driving a truck

Driving A Commercial Vehicle Without Insurance

driving a truck

Commercial auto insurance is essential for any truck driver. Operating a commercial vehicle without this insurance is illegal.

Not only this, but truck accidents are common, and you need to make sure you and your business are protected to stay safe. The right insurance policy will give you valuable peace of mind on the roads, and it can seriously help you in case there is an emergency.

Let’s explore insurance requirements for truck drivers, and why having proper commercial insurance is so important.

The Insurance Requirements for Truck Drivers

In order for any trucking business to operate, it needs to have proper proof of liability and cargo insurance. This needs to be in line with federal trucking insurance requirements, which is necessary for the Federal Motor Carrier Safety Administration (FMCSA) to issue an operating permit.

The exact coverage types depend on the type of freighter and the type of cargo you haul. Here’s a breakdown of the FMCSA mandatory coverage minimums for large trucks:

  • $300,000: Trucks weighing under 10,001 pounds that do not haul hazardous materials.
  • $750,000: Coverage required for trucks weighing over 10,001 pounds that do not haul hazardous materials.
  • $1,000,000: Coverage required for private drivers and companies that haul oil.
  • $5,000,000: Coverage required for trucks that haul hazardous materials other than oil.

Beyond complying with these federal trucking insurance requirements, trucks also need to comply with specific state requirements. This can vary by jurisdiction.

It’s important to realize that these are only the minimum insurance requirements for commercial trucks. More advanced truck insurance is available, offering trucking companies and drivers better protection in the event of an accident.

insurance cover 2

What Does Commercial Vehicle Insurance Cover?

Commercial auto insurance can cover many areas. Every policy is different, and every commercial motor carrier has its own insurance requirements.

A commercial or personal auto insurance policy typically includes liability coverage, protecting against damages to other people or property, and physical damage coverage, which covers damage to the vehicle itself. A commercial auto insurance policy also often includes coverage for medical payments, uninsured or under-insured motorist coverage, and cargo insurance, which covers the goods being transported.

These policies make sure that businesses are protected financially in case of accidents, damages, or other mishaps involving their commercial vehicles. Understanding the coverage is crucial for businesses to make informed decisions that give them proper protection.

What Happens After a Truck Accident Without Insurance?

Commercial and personal car insurance is important because it offers protection against many scenarios. To help explain this, here are some of the main consequences that you can expect after an accident with no commercial or personal auto insurance policies involved.

Legal Consequences

Driving without insurance breaks the law in almost every state. State laws usually require all drivers to have a minimum amount of liability insurance. Failing to comply with these laws can lead to fines, the suspension of your driver’s license, or other penalties.

Payments in Civil Lawsuits

The financial consequences of a commercial accident can be massive. Without insurance, you may be personally responsible for covering all damages and medical bills.

If you are found to be at fault for the accident and do not have insurance, you may have to pay for the damages out of pocket. This could include the cost of repairing or replacing vehicles, medical bills for injuries, and even compensation for pain and suffering.


Loss of Assets

Driving without insurance can result in higher insurance premiums in the future. Insurers may view you as a higher risk.

Even if you can obtain insurance after an accident, your premiums are likely to be significantly higher because of your accident history. Insurance companies may view you as a high-risk driver and charge you higher premiums to offset the risk of insuring you.

If you’re found liable for the accident and can’t pay, your wages could be cut, or you might even lose your job. If you cannot pay for the damages resulting from the accident, the injured parties may seek a judgment against you.

Impact on Others

If you are involved in an accident without insurance, the other party may not receive the compensation they need to cover medical bills, lost wages, and other expenses.

This can cause significant financial hardship for the victims and their families, who may be left to cover these costs on their own. You don’t want to be responsible for this.

Penalties for Driving Without Insurance

As we’ve already mentioned, having proper insurance coverage is a legal requirement for commercial truckers. Driving without insurance can lead to strict penalties, including fines, suspension of your driver’s license, and potential criminal charges.

If you cause an accident as an uninsured truck driver, you could also be held personally liable for all damages, which can be seriously expensive. This could have a long-term effect on your personal and professional life as a truck driver.


When Do You Need Commercial Vehicle Insurance?

