Cost of Commercial Truck Insurance
Commercial auto insurance protects vehicles that are owned by a company. The cost of the insurance is based on several factors including the quantity of vehicles, their worth, and the purpose for which they are used for business purposes.
In the United States, there are approximately 500,000 trucking accidents that occur annually. If you are a truck driver or have employees who drive trucks, it is important to have the appropriate insurance to safeguard everyone involved.
But, where can one obtain commercial truck insurance and what is the cost associated with it? This article aims to provide answers to these questions.
How much is insurance for a trucking company?
If you are thinking about starting a trucking company, you will need to get commercial truck insurance. The cost of insurance for a trucking company varies depending on a number of factors, such as the type of trucks that you have, fleet size, company size and multiple more. Keep reading to learn more about how much commercial truck insurance and cargo insurance will cost for your trucking company.
What is a Commercial Carrier Policy?
A Commercial Carrier Policy, also referred to as a motor carrier policy, is a specialized insurance policy for the trucking industry. If your trucking business transports any type of goods, from cargo to livestock, then a Commercial Carrier Policy is required. This policy covers various areas, including auto liability, physical damage, trailer interchange, and more.
It replaces the traditional truckers' policy, to adapt to the changing demands of the industry, and is suitable for all types of motor carriers, including for-hire, private, or combined.
To have auto liability insurance, it will protect the company in the event that one of its drivers causes an accident. Cargo insurance will protect the company's cargo in the event that it is lost, damaged, or stolen.
What is the average cost of commercial truck insurance?
The price of commercial truck insurance can vary based on individual needs. Owner-operators with a motor carrier lease can anticipate paying between $3,000 to $5,000 per year, whereas those with their own authority could expect to pay anywhere from $9,000 to $12,000 per truck annually. To get the most affordable commercial truck insurance, consider comparing quotes from multiple insurance providers.
How much does motor carrier insurance cost?
Motor carrier insurance is one of the most significant expenses for a motor carrier business. A new authority can expect to pay around $12,000 per year for a liability policy worth $1,000,000 and a $100,000 cargo policy.
What kind of insurance do I need for a trucking business?
It is important to determine your specific needs as this type of insurance is just the basic coverage.
Your trucking business may require different types of commercial insurance before starting operations, including primary auto liability, general liability, physical damage, bobtail, motor truck cargo, rental reimbursement, trailer interchange, medical payment, and uninsured/underinsured motorists.
What amount of cargo insurance do I need?
The amount of cargo insurance you need will depend on the nature of the cargo you are transporting. You will require a minimum of $750,000 to $5 million for bodily injury and property damage liability, as well as a minimum of $5,000 per vehicle and $10,000 per incident for cargo liability. The type of cargo will determine the specific minimum amounts required.
Factors that affect the cost of insurance for a trucking company
Several factors can impact the cost of insurance for a trucking company include:
The larger the fleet, the higher the premium as it increases the insurance company’s risk.
Type of Cargo
The type of cargo being transported can affect the cost of insurance, with hazardous materials typically costing more to insure.
Driver experience and/or Driving History
Experienced drivers with a clean driving record can lower insurance costs to inexperienced drivers or those with a history of accidents.
The higher the cover limits, the higher the premium.
Insurance costs can vary by region and state, with higher costs in areas with higher rates or higher medical costs.
The amount of deductible you choose will impact your insurance costs, with a higher deductible lowering the premium but increasing your out-of-pocket expenses in the event of a claim.
Routes that you plan to run
These are some of the main factors that can impact the cost of insurance for a trucking company, and it is recommended to always consider each and every factor when purchasing insurance.
We given you a lot of information to think about but it never hurts to learn to know a base price based off of your fleets needs. It's always encourage for a company to do their own research on commercial auto insurance than to skip this step in the process.
If you have any questions about the coverages offered by CarrierHQ reach out to our Client Success team; (866)621-4145. We are always happy to answer your questions and help you make the right choice for your future.
Now that we've covered the average cost of insurance and factors that can influence that cost, let's dive more into the specifics of a million-dollar insurance policy.
How much is a million-dollar commercial insurance policy?
The cost of a million-dollar commercial truck insurance policy can vary depending on a number of factors, such as the type of truck, the driver's experience, accident history, and the coverage options selected. It can also depend on the location and the insurance company providing the policy.
What Does It Mean To Have $1 Million in Liability Insurance?
Having $1 million in liability insurance means that your insurance coverage will provide financial protection for up to $1 million in damages in the event of a covered loss. Any additional expenses exceeding this amount will be the responsibility of the policyholder to cover.
The average cost of trucking insurance
The cost of truck insurance can vary significantly depending on the insurance provider and the type of coverage selected. For example, general liability insurance typically ranges from $750 to $7,000 per year, with a coverage limit of around $1 million. Liability insurance specific to trucking, known as trucking liability insurance, can cost anywhere from $2,500 to $4,000 per trucker and covers a minimum of $750,000 per driver. Bobtail insurance, which covers a truck when it is not hauling cargo, typically has an annual premium of around $450 with a coverage limit of $1 million. Lastly, physical damage insurance, which covers the cost of damage to the truck, does not have a set minimum coverage and the premium rate is based on a percentage of the truck's value.
