The Ultimate Guide to Starting a New Truck Authority
Updated: May 3
If you're considering becoming an owner-operator in the trucking industry, it's important to factor in the cost of insurance into your business plan. The cost of insurance for your own authority in trucking can vary depending on several factors, such as the types of coverage you need, the value of your truck, your driving record, and the coverage limits you choose. However, on average, you can expect to pay between $20,00 to $35,000 per year for insurance as an owner-operator. While this may seem like a significant expense, it's a necessary cost for protecting your business and ensuring your financial stability in the event of an accident or injury.
To find the best coverage and rates for your business, it's important to shop around and get quotes from multiple insurance companies, like CarrierHQ. You may also benefit from working with a knowledgeable insurance agent at CarrierHQ, we can help you navigate the complex world of trucking insurance and find the best options for your specific needs.
How to start a new trucking authority?
The trucking industry is a vital part of the global economy, responsible for moving goods and products across the country. However, starting a new trucking company can be a daunting task, especially when it comes to obtaining the necessary authorities and permits. In this blog post, we will discuss the various authorities required to operate a trucking company, as well as the steps involved in obtaining them.
New Authority Checklist
DOT/MC Application Process
The first step in obtaining trucking authority is to file an application with the Federal Motor Carrier Safety Administration (FMCSA). This application, known as the DOT/MC application, is a comprehensive form that requires information about your company, your drivers, your vehicles, and your insurance coverage. The application process can be completed online, and the FMCSA will review the application to ensure that your company meets all the regulatory requirements.
Create FMCSA Account
To complete the DOT/MC application process, you will need to create an account with the FMCSA. This account will allow you to track the status of your application, upload supporting documentation, and communicate with the FMCSA.
Another requirement for obtaining trucking authority is to file a BOC-3 form. This form designates a process agent in each state where you plan to operate. The process agent is responsible for accepting legal documents on behalf of your company. The BOC-3 filing can be completed online through the FMCSA website.
Create IFTA Account
The International Fuel Tax Agreement (IFTA) is a system that allows carriers to report and pay fuel taxes to the states where they operate. To participate in IFTA, you must create an account and submit an application. The application process requires information about your vehicles, including their fuel usage and the states where they operate.
Once you have obtained IFTA registration, you will need to install decals on your vehicles. These decals indicate that your vehicles are registered under IFTA and are authorized to operate in multiple states.
Starting a trucking company can be a complex and challenging process, but with careful planning and research, it can also be a highly rewarding venture. By following these steps and working with experienced professionals, you can start a successful trucking company that meets the needs of your customers and delivers long-term profitability.
How much does it cost to start a trucking company?(equipment, insurance, factoring, telematics)
Starting a trucking company can be an exciting and potentially profitable venture, but it also comes with significant costs. In this blog, we'll break down the expenses involved in starting a trucking company and give you a rough estimate of how much you can expect to spend.
One of the most significant expenses for a trucking company is the cost of equipment. Depending on the type of trucking company you're starting, you'll need to purchase or lease trucks and trailers. A new truck can cost anywhere from $80,000 to $150,000, while a new trailer can cost between $30,000 and $80,000. If you're just starting out, you may want to consider leasing your equipment to save on upfront costs.
Another significant expense for a trucking company is insurance. As a trucking company, you'll need to have liability insurance, cargo insurance, and physical damage insurance. The cost of insurance will depend on several factors, including the type of cargo you'll be hauling, the number of trucks you have, and your driving record. On average, insurance can cost anywhere from $8,000 to $12,000 per truck per year.
Factoring is a process where a company sells its accounts receivable to a third-party company in exchange for cash. Trucking companies often use factoring to improve their cash flow. Factoring companies charge a fee for their services, usually between 1% and 5% of the invoice amount. The cost of factoring will depend on the amount of money you need to factor and the specific terms of the factoring agreement.
Telematics is a technology that allows you to track your trucks in real-time. This technology can help you improve your fleet's efficiency, reduce fuel costs, and improve safety. The cost of telematics will depend on the specific system you choose and the number of trucks you have. On average, you can expect to pay between $15 and $30 per truck per month for telematics.
