company, it’s clear that this development will bring a steep increase of transport and related jobs to the area, as well as a significant amount of added income for the city and its people.

In addition to the immediate impact on the area, it brings change to the trucking industry in general with the new structure of the program. The structure of the program allows drivers to have significantly increased control over their hours since they can accept trips on a case-by-case basis that allows them to work as much or as little as is necessary. This could be an immensely beneficial revolution for the industry. It would help to eliminate excessive hours that are often forced onto truckers by their employers, which would benefit their overall quality of life. On the other hand, there is currently a national driver shortage in long-haul trucking, and companies wouldn’t have to hire full-time truck drivers and could instead fill in gaps with whatever drivers want to work on that route.

The Future of the Industry

What Uber has done with the traditional structure of acquiring drivers is revolutionary. The phone-based booking system allows drivers to have more control over their routes and see the payment plan upfront. While the rates for routes are somewhat inconsistent, experts agree that this internet-based agreement system is the route for the industry in the immediate future in response to recent national shortages. The system will additionally improve efficiency. Companies can get more routes done in a shorter amount of time because the system doesn’t have a set number of drivers. They can send more people out onto the road without having to wait for the previous drivers to return from their routes.

To learn more about the changing transportation and freight industry, check out our blog today!

 

Pros and Cons of Purchasing a Used Semi-Truck

 

There are countless factors to consider when purchasing a semi-truck, and it’s important to carefully consider them all. In the complex and dynamic world of trucking, it’s easy to become overwhelmed with all of the various facets. One of the most important decisions when it comes to buying a semi-truck is whether to go with a new versus a used vehicle. While both have their individual pros and cons, many drivers choose to go with a used truck for various reasons.

If you’re considering purchasing your first semi-truck, it is important to consider the logistics of the purchase. Here are some factors to consider when weighing the pros and cons of a used semi-truck vs a new one.

Budget Talk

Obviously, one of the most important variables during this entire process is going to be your budgetary limitations, assuming they’re present. A used truck can be significantly cheaper than a new one, while still gaining all the features you want. A new truck tends to run you upwards of $150,000 and beyond. For many people, especially those for whom this is their first truck purchase, this is a wildly unobtainable expense, especially when trying to get started in the business.

A used truck gives you a more reasonable beginning expense that is likely more easily tackled while maintaining financial stability on your new journey. You can often find a used truck in  good condition for under $75,000, which is vastly more accessible for someone with a stricter budget.

A lower initial cost can also be immensely beneficial for your loaning process. The smaller cost means that you’ll have less to actually finance, leading to drastically lowered loan rates that can save you a lot of money down the road. Check out this helpful resource for more details on semi-truck loans and commercial vehicle financing.

Used Semi-Trucks are Lower Risk

Because the initial cost is lower, it also lowers your risk factors significantly in terms of financial loss. Lower costs up front mean that a change of course down the line is not as huge of a blow to your wallet when a particular truck doesn’t work out the way you might have initially intended. This is also a potential benefit to people or companies who are just starting out. New beginnings contain immensely exciting potential, but they also often aren’t the ideals that we dream of. Lowering initial investments help you keep your losses in check if you decide for a change in career path, or simply a shift in the direction of the company. A used truck allows for an easier change in track than a new truck, because the heavy commitment that comes with a new truck is far more binding. 

Potential for Great Quality

Going the used route for your semi-truck purchase doesn’t always mean that you have to sacrifice on the general quality of the truck. Used trucks, if they are somewhat recently produced or renovated, or simply well maintained by their previous owners, can be in excellent condition for you or your staff to utilize. Going for a model that is only a few years old might provide many of the same features that you would typically look for in a new truck, without the hefty price tag that comes along with the “new” sticker.

In fact, many seasoned trucking veterans prefer older trucks to their newer counterparts. It is often insisted that older trucks are sturdier, stronger, and generally more reliable than new trucks. When it comes to valuable opinions, it doesn’t get much more immediate than the drivers themselves, so make sure that you listen to their opinions and desires in order to make the best purchasing decisions for you or your company.

Used Semi-Trucks: Potential Pitfalls  

While there is a hefty plethora of reasonable benefits that come along with choosing a used truck over a new one, there are also different risks that come along with the territory. There are certain conditions associated with any used vehicle that put you at a higher risk for mechanical problems, increased repairs and heightened operational costs.