Wondering when to contact an insurance company and when you need commercial auto insurance? Consider the following scenarios:

  • If you run a delivery service: If you’re delivering goods as part of your business, you need commercial vehicle insurance. Personal auto coverage usually won’t cover business-related deliveries.


  • If your employees operate your vehicle: If employees use your vehicle for work, you need commercial vehicle insurance. Personal car insurance policies don’t cover business use by employees.


  • If you have a fleet of vehicles: If you own multiple vehicles for your business, you need commercial vehicle insurance. It provides coverage for all vehicles under one policy.


  • If you transport goods or passengers: Whether you’re delivering goods or transporting passengers, you need commercial vehicle insurance to cover any accidents or damages that may happen during transportation.


  • If your industry is high-risk: If your business operates in a high-risk industry, such as construction or trucking, commercial vehicle insurance is essential to protect your assets and cover potential liabilities.


  • If you haul tools or equipment: If your business involves hauling tools or equipment, you need commercial vehicle insurance. It covers damages to your vehicle and any equipment being transported.


  • If you’re leasing or financing your vehicle: If you’re leasing or financing a vehicle for business use, you need commercial vehicle insurance. It’s usually required by the leasing or financing company to protect their investment.

Final Thoughts

As a commercial truck driver, you need to have the right insurance policy in place. This is essential for your safety, as well as for protecting anyone else on the roads. Beyond the fact that it’s a legal requirement, commercial insurance is also essential for keeping your business protected in case of an accident.

Looking to purchase a new truck? Then you’ll need the right financing. Get in touch with us at Mission Financial to see how we can help you get easy financing for your semi-truck.

GAP Insurance For Semi Trucks

Understanding Gap protection is essential for those leasing or financing their trucks. It proves valuable when your business vehicle is stolen or deemed a total loss in an accident, and you still owe on the loan. 

While gap insurance is typically supplemental, it’s worth considering shielding your business from unforeseen financial setbacks that could disrupt operations. Need to grasp what gap insurance is, how it operates, and who requires it? 

Here’s a brief guide to help you understand everything and determine if it’s necessary for you.

What Is Gap Insurance?

Gap insurance stands for guaranteed asset protection insurance. It’s an add-on insurance coverage that protects you if an unrecovered theft or total loss of your truck occurs.

If your loaned or leased business vehicle is stolen or irreparably damaged in an accident and you still owe money on your loan, your insurance company will typically compensate you based on the vehicle’s actual cash value or its stated value at the time of the incident. 

This reimbursement reflects the current market value of a similar vehicle, not necessarily the amount you initially paid for the vehicle or the remaining loan balance.

Because vehicles depreciate fast, losing about 20% of their purchase value within a year, the actual value amount your insurer pays will probably not be enough to clear your outstanding loan balance. And this is where gap coverage comes in. 

Gap insurance helps cover the difference between your insurer’s standard comprehensive or collision coverage payout and the remaining loan or lease balance. So you can clear the amount you owe your lender and avoid making loan payments for a truck that no longer exists or is inoperable.

To qualify for gap coverage, you must have other auto-insurance coverage options, specifically comprehensive or collision coverage, on your policy.

What Does Gap Insurance Cover? 

Unlike most types of commercial truck insurance, GAP insurance coverage does not cover bodily injuries or pay for property damages and repairs. Instead, it works as a safety net, helping you clear your outstanding loan balance if you suffer total loss for your truck. 

Also, note that GAP insurance doesn’t cover extra charges associated with your loan, like finance and excess mileage charges. 

Who Should Get A Gap Insurance Cover? 

Consider purchasing gap insurance coverage if you:

  • Are operating on a lease. Gap insurance is a requirement for obtaining a lease from most lenders.
  • Have a long financing term for your truck. The longer you finance your vehicle, the higher the chance you’ll owe more than the vehicle’s worth, since your truck will continue to depreciate with time. 
  • Have a low down payment on your new truck purchase or none. If the down payment you made when buying your vehicle was less than 20% (or none) of its purchase price, you’ll probably get negative equity once you leave the dealership. It will be wise for you to purchase gap coverage to protect your business from negative equity.
  • Want to protect your business assets from depreciation? Some vehicles depreciate faster than others. You’ll benefit from gap insurance if your truck falls under this category. Here’s how to calculate your vehicle’s depreciation rate to determine if gap coverage is necessary.
  • Have a loan rollover. Say you transfer your existing car loan balance onto a new vehicle loan. If your new loan is more than your vehicle’s worth at the time of loan renewal, gap coverage will be helpful to you.

