The cost of commercial truck insurance can vary widely depending on many factors. These factors include the type of trucks, their usage, the driving records of the drivers, the geographic location of the business, the amount of coverage needed, and the deductible chosen.
Generally, commercial truck insurance can range from several thousand to tens of thousands of dollars annually per vehicle.
In this article, we discuss how much you’re likely to pay for different types of commercial truck insurance. We also offer tips for keeping your insurance costs low without compromising coverage quality.
What is the Cost Of Different Types of Commercial Insurance Coverage?
There are several major types of commercial truck insurance coverage. Some are required by law, and you cannot run your trucking company without them. Other types are not legally required but are essential to protect your trucking business from losses due to legal claims in the event of an accident.
Here is a summary of the insurance costs for different types of Insurance coverage:
Primary Liability Coverage
Primary liability is the minimum liability coverage all trucking business owners, including autonomous commercial truck drivers, must have. Costs range from $5,000 to $7,000 (about $500 average monthly) for owner-operators with their authority.
If you’re an owner-operator working with a motor carrier, the law requires your motor carrier to cover these costs.
Usually, primary liability includes bodily injury and property damage liability as one. This way, it covers the medical expenses of victims injured in an accident caused by your semi-truck and offers compensation for any physical damages.
Physical Damage Coverage
You’ll pay between $1,000 and $3,000 (or $100 to $300 monthly) on average for physical damage insurance. These costs vary significantly because physical damage insurance payments are often calculated as a percentage of the truck’s total value.
All the same, this is essential coverage because of its comprehensive nature. It protects your semi-truck from damages as a result of collisions, vandalism, theft, and even harsh weather conditions.
General Liability Coverage
General liability insurance is not as costly as primary liability insurance, yet it can help your commercial trucking business save money. You’ll pay approximately $500 – $600 minimum per year, although this cost can be much higher.
General liability insurance covers you for more than accidents involving your trucks. It covers you for any damages or injuries related to your trucking business. Say a customer falls and gets injured on your business premises. You won’t have to pay their medical bills out-of-pocket if your commercial truck insurance policy covers general liability.
Non-trucking Liability Coverage
Non-trucking liability protects you when using your semi-truck for purposes other than work. It costs about $400 annually on the lower end but might be as much as $1644.
Bobtail Insurance
Bobtail insurance covers owner-operators who sometimes drive their semi-truck without its trailer in tow. It’s a requirement by most motor carriers. It might be necessary for for-hire truckers operating on a lease with a motor carrier. This insurance costs between $300 and $400 annually.
Motor Truck Cargo Insurance
Cargo insurance costs vary according to the type of cargo you haul. The standard cargo coverage limit is about $100,000. Still, some shipping companies require owner-operators to get up to $1M in coverage.
For $1M cargo coverage, you might pay as little as $400 per year or as much as $1,800.
Umbrella Insurance
Umbrella insurance for semi trucks acts as an extra layer of protection in case you are involved in a severe accident or lawsuit.
The average cost for this type of insurance is $5000 to $7000 per year. But the cost of umbrella insurance for semi trucks can vary widely depending on several factors including risk factors such as the routes you drive and your driving history.
Other Factors Affecting Semi-truck Insurance Costs
Understanding the factors that influence the cost of commercial truck insurance gives you insight into what insurance providers consider when setting their rates. Here are some critical factors that determine your semi-truck insurance cost.
Federal & State Regulations
The Federal Motor Carrier Safety Administration (FMCSA) sets regulations all truckers must comply with to operate. At the same time, states set their minimum coverage limits for commercial truck insurance.
These regulations guide how insurance providers create their trucking insurance policies and premiums.
For instance, an owner-operator in Nebraska pays higher semi-truck insurance costs than one in New Jersey because the two states have different minimum coverage limits.
Vehicle Specifications
Your vehicle specifications and overall condition, including the vehicle type and truck’s weight, determine your cost of commercial insurance. You’ll pay more to insure heavy trucks. The size and value of your fleet also matter. You might pay less if you insure your entire fleet as a bundle.
Type of Goods Hauled
Trucking insurance for hauling hazardous materials costs more than similar insurance for transporting non-hazardous goods.
Radius of Operation
If trucks travel longer distances or cover more miles, your insurance costs will be higher. This is because the chances of an accident increase the longer the truck is on the road.
Experience of Truck Drivers
You pay less for commercial insurance if you work with experienced truck drivers with clean driving records.
Credit History
A good credit history helps you qualify for affordable commercial truck insurance rates.
Coverage Limits & Deductibles
When a claim is made (deductible), the out-of-pocket amount affects your truck insurance costs. When choosing a high deductible and low coverage limit, you pay less for commercial truck insurance.
Tips for Reducing Insurance Costs and Keeping Them Low
- Maintain a clean driving record.
- Monitor your credit reports to ensure you maintain a good credit history.
- Reduce the distance covered by avoiding unnecessary trips and finding efficient routes for making the necessary trips.
- Consider getting a bundle commercial insurance package, where you combine all your liabilities and get one heavy trucking insurance package to cover them all.
- Ask for discounts, especially when insuring an entire fleet.
- Consider getting usage-based insurance. It’s cheaper. Check out our guide on usage-based insurance to learn more about this.
Conclusion
Remember, commercial auto insurance is not the same as commercial truck insurance. Auto insurance includes other types of commercial vehicles like buses, whereas truck insurance is specific for commercial trucks.
You must get the right insurance for your trucking company. Operating without proper insurance can lead to severe penalties, fines, and even the suspension of your business operations.
You may want to consider getting help from a licensed insurance agent to find the best commercial insurance to cover your specific business adequately.
If you have any questions on commercial trucking insurance, give Mission Financial Services a call. We are always ready to help!