The cons of a used semi-truck include, but are not necessarily limited to:

  • Increased mileage
  • High-polluting, diesel engine
  • Internal wear and tear such as seat tears or any internal material damage
  • An unknown history that can lead to unexpected repairs or damages
  • Unknown habits of previous driver that could have led to excessive mechanical strain

Weighing the Pros and Cons

All of these factors add risk to your truck buying experience, but it’s up to you and your team to decide if you’re ready to tackle them for the financial benefits that a used truck provides. While a used semi contains many unknowns, many owner operators have found it to be the best option for their current situation. Just make sure that you do plenty of research and properly educate yourself before committing to such a significant purchase.

To get started in the wild world of trucking, apply for a semi-truck loan and begin the process today. You can also stay up to date on the latest industry news and gain insight into this dynamic field with our blog.

 

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Alternatives to Diesel Fuel: Reducing Emissions with Electric Semi-Trucks

Image Credit: Tesla

 

In the wake of the popularization of electric cars, scooters and bikes, sustainability is one of the most controversial buzzwords in the transportation industry. Reducing air pollution and fuel consumption is a worldwide obsession and the biggest names in the automobile industry are playing right along. Developers are consistently expounding on ideals of efficient trucking, but the practicality of such is up for substantial debate.

Semi-trucks are one of the only remaining transportation systems that hadn’t been seduced by the glamour of electric and increasingly sustainable fuel sources, until now. Diesel big rigs have been running the game for far too long and now is finally the time for more environmentally-friendly options. Get ready, because the trucking industry is going green at a stunningly fast rate.

Tesla’s Electric Semi-Truck is Here

Electric-operated semi-trucks are emerging more than ever. Modern intelligence mogul Elon Musk recently announced a new option for truckers worldwide who were looking to lower fuel costs, reduce emissions, and achieve maximum efficiency in their resource usage. From the popular yet controversial brand Tesla, the new semi-truck option has the entire trucking community buzzing.

Simply called the “Tesla Semi,” the new truck has sparked provocative discussions about the practicality of the green movement for the entire trucking industry. Musk asserts that not only is this option better for the environment and pollution levels, it’s beneficial for the truckers themselves. In a mockup, he compares the acceleration efficiency of his Semi to a traditional diesel truck. The new Tesla truck supposedly can go from 0-60 miles per hour in a mere 20 seconds, an acceleration rate which would greatly increase on-road efficiency and traffic flow for truckers.

On top of the mechanical superiorities, Tesla claims that this new innovation will help to save costs with an estimated $200,000 in fuel savings. While this number may seem appealing initially, it’s estimated for over a span of two years and might not outweigh the additional costs that come along with such a high-tech purchase. With an expected base of $180,000, it’s no mystery why many truckers are skeptical of the payoff. While an electric truck may save in fuel, such a high cost upfront isn’t realistic for most truckers, leaving them still searching for more financially realistic diesel alternatives.

Fuel Cell Alternatives

A slightly less costly way to achieve an alternative power source for the trucking industry is through hydrogen-fuel cell powered vehicles. Hydrogen fuel cells create energy without burning the same polluting outputs as conventional diesel. Combining Hydrogen and Oxygen creates a power source that has been found to be remarkably efficient for transportation.

Toyota, a more traditionally obtainable brand is releasing its first truck powered by hydrogen fuel cells in the last quarter of this calendar year. They partnered with Kenworth Trucking Co. for their mutual goal. They seek to reduce emissions at major U.S. ports that were experiencing especially bad air pollution from the high trucking traffic that took place there. The truck is fitted with two fuel cells that have been determined to provide substantial power for the alternative semi-trucks.

Toyota and Kenworth both assert that this move was motivated by environmental awareness, but it coincidentally is a politically popular move. They are seeking to eliminate air pollution caused by heavy trucking routes and develop more sustainable practices to propel trucking into the future of fuel technology.

This truck is suspected to be slightly more affordable upfront, since the funding for the research and production of these vehicles was partially funded by government initiatives that sought to reduce large masses of harmful emissions, which pose a threat to public health. Public funding will most likely lower final costs to consumers as those expenses aren’t factored into base costs.

Electric vs Hydrogen Fuel Cell Power

Both hydrogen-fuel cell powered trucks and full-electric trucks have their individual benefits in respect to efficiency and reductions in emissions, but it’s hard to definitively say which is the superior choice for a trucker seeking zero-emissions options. The final decision will depend on the individual needs of each route.