What Is The Difference Between Gap Insurance And Commercial Auto Insurance?

Commercial auto insurance is mandatory for businesses to operate in nearly all states. It covers all the cars your company uses for business, offering protection against specific risks, including collision and non-collision incidents and their aftermath. 

Gap insurance works as an optional add-on coverage. You’ll have to purchase other commercial auto insurance policies before getting it to boost your financial stability. Gap insurance also works well for the business vehicles you finance through a loan or lease – it doesn’t apply to all commercial vehicles like commercial auto insurance. 

Further, gap protection doesn’t cover various risks as commercial auto liability insurance does. Instead, gap insurance covers the difference between your truck’s actual cash value and the amount you owe your leasing agency or lender.

How Long Does Gap Insurance Last?

Once you include gap coverage in your insurance policy, it remains active for the duration of the policy. But you can cancel it when you keep making payments and reduce your loan balance to less than your vehicle’s current value. You’ll have to monitor your loan balance against your truck’s market value regularly to know when to cancel the insurance.

How To Purchase Gap Insurance

The simplest, most affordable way to purchase gap insurance is to check with your insurer and see if they can include it in your existing policy. If not, consider getting it from a trusted vehicle financing institution like Mission Financial Services. You can also get gap insurance from car dealerships, although their price will likely be higher than most insurance companies.

Final Thoughts

Although optional, Gap coverage is essential, especially if you’re on a loan or lease repayment plan. It will save you from paying loan debt on a totaled truck, i.e., a truck that can no longer make you money. 

Also, some providers offer additional benefits with their gap insurance packages and at low costs. With Mission Financial Services gap protection, for example, you’ll be fully covered (including reimbursement for your insurance deductible) after an unrecovered theft or total loss event.

You can enjoy the peace of mind you need to grow your business, knowing you won’t have to pay anything out-of-pocket in the unfortunate event you lose your loaned truck before clearing its loan. 

To learn more about how our add-on coverage options work or how we can help finance your new or used commercial truck purchase after a total loss, reach out to us. We’re always ready to help you thrive.

commercial vehicle accident

Commercial Vehicle Accident Loans

commercial vehicle accident

If you’re involved in a commercial vehicle accident, chances are you’ll have a lot of unexpected expenses to deal with. This is where a commercial vehicle accident loan becomes incredibly valuable. 

These vehicle accident loans help you by providing pre-settlement funding, which can cover any immediate expenses from the accident. Let’s explore this in more detail in the guide below.

Understanding Commercial Auto Accident Loans (Legal Funding)

Commercial auto accident loans, also known as legal funding or car accident loans, provide financial assistance to people involved in commercial auto accidents. 

When you’re in a commercial auto accident, the costs can quickly add up – including medical bills and lost wages if you can’t work. These loans can help cover your expenses during this tough time. They’re designed to provide immediate financial relief, allowing you to manage your bills and daily expenses while you focus on recovery.

In many cases, people will take out a car accident loan to help see them through while waiting for a car accident settlement from the insurance company.

Consequences of Tractor-Trailer Injuries

Car accident settlement loans exist because occurrences like tractor-trailer injuries can have major consequences.

Because of the size and weight of tractor trailers, accidents involving them often result in severe injuries, including broken bones, spinal cord injuries, and traumatic brain injuries. These injuries can lead to long-term physical and emotional challenges, impacting a person’s ability to work and perform daily activities. 

Medical bills can quickly accumulate, causing financial strain. In some cases, victims may require ongoing medical treatment and rehabilitation, further adding to the financial burden. 

The psychological toll of these injuries can also be substantial, affecting one’s mental well-being and quality of life. 

This is why it’s crucial for anyone injured in tractor-trailer accidents to seek proper medical care and legal assistance to address their physical, emotional, and financial needs. Car accident claims from a personal injury lawsuit can cover these expenses, while a car accident loan can provide immediate relief.

Are Commercial Accident Loans Actually Loans?

