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.
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!