If you're starting a new trucking company, you'll need to obtain a new authority from the Federal Motor Carrier Safety Administration (FMCSA). The cost of a new authority can vary depending on several factors, including the type of authority you're applying for and the state you're based in. On average, you can expect to pay between $300 and $1,000 for a new authority.
Cost of New Authority
In addition to the cost of obtaining a new authority, there are other expenses you'll need to consider. For example, you'll need to register your trucking company with the state, which can cost between $50 and $500. You'll also need to obtain a USDOT number, which is free, but you'll need to pay an annual fee of $300 to keep it active.
What Does Average Semi Truck Insurance Cost For Owner Operators?
Starting a trucking business is an exciting venture that comes with numerous benefits, including being your own boss, setting your own schedules, and making more money. However, one of the most significant expenses you'll encounter as an owner-operator is insurance. In this blog, we'll discuss how much insurance costs for your own authority in trucking.
Before delving into the specifics, it's important to understand what "own authority" means in the trucking industry. Essentially, it means that you have your own operating authority from the Federal Motor Carrier Safety Administration (FMCSA), which allows you to operate your own commercial trucking business.
When it comes to insurance, there are a few different types of coverage that you'll need to consider. Here are some of the most common:
Primary Liability Insurance - This is the most important type of insurance for trucking businesses. It covers damage to other people's property or bodily injury that you or your driver cause while operating the truck. Primary liability insurance is required by law and typically costs between $10,000 to $15,000 per year.
Physical Damage Insurance - This type of insurance covers damage to your own truck in the event of an accident, theft, or vandalism. The cost of physical damage insurance depends on several factors, including the age and value of your truck, your driving record, and the deductible you choose. On average, you can expect to pay between $3,000 to $10,000 per year.
Cargo Insurance - If you're hauling goods for other companies, you'll need cargo insurance to protect against damage or theft of the cargo. The cost of cargo insurance varies depending on the type of cargo you're hauling and the coverage limits you choose. Typically, you can expect to pay between $1,500 to $3,000 per year.
Bobtail Insurance - Bobtail insurance covers you when you're driving your truck without a trailer attached. This type of insurance is optional but may be required by some motor carriers. The cost of bobtail insurance depends on several factors, including your driving record and the type of truck you're driving. On average, you can expect to pay between $1,000 to $2,000 per year.
The cost of insurance for your own authority can vary widely depending on a number of factors, including:
The type of trucking you do: Insurance companies will take into account the type of cargo you're hauling and the distances you're traveling when calculating your insurance premiums. For example, if you're hauling hazardous materials or driving long distances, you may need to pay more for insurance.
Your driving record: Insurance companies will look at your driving record to assess your risk level. If you have a clean driving record with no accidents or violations, you may be able to get lower insurance rates.
The value of your equipment: The value of your trucks and trailers can also affect your insurance premiums. If you have newer, more expensive equipment, you may need to pay more for insurance.
The amount of coverage you need: The more coverage you need, the higher your insurance premiums will be. It's important to make sure you have enough coverage to protect your business, but you don't want to pay for more coverage than you actually need.
Your location: Insurance rates can vary depending on where your business is located. If you're in an area with higher accident rates or higher crime rates, you may need to pay more for insurance.
The cost of insurance for your own authority in trucking depends on several factors, including the types of coverage you need, the value of your truck, your driving record, and the coverage limits you choose. However, as a general rule, you can expect to pay between $7,500 to $15,000 per year for insurance as an owner-operator. It may seem like a significant expense, but having adequate insurance coverage is essential for protecting your business and ensuring your financial stability in the event of an accident or injury.
Overall, the cost of insurance for your own authority in trucking can range from a few thousand dollars per year to tens of thousands of dollars per year. It's important to shop around and get quotes from multiple insurance companies, like CarrierHQ to find the best coverage and rates for your business. You may also want to consider working with a knowledgeable insurance agent who can help you navigate the complex world of trucking insurance and find the best options for your specific needs.