Commercial accident loans are not actually loans in the traditional sense. Instead, they’re types of cash advances provided based on the potential car accident settlement from the case. 

This means that repayment is based on the existence of a car accident settlement. If there is no settlement, there is no obligation to repay the borrowed amount.

While it’s called a car accident loan for convenience, it doesn’t fall under lending laws, as it doesn’t involve typical loan agreements or repayment terms. It’s more of a pre-settlement car accident payment as a cash advance than it is a loan.

How Exactly Will A Commercial Accident Loan Help Me?

Taking out a car accident settlement loan can provide a valuable cash advance for some of the biggest areas impacted by an accident.

Medical Expenses

A car accident loan can help cover your medical expenses, including hospital bills, medications, and rehabilitation costs. This financial support allows you to focus on your recovery without worrying about the burden of healthcare expenses.

Mortgage or Rent Payments

In the aftermath of an accident, a car accident loan can help with paying your mortgage or rent payments. This ensures that you can maintain stability in your housing situation during your recovery period – something that’s important if the accident puts you out of work.

School or Tuition Fees

Another benefit of a car accident loan is that it can help to cover school or tuition fees. Whether it’s for yourself or your dependents, this financial assistance ensures that education remains uninterrupted despite the accident’s impact on your finances.

How Do I Qualify for Legal Funding?

If you’ve been involved in a commercial accident, then securing a car accident settlement loan can also help you get funding for your legal needs. This is important to ensure you get the legal representation you deserve in a car accident lawsuit.

Qualifying for legal funding for a car accident lawsuit generally involves three key areas.


To qualify for legal funding, it’s essential to establish liability – meaning that someone else’s negligence led to the commercial vehicle accident that you were involved in. This can involve proving that the other party breached their duty of care, resulting in the accident and your injuries.


Another crucial factor in qualifying for legal funding is having proper commercial truck insurance coverage from the right insurance company. 

Legal funding providers often rely on the potential for a settlement or judgment to recover their funds. Therefore, it’s necessary to have coverage from an insurance company that can compensate for the damages resulting from the accident.


To qualify for legal funding, the damages resulting from the accident must be substantial enough to warrant legal action and potential compensation. 

These damages from a car accident claim could include medical expenses, lost wages, property damage, and pain and suffering. Providing evidence of these damages is essential in showing the need for financial assistance through a lawsuit loan.

How Can I Use Legal Funding for My Truck Accident?

Car accident loans and legal funding can be incredibly valuable in navigating the aftermath of a truck accident. Here are some of the main ways that a car accident lawsuit loan, or legal funding, can help you.

Covering Immediate Expenses

One way to use legal funding is to cover immediate expenses resulting from the truck accident. This can include medical bills, vehicle repairs, and other out-of-pocket costs incurred as a direct result of the accident.

Having this available as a cash advance through car accident lawsuit funding ensures your life keeps on moving without interruption.

Replacing Lost Income

If your injuries from the truck accident prevent you from working, legal funding can help replace lost income during your recovery period. 

Hiring Legal Representation

Legal funding can also be used to hire a commercial vehicle accident lawyer to advocate for your rights and pursue compensation on your behalf. 

This includes hiring a skilled attorney who can thoroughly investigate the accident, gather evidence, negotiate with insurance companies, and represent you in court.

Peace of Mind

Overall, legal funding provides peace of mind during a stressful and uncertain time.

By alleviating the immediate financial strain and providing the resources needed to pursue your case, legal funding allows you to focus on your recovery and achieve a fair outcome in your truck accident claim.

Is Getting a Commercial Accident Settlement Loan the Right Move for Me?

Deciding whether to go for car accident loans depends on your individual circumstances. If you’re facing financial strain from the accident, car accident loans can provide much-needed relief by covering these expenses upfront. 

However, it’s essential to understand how car accident loans work and to ensure a pre-settlement car accident loan is possible based on your specific situation. 

Final Thoughts

Auto accident settlement loans are always worth considering if you can secure them. Unlike traditional loans, they shouldn’t involve financial risk. When properly managed, a car accident cash advance can offer much-needed financial assistance to help you deal with the aftermath of the accident and see you through car accident lawsuits – which can be an expensive process.