Additional factors such as charging/fueling opportunities and availability can sway the practicality option of these developments drastically. Developing charging stations and fueling ports for hydrogen cells will require substantial updates to major highways and interstate peel-offs in order to accommodate the long, often expansive routes of cargo delivery drivers. If this trend flourishes, alternative fueling stations will need to massively grow in abundance to accommodate the nature of the industry itself.

The trucking industry contains infinite intricacies that can often be complex and unpredictable, so it’s immensely important to properly educate yourself before exploring any type of alternate semi-truck options. Even if you’re not ready to commit to the investment of alternatively powered semi-trucks, there are lots of ways fleet owners can conserve fuel and help reduce emissions. Check out other helpful tips and keep up with the latest industry news with Mission Financial.

DOT Overturns California Trucking Regulations

 

California tried to update its trucking laws to more closely resemble a typical work environment but was recently overruled. In an office setting, it’s suggested that employees take frequent breaks to stretch and refocus. Getting up from a desk and getting time away from the harsh blue light of a computer can be helpful for workplace wellness. While small breaks throughout the day are fine when you have to merely stand up from a desk, frequent breaks are more of an interruption than a relief for truckers.  When government regulations attempt to force them into the same box as office workers, their needs aren’t being properly met.

California’s Strict Break Requirements   

Typically, drivers get a 30-minute meal break per day and are not permitted to drive for more than 11 hours at a time. The U.S. Court of Appeals for the Ninth Circuit passed a law in 2014 that required California drivers to take a paid 10-minute break every 4 hours and a 30-minute meal break every 5 hours. The breaks were also required to be taken separately as to further break up driving. The law also pushed back total driving time allotted to 12 hours before stopping for the day to sleep and rest. These regulations are considerably stricter than the surrounding states’ rules, particularly the 10-minute break requirement that only adds tediousness to a drive. The inconsistency between states has drivers fearing for the efficiency and predictability of their routes.

Flaws in the Plan

While consistent breaks work effectively in a traditional office environment, the trucking industry is unique and doesn’t conform to the same standards of a typical workplace. After the passing of this law, national protest came from industry officials and benefactors alike. One group in particular who signed numerous petitions was the American Trucking Association (ATA). The law was designed by people who were supposedly unfamiliar with what truckers and transport businesses actually want and need. The law would greatly differ from regulations in other states, and therefore robs drivers of their consistency and routine. Having such different regulations from one state to another doesn’t allow truckers to properly plan their meal breaks and rest stops, as the timing would become complicated and tiresome.

Additionally, stopping too frequently breaks up work flow in a way that can actually be more tiring for drivers. In a more conventional office, breaks might help to relax and ease the stress of a workday, but for truckers, it can do the opposite. It also significantly cuts down on efficiency, so it’s a taxing financial regulation as well; less productive drivers mean longer transport times and more money spent per route. More time pulling off of the highway to take excessive breaks leads to less distance covered per day and therefore higher costs for transported product and harm done to the American consumer. In fact, driver productivity in California was reduced by three percent after these regulations were passed, according to an FMCSA Administrator.

FMCSA Grants Petitions

In 2018, the ATA filled a petition with the Department of Transportation (DOT) that proved all of the following points:

  • “California’s meal period and rest break laws offer no additional safety benefit beyond the safety benefit generated by the hours-of-service requirements
  • The laws are incompatible with the hours-of-service regulations enforced by the Department of Transportation
  • The meal and rest break laws cause an unreasonable burden to drivers and carriers operating in interstate commerce”

After a long debate, the DOT and Federal Motor Carrier Safety Administration (FMCSA) granted the petition, stating that California trucking companies were no longer required to provide paid rest and meal breaks. While the law was initially set in place to create safer driving conditions for truckers, industry gurus asserted that more national consistency would lead to safer trucking practices as opposed to additional breaks.

Standards for American Drivers

While regulations that require excessive breaks can be a burden for productivity, the intent behind the California law was to decrease worker exploitation in the trucking industry, which is a persistent problem. Commercial truck drivers are often forced to work long hours without substantial breaks, and while California overstepped in execution, the industry is making strides by putting these necessities in a federally sanctioned domain. Truckers already work some of the country’s longest and most tiresome hours in our nation and need helpful standards to prevent their hard work from being exploited. Now that California trucking companies are no longer required to provide paid breaks, drivers can choose when and how they take them.

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