What factors affect the rate of commercial auto insurance?
Similar to personal auto insurance, the insurance company calculates the premium for commercial vehicle insurance based on various factors, including the type of commercial vehicles owned, the number of vehicles, the frequency of use, and the driving records of the business owner and employees. Additionally, the premium is also influenced by the coverage options chosen, industry risks, and policy limits. It is recommended to speak with a licensed insurance agent over at CarrierHQ to determine the best coverage options.
The type of coverage chosen
The type of auto coverage selected also plays a major role in determining the cost of commercial auto insurance. For example, liability coverage is required by law in most states and provides minimal protection in the event of an accident caused by the business or its employees. This is the most cost-effective option, but it only covers physical damage to other vehicles or property damage and medical expenses from bodily injury to another party. Comprehensive coverage, on the other hand, includes protection against theft, and damage from weather, vandalism, or fire, in addition to liability coverage, but it comes at a higher cost. Additional coverage options such as roadside assistance, rental reimbursement, or collision coverage can also increase the premium.
The industry in which the business operates and the way the vehicles are used for business purposes can also affect the cost of commercial auto insurance. For example, a food truck that is frequently on the road may have higher rates than a stationary business. Similarly, construction vehicles that operate in dangerous job sites may also be subject to higher rates.
The coverage limits selected also impact the cost of commercial auto insurance. Higher limits provide broader protection but also come at a higher cost.
Without specific information on the truck and the coverage options, it is difficult to provide an accurate estimate of the cost of a million-dollar commercial truck insurance policy. It's advisable to speak with a commercial truck insurance agent, like us at CarrierHQ, to get a quote for your specific truck and coverage needs.
Coverages at CarrierHQ
Over at CarrierHQ here are coverages we offer. Get a quote today or reach out to a CarrierHQ representative with any questions you may have!
Hired Auto Liability
Uninsured/Underinsured Motorist Coverage
Property Damage & Bodily Injury Liability Coverage
Since insurance can really vary based on different factors, how can you lower these payments or get a low or no down payment? Let's explore this question in the section below.
How to get a low or no down payment on insurance?
Finding and purchasing insurance can be tedious and taunting for anybody who isn’t sure where to start. This is especially true if you aren’t sure how to get the best deals or know what you can afford. It can be a stressful task to look ahead and try to figure out how to make your payments lower or even non-existent within your financials. In this blog post, we’ll discuss different methods, tips, and tricks that you can use to get the most affordable rate in commercial trucking insurance to help you purchase an insurance policy. Another thing we want you to think about it how raising your deductible my help reduce your premiums, other strategies you can use to help make you’re getting the best deal possible on your insurance coverage.
What is the difference between no and low down payments?
No down payment insurance is insurance that does not require the policyholder to pay any upfront costs. Low down payment insurance is insurance that requires the policyholder to pay only a small amount of upfront costs. The main difference between the two is the amount of money that the policyholder must pay upfront. No down payment insurance policies will typically have higher monthly premiums than low down payment insurance policies.
How to get a low-down payment?
Although it can be tricky, when it comes to insurance there are a few ways to get a low-down payment on insurance.
Comparing rates from different commercial insurance companies can help you find the best deal.
Some companies offer discounts for bundling multiple policies, such as
combing commercial auto insurance with other types of insurance your business may need, for example general liability or workers compensation.
Increasing Your Deductible
Increasing your deductible (amount you pay out of pocket) can lower your
monthly or annual premium, but it also means you’ll have to pay more in case of an accident.
Good Credit Score
A good credit score can make your eligible for lower down payments or better interest rates on your insurance policy.
Safety and Loss Prevention Programs
Some insurance companies may offer discounts for implementing safety and loss
prevention programs. What is a safety and loss prevention program? A
safety and loss prevention program is a program designed to reduce the risk of accidents, injuries, and property damage in the workplace.
Special programs to be for new authorities, family-owned companies, smaller fleet sizes, etc.
Negotiate – Not many insurance companies are up
for a negotiation, but some may be willing to negotiate down payments and other terms of the policy.
Pros and Cons
The pros and cons of a low or no down payment on insurance.
Lower month premiums
Lower up-front costs
More affordable for people with limited budgets
More flexibility when it comes to making payments
Higher long-term costs
May not be eligible for certain discounts
May be subject to a higher interest rate
May not be able to cancel the policy during the term
In the end, getting a low or no down payment on insurance be beneficial for those on a budget or anybody that needs coverage quickly. The most important this is to shop around and compare policies to make sure you are getting the best coverage for the lowest price. Lastly, it’s important to consider any additional fees and charges associated with the policy to ensure you are not overpaying for coverage.
The cost of commercial truck insurance varies based on several factors, such as fleet size, type of cargo, driver experience, coverage limits, and location. A Commercial Carrier Policy, also known as a motor carrier policy, is a specialized insurance policy that covers various areas such as auto liability, physical damage, and trailer interchange. The average cost of commercial truck insurance can range from $3,000 to $12,000 per truck per year depending on individual needs and requirements. A million-dollar commercial truck insurance policy can cost anywhere between $9,000 and $12,000 per year. When all is said and down, it's best to speak to your local agent, like CarrierHQ to decide which policy or policies are best for your business.