Looking to purchase a new commercial vehicle after an accident? Then getting the right vehicle funding is essential. Speak to us at Mission Financial to see just how easy it is to get funding for your new semi-truck.


temporary insurance

Temporary Insurance For Semi Trucks

temporary insurance

Getting the right commercial vehicle insurance is essential for any truck driver. While long-term policies are the norm, there are certain scenarios where you may need a temporary insurance policy. Making use of these policies is important, as you need to ensure your vehicle is properly covered whenever it’s on the road.

In this guide, we’ll break down what you need to know about temporary truck insurance – including options for 30-day and 24-hour insurance policies.

What is Short-Term Truck Insurance?

Short-term truck insurance is a temporary insurance policy that provides coverage for commercial trucks for a limited duration.

This type of insurance meets the specific needs of trucking companies or owner-operators who don’t require year-round coverage.

Why Do Truckers Need Temporary Truck Insurance?

Instead of opting for permanent insurance, truckers might choose short-term trucking insurance they can use for specific business circumstances. These include:

  • Temporary operations: When a trucking company or owner-operator needs coverage for a brief period, such as during a special project.
  • Seasonal work: Some trucking businesses experience seasonal fluctuations in demand. Short-term insurance allows them to obtain coverage only during the busy seasons when their trucks are in operation.
  • Rental or borrowed vehicles: If a company temporarily adds a truck to its fleet or borrows a vehicle, short-term insurance can provide coverage for the duration of use.
  • Testing or maintenance periods: When a truck is undergoing testing, repairs, or maintenance and won’t be on the road for an extended period, short-term insurance can help maintain coverage without the need for a full annual policy.

What Does Temporary Commercial Insurance Cover?

This insurance type covers various aspects of commercial operations. It includes non-trucking liability insurance, which protects against third-party claims.

Temporary commercial insurance often includes coverage for physical damage to owned or leased vehicles, protecting against losses such as collisions or theft.

The specific coverage details of your temporary policy may vary based on your needs. After all, the main purpose of temporary commercial insurance, or temporary bobtail insurance, is to provide flexibility.

What is Not Covered by Temporary Commercial Insurance Cover?

While temporary commercial insurance covers specific short-term needs, it commonly does not provide coverage for certain areas.

This typically includes pre-existing damage to vehicles, intentional acts of the insured that result in damage, and certain types of high-risk activities.

Insurance policies may also exclude coverage for non-business-related use of commercial vehicles.

Policies may also have limitations on coverage for specific types of cargo or may exclude certain hazardous materials. Temporary bobtail insurance or non-trucking liability insurance may also require a unique policy.

Types of Temporary Insurance for Commercial Vehicles

As a motor carrier, you can choose between various types of temporary coverage. Here are two of the main credible insurance coverage options over a temporary period.

30 Day Short Term Truck Insurance

30-day short-term truck insurance provides coverage for commercial vehicles lasting for a month.

It typically covers liability, physical damage, and other relevant aspects of commercial truck insurance for the designated 30-day period.

24-Hour Truck Insurance

24-hour truck insurance offers coverage for commercial vehicles on a daily basis. This type of insurance is designed for situations where coverage is needed for a very brief period, sometimes just a single day.

Who Needs 24-Hour Truck Insurance?

Here are two common scenarios where 24-hour insurance is used.

Transporting a New Truck

Businesses transporting a new truck from the dealership may opt for 24-hour truck insurance to ensure the vehicle is properly covered during its journey.

Moving Your Truck for Repairs

When a commercial truck needs to be moved for repairs or maintenance, 24-hour truck insurance can be valuable. It provides coverage for the brief period the truck is in transit to the repair facility.

Coverage Included in a 24-Hour Truck Insurance Policy

A 24-hour truck insurance policy typically includes essential coverage for the brief duration that it’s active. This type of insurance commonly provides liability coverage, protecting against third-party claims for bodily injury or property damage caused by the insured truck.

Physical damage coverage is also a standard inclusion, covering the cost of repairs to the insured truck in the event of accidents, collisions, or theft.

Additional coverage could be available depending on the policy and provider. While it offers temporary protection, it makes sure that the commercial truck and its operators are properly insured during the specific 24-hour time frame.

