- CarrierHQ
COMMERCIAL TRUCK INSURANCE REQUIREMENTS
Updated: Jan 31
There are three things to consider when looking into commercial truck insurance and at times the information can be daunting and repetitive.
The first thing is to check the commercial truck insurance requirements by state. Checking on the requirements of insurance for your state in particular so you can be sure you’re in compliance with the law. Secondly, the Federal Motor Carrier Safety Administration (FMCSA) is a government agency that oversees and regulates the trucking industry. One of the requirements for operating a commercial trucking business is obtaining the proper insurance coverage. And lastly, the amount of misinformation online can make it confusing what is required for commercial truck insurance. Just like in a previous blog post we've included a few key myths in the truck insurance world in this article to help you feel better prepared while on the road!
Commercial Truck Insurance Requirements by State
CarrierHQ would like to present a list of minimum insurance requirements by state:
$25,000 for bodily injury per person
$50,000 for total bodily injury per accident
$25,000 for property damage
California:
$15,000 for bodily injury per person,
$30,000 for total bodily injury per accident
$5,000 for property damage
Illinois:
$30,000 for bodily injury or death per person
$60,000 for total bodily injury or death per accident
$15,000 for property damage
$25,000 for bodily injury or death per person
$50,000 for total bodily injury or death per accident
$10,000 for property damage
Massachusetts:
$20,000 for bodily injury or death per person,
$40,000 for total bodily injury or death per accident
$5,000 for property damage
$20,000 for bodily injury or death per person
$40,000 for total bodily injury or death per accident
$10,000 for property damage
Pennsylvania:
$15,000 for bodily injury or death per person
$30,000 for total bodily injury or death per accident
Tennessee:
$25,000 for bodily injury or death per person
$50,000 for total bodily injury or death per accident
$30,000 for bodily injury or death per person,
$60,000 for total bodily injury or death per accident
$25,000 for property damage
FMCA Requirements
As stated previously, secondly is the coverage required by the FMCSA is commercial auto liability insurance. This insurance covers accidents where the driver or the motor carrier is found to be at fault and results in damage to another person or their property. The amount of liability insurance a motor carrier needs is determined by the type of goods they haul.
Cargo insurance is another important coverage; motor carriers who haul household goods, such as moving companies, are required to purchase cargo insurance at a minimum of $5,000 per vehicle and $10,000 per occurrence. Although cargo insurance is not required for carriers of other types of goods, it is highly recommended as most shippers and brokers will not do business with a motor carrier who does not have cargo insurance. Physical damage insurance and general liability insurance are not required to obtain motor carrier authority but are often strongly recommended.
Other common supplementary coverages include the following:
Physical damage - covering truck or trailer damages from things like vandalism, collision, natural disasters, and theft
Bobtail aka non-trucking liability - coverage for driving the truck for personal reasons or is off dispatch
Trailer Interchange -physical damage coverage for trailers being pulled under a trailer interchange agreement. Basically this is physical damage insurance for non-owned trailers
Uninsured/underinsured motorists (UM/UIM) - protection if another person hits you and doesn't have liability insurance)
Reefer breakdown coverage - coverage for refrigerated trucks for things like:
refrigeration breakdown
lost cargo
damage to products due to a collision
Commercial Truck Insurance Myths
A few key myths in the truck insurance world to help you feel better prepared while on the road!
Myth #1: All employees are always covered when they drive my business’s insured vehicle.
Explanation #1: To ensure that all of your employees are covered while driving your company's insured vehicle, your insurance policy must include "permissive use." This means that drivers are covered as long as they have been given permission to operate the vehicle. However, not all insurance providers offer this option, and some may only provide coverage to drivers who are specifically named on the policy.
Insurance Myth #2: Seasonal businesses should cancel their insurance policy during the off-season.
Explanation #1: Canceling your insurance policy during the off-season can have significant drawbacks. For example, your trucks may not be covered in the event of vandalism, fire, theft, and so on. Therefore, it is not recommended to cancel your insurance policy when your vehicles aren’t in use. An alternative is to switch to a comprehensive-only policy for the duration of your business’s downtime. This will provide coverage for situations like fire and theft, but won't include unnecessary liability coverage that would only be needed if your vehicles were being driven.
Insurance Myth #3: Insurance premiums are set in stone and it is impossible to lower them.
Explanation: To ensure that all of your employees are covered while driving your company's insured vehicle, you should choose a policy that includes "Permissive Use" endorsement. This ensures that all of your drivers are covered under the commercial truck insurance plan as long as they have your permission to drive and hold the proper credentials, such as a CDL if needed.
Insurance Myth #4: I need a separate cargo insurance policy.
Explanation: A cargo endorsement can be a less expensive alternative to carrying a separate policy for cargo insurance. If you are involved in an accident that damages both your truck and cargo, you'll only need to file your claim to one company rather than two separate insurance companies. This can save you money and make the claims process less complicated.
Insurance Myth 5: Price is the most crucial factor when choosing commercial trucking insurance.
Explanation: It is a common misconception that the cheapest commercial trucking insurance policy is the best option. However, it is important to note that not all policies are created equal and price should not be the only factor in making a decision.
There are a lot of options to consider, it can be overwhelming. Our team can help you find the right coverage to maximize the value of your policy. CarrierHQ helps you establish these requirements through the online portal, so you can be sure you’re in compliance with the law. And we can get you set up with coverage in as little as 24-48hrs hours. Contact us today for a free quote!