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  • Madeline Eby

Tips For Lowering Costs While Meeting Commercial Auto Insurance Minimum Requirements

Updated: Mar 14

Running a successful trucking business involves managing several expenses, including fuel, maintenance, and insurance. Commercial trucking insurance can be a significant expense for trucking companies. However, there are ways to save money on insurance premiums while staying compliant with the minimum insurance requirements. In this blog, we'll discuss tips on how to lower commercial insurance costs while staying compliant.

Bundle your insurance

Bundling your insurance policies, such as liability insurance and cargo insurance, with the same insurance company can often result in a discount on your premiums. By combining policies, you not only save money but also streamline your insurance management process.

Implement safety measures

Insurance companies often offer discounts to trucking companies that have a good safety record. Implementing safety measures, such as driver training programs and regular vehicle maintenance, can help lower your insurance premiums. Safe driving habits can also reduce the risk of accidents, which can ultimately lead to lower insurance premiums.

Review your coverage regularly

As your business grows and changes, your insurance needs may change as well. It's important to review your coverage regularly to make sure you have the right coverage at the right price. This will also help you avoid overpaying for coverage you don't need.

Shop around

Don't just go with the first insurance company you find. Take the time to compare quotes from multiple insurance companies to find the best deal. Insurance companies have different rates and offer different types of coverage. By shopping around, you can find the best deal that meets your business's needs. At CarrierHQ we offer a multi-quote experience. Get multiple quotes tailored to your fleet and get the best rates!

Choose a reliable and experienced insurance provider

It's essential to choose an insurance provider who understands your business's unique needs and has experience in the commercial trucking industry. An experienced provider can help you navigate the complicated world of insurance and provide you with customized insurance policies that fit your needs.

Maintain a good credit score

Your credit score can impact your insurance premiums. Insurance companies may offer lower premiums to trucking companies with good credit scores. To maintain a good credit score, pay your bills on time, keep your credit utilization ratio low, and monitor your credit report regularly.

In addition to the tips mentioned above, there are a few other ways to save money on commercial trucking insurance premiums.

Increase your deductible

One way to lower your insurance premiums is to increase your deductible. The deductible is the amount you pay out of pocket before your insurance coverage kicks in. By choosing a higher deductible, you are taking on more risk, which insurance companies often reward with lower premiums.

Invest in technology

Investing in technology such as telematics and GPS tracking can help lower your insurance premiums. Telematics can monitor driver behavior, such as speed and hard braking, and provide insights into how to improve safety. GPS tracking can help recover stolen vehicles, which can save insurance companies money in the long run. By investing in these technologies, you can demonstrate to insurance companies that you take safety seriously, which can result in lower premiums.

In addition to these tips, it's important to stay up-to-date on changes in the insurance industry and in regulations that may affect your insurance needs. For example, recent changes in California law require trucking companies to provide their drivers with workers' compensation insurance, which may impact your insurance costs. By staying informed and working with an experienced insurance provider, you can ensure that your business is properly protected and that you are not overpaying for insurance coverage you don't need.

FMCA Requirements

The Federal Motor Carrier Safety Administration (FMCSA) requires all interstate motor carriers to carry a minimum level of insurance coverage. The amount of insurance required varies depending on the type of cargo being transported and the size and weight of the vehicles used. For most general freight carriers, the minimum insurance requirements are $750,000 for bodily injury and property damage liability, while hazardous material carriers are required to carry at least $5 million in coverage.

One important insurance 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.

Final thoughts

In conclusion, managing insurance costs is a crucial part of running a successful trucking business. By implementing safety measures, regularly reviewing your coverage, bundling policies, shopping around, choosing a reliable insurance provider, maintaining a good credit score, increasing your deductible, and investing in technology, you can lower your insurance premiums while staying compliant with FMCA requirements. It's important to work with an experienced insurance provider who understands the unique needs of your business and to stay up-to-date on changes in the industry and regulations. By taking these steps, you can ensure that your business is properly protected and that you're not overpaying for insurance coverage you don't need.

If you're looking for a trusted partner to help you with your commercial trucking insurance needs, consider reaching out to CarrierHQ. Our experienced client success team members can help you find the best coverage for your business's unique needs.

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