Factors That Affect The Short Haul Insurance Cost

Various factors influence the cost of short-haul insurance for commercial vehicles. It’s important that you understand these factors to help you get the best possible temporary policy for your needs.

The main things include the driving records of the operators, with a history of accidents or violations leading to higher premiums. The type and value of the commercial vehicles being insured also play a big role, as more expensive or specialized vehicles will typically cost more.

The coverage limits and deductibles chosen by the policyholder also impact the premium, with higher limits and lower deductibles typically resulting in increased costs.

The geographic area of operation, the nature of the cargo being transported, and the distance of the short-haul routes also add to determining the insurance cost. Insurers might also consider the safety features of the vehicles and any risk management practices implemented by the business.

Final Thoughts

As an owner-operator, protecting your truck is a top priority. This is why having the right insurance coverage at all times is critical for successfully and safely running your business.

Even if it is just a quick drive from the dealership to your facility, you need to make sure that your vehicle is always insured. Making use of temporary insurance policies can be incredibly valuable here, offering an essential safety net in case of an emergency.

Are you looking to purchase a new truck? Then getting the right financing is your first step. See what we offer at Mission Financial Services- the easiest way for truck drivers and owner-operators to acquire financing for a commercial vehicle.


Commercial Tow Truck Insurance 


Getting commercial tow truck insurance is mandatory in most states if your business operates tow trucks. It’s also a requirement in most lease and contract agreements to ensure you can handle the additional, unique risks of running various tow truck business operations.

Below, we discuss what commercial tow truck insurance is, and what types of coverage your insurance policy should include if you want to run a towing business in several states.

We also highlight a few optional coverage options that different towing companies ought to consider helping you fully secure your specific towing business from various financial losses.

What Is Tow Truck Insurance?

Tow truck insurance is a commercial auto insurance coverage for towing companies. It considers how complex and expensive accidents involving tow trucks are and offers adequate protection from the financial implications of these incidents.

If a tow truck accident occurs and you are the at-fault party, you’ll be responsible for damages to your car, the towed vehicle, and other vehicles involved. This is besides covering the medical bills for all injured victims. In this scenario, the right tow truck insurance solutions will help you to:

  • Cover the repair and replacement cost of your truck, customer vehicles, and third-party vehicles involved in the accident (up to your policy limit)
  • Compensate injured victims for all the physical, emotional, and psychological losses incurred because of the incident (up to your policy limit)
  • Cover all legal fees throughout any lawsuits you may face after the accident (separate from your policy amount)

What Does Tow Truck Insurance Not Cover?

It’s critical to note that tow truck insurance does not cover the following:

  • Intentional damage – this includes any injuries or damage you inflict on other people or their property knowingly
  • Certain types of cargo, including explosives, pharmaceutical drugs, and alcohol
  • Damages beyond your policy limits – your towing truck insurance company will only cover damages and expenses to a maximum of your policy limit per incident.

Tow Truck Insurance Requirements

Following the U.S. federal law, all tow truck operators must purchase auto liability insurance to conduct their business. This is the minimum tow truck insurance requirement in all states. Other requirements vary from state to state.

Some regions require you to get the following:

  • Medical payments coverage
  • General liability coverage
  • Physical damage insurance and
  • Worker’s compensation insurance if you have several employees.

Also, you must meet all the federal and state insurance filing requirements to comply with all insurance laws. Learn more about this on FMCSA’s detailed summary of insurance filing requirements.

Types of Commercial Tow Truck Insurance

There are several types of commercial towing truck insurance coverage. Here are a few essential coverage options you should include in your tow truck insurance policy to run your towing venture smoothly:

Liability Coverage

Liability coverage includes bodily injury and property damage liability.

Bodily injury liability insurance compensates third-party victims for injuries caused by a tow truck accident involving you or your employees. Property damage liability coverage pays for damage to their property.

Liability insurance is the fundamental coverage required for all tow truck operators nationwide. States often establish minimum coverage amounts for operating in their region; for instance, Texas mandates approximately $500,000 in liability coverage per tow truck per accident.

Physical Damage Coverage

Physical damage coverage also comes in two forms – collision and comprehensive coverage.

Collision coverage pays for the repair or replacement costs of your company’s tow truck if it hits another car or object, such as a pole. It also covers you if your tow truck rolls or overturns.

In contrast, comprehensive coverage protects you from several non-collision incidents, like vandalism, theft, fire, harsh weather, etc.

Medical Payments Coverage

Medical payments insurance pays the medical bills of your covered vehicle’s occupants if they sustain injuries in an incident involving your tow truck. Occupants here could be you or your tow truck drivers and other passengers.

Uninsured/ Under-insured Motorists Coverage

This coverage option covers medical expenses if you or your tow truck drivers get injured in an accident caused by a driver with insufficient liability insurance or one without insurance.

Workers’ Compensation Coverage

Workers’ compensation insurance is critical for tow truck companies with several employees. It compensates employees for any work-related injuries. It also covers legal fees for all employee injury-related lawsuits.

Additional Coverage for Towing and Storage Businesses

The coverage options above may not be adequate for various tow truck business operations. Here are some optional but vital additional coverage for different towing and storage businesses you should consider for maximum financial stability in your specific towing business:

On-Hook Towing Insurance

On-hook towing insurance protects you when towing customers’ vehicles. It covers the repair or replacement cost for a client’s vehicle if it gets damaged in a crash, theft, vandalism, or fire while you’re hauling it. This coverage is helpful if you’re a roadside assistance provider who often tows third-party vehicles.

You may also want to purchase cargo coverage to cover the items inside the vehicles you tow.

Garage Keeper’s Legal Liability Insurance

Garage keepers legal liability insurance is vital for towing service companies that store clients’ vehicles for repair, parking, or other services. It safeguards clients’ vehicles while in your care at a covered location, covering physical damage caused by theft, vandalism, collision, and more.

Consider commercial property insurance to protect your business premises, equipment, and tools.

storage garage

Tow General Liability Insurance

General liability insurance protects you if you’re legally responsible for property damage and personal injury to a customer or third party. The damage or injury may be related to your business, but not your covered vehicles.

Final Thoughts

Insurance requirements differ for tow truck companies based on their specific services. For instance, a roadside assistance provider may need different insurance policies compared to a towing company specializing in repossession or operating a repair facility. This is because each company encounters distinct risks alongside the common risks shared by all trucking companies.

To choose the right coverage, evaluate your business goals and budget, then shop around to identify the best tow truck insurance provider to match your business needs. Ensure you get multiple quotes from various providers and compare them before settling for one.

Here’s an in-depth guide to the best commercial truck insurance brokers. Check it out to understand how to choose an insurance provider. You can also reach out to us for assistance, especially with add-on coverage.


damaged semi truck

Physical Damage Insurance for Semi Trucks

damaged semi truck
Several risks can put your semi-truck out of commission unexpectedly. It could get damaged in a crash, fire, hailstorm, or other natural disasters. Worse still, your semi-truck can get vandalized or stolen.

What do you do if any of these unfortunate events occur and you don’t have cash set aside to repair or replace your truck? How do you get back to business fast? This is where semi-truck physical damage insurance comes into play.

We’ve prepared this quick guide to help you understand everything you should know about physical damage trucking insurance – what is it, and what exactly does it cover? Do you need a physical damage policy?

What Is Physical Damage Insurance?

Physical damage insurance encompasses various types of trucking insurance that safeguard commercial vehicles from a range of risks while on the road. These include:

  • Collision coverage: Covers repair or replacement costs if your commercial truck is damaged in a collision or overturns.
  • Comprehensive coverage: Covers repairs or replacement for non-collision incidents beyond your control, such as theft, vandalism, fire, glass and windshield damage, accidents involving animals, bad weather, or other acts of nature.
  • Fire and theft insurance with CAC (Combined Additional Coverage): A specialized form of comprehensive insurance for heavy vehicles, covering specific non-collision incidents like fire, theft, vandalism, floods, lightning, earthquakes, and other natural disasters, excluding windshield claims.

Most trucking companies rely on physical damage coverage to prevent business interruption and mitigate significant financial losses from unexpected events.

What Physical Damage Insurance Covers

Insurance policies differ per insurer. But nearly all physical damage insurance policies offer the following coverage options:

Roadside Assistance and Towing

Commercial vehicles break down often, and towing your vehicle after an unexpected event can be expensive. With roadside assistance and towing physical damage coverage, your insurance provider will:

  • Cover the expenses for onsite repair work if a covered loss occurs
  • Reimburse the cost of towing your damaged vehicle after an accident

Some of the best physical damage coverage policies provide an extended towing option. They’ll let you get your semi-truck towed to your garage or one that’s close to your trucking company’s main headquarters (instead of the nearest garage) at no additional charge.

Downtime Coverage

Extended truck downtime halts your business operations, resulting in daily financial losses. Downtime coverage provides compensation, typically a set amount per agreed time, until your vehicle is back on the road.

Emergency Expenses

This coverage is beneficial for over-the-road (OTR) truck drivers involved in distant accidents. It covers expenses for their safety post-incident and facilitates their safe return home, including additional lodging, food, and transportation costs.

Loan Gap Coverage

If your truck is declared a total loss because of a serious accident or theft, and you still owe money on the commercial vehicle loan, loan gap coverage steps in. This coverage fills the gap between the actual cash value of your truck at the time of the covered loss and the outstanding loan balance.

For example, if you owe $25,000 on your loan but the current actual cash value of your vehicle is $20,000, your insurer without loan gap coverage would only pay you $20,000 (minus deductible). With loan gap coverage, you’d receive the actual cash value of your truck ($20,000) plus the $5,000 loan gap amount, totaling $25,000 (minus deductible) to help settle the outstanding loan balance.

For more information on gap insurance, check out this detailed guide.

truck rental

Truck Rental Costs

If a truck driver gets into an accident mid-trip, you must find a way to deliver the cargo to its final destination. Truck rental costs help you cover the costs of renting another truck to complete the trip and fulfill your obligation to a client.

Equipment Floater Insurance

Equipment floater insurance protects valuable tools or equipment not permanently attached to a truck, but necessary for specific trucking operations.

Rental Reimbursement

Rental reimbursement covers renting another truck to continue your trucking operations while your covered vehicle is under repair after a covered loss. Most insurance companies provide rental reimbursement for an agreed period – often up to 120 days after a covered loss.

What Physical Damage Won’t Cover – Exceptions and Restrictions

Physical damage insurance won’t cover the following risks:

  • Damage to cargo and personal effects, including a driver’s personal items, electronic equipment, chains, binders, and non-permanently attached equipment.
  • General wear and tear on various vehicle parts
  • Medical expenses
  • Lawsuit fees
  • Damage to other vehicles

Physical damage insurance doesn’t cover non-owned trailer damages, including those used in a trailer interchange agreement.

Who Needs Trucking Physical Damage Insurance?

You will benefit from and should consider purchasing physical damage coverage if you belong to any of the following three categories:

Owner-operators: Owner-operators are responsible for insuring all commercial vehicles against physical damages, even if they operate under a motor carrier’s lease. Usually, leased owner-operators only receive primary liability insurance through their motor carrier.

For-hire motor carriers: Unless exclusively working with owner-operators, trucking companies with a fleet of commercial vehicles need physical damage coverage.

Private carriers: Individuals transporting their own cargo require physical damage insurance to protect their vehicle.

Physical Damage Coverage Deductibles

When buying physical damage truck insurance, you’ll need to choose a deductible, which is the amount you’ll pay out-of-pocket when making an insurance claim. You have different deductible options to consider based on your insurance requirements:

  • Single deductible for accounts with multiple coverage options.
  • Customized aggregate deductible for fleets.

Select your deductible thoughtfully as it impacts your insurance costs. Opting for a higher deductible usually reduces monthly payments, but ensure it’s an amount you can comfortably afford to pay when necessary.

Final Thoughts

While the law doesn’t mandate purchasing physical damage insurance, it’s a crucial coverage policy to ensure the smooth operation of your trucking business.

To find the best physical damage insurance provider, obtain quotes from multiple insurers and compare them. Look for specific features and terms, such as discounts and the availability of a single deductible endorsement at no extra cost.

Assess how well their terms align with your business’s current and future objectives. Check out our detailed guide on commercial truck insurance for further insights into selecting an insurance provider.

Additionally, consider our add-on coverage options for extra protection. If you ever require vehicle financing to recover from an unforeseen setback, don’t hesitate to contact Mission Financial Services. We’re always here to assist you.




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