Semi Truck Insurance: Providers, Coverage & Costs

Semi truck insurance, also called owner-operator or commercial truck insurance, is a blanket term for a collection of policies for truck drivers. Many of these policies cover truckers’ legal liabilities in different situations like hauling cargo or nonbusiness driving. Owner-operators can expect to pay between $8,000 to $12,500 per year for truck insurance.

Whatever commercial truck insurance policies you need, you want to work with a company that understands your risks and the regulations in your industry. As a top insurer, Progressive Commercial can help you find an affordable policy that fits your specific needs. Visit its website to get a quote and receive proof of insurance within minutes of completing a policy application.

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Semi Truck Insurance Costs

Commercial truck insurance average costs vary widely because there are several different coverages truckers may need. Truck drivers’ insurance costs can also vary due to ownership status. For leased owner-operators, annual semi truck insurance costs from $1,500 to $2,000. Owner-operators with authority pay between $8,000 to $12,500 each year in cumulative insurance premiums.

Semi Truck Insurance Costs by Insurance Type

Factors That Impact Semi Truck Insurance Costs

Semi truck insurance costs can vary widely because insurers evaluate many factors when they determine premiums. As with all small business insurance, how much your truck insurance costs depends on how your insurer weighs these factors:

• Ownership status: If you’re an owner-operator on a permanent lease, the motor carrier generally covers your public liability, which greatly reduces your overall insurance costs. However, owner-operators with their own authority pay for their general liability.
• Cargo type: Risks, and therefore premiums, typically are much lower if you’re hauling hay compared to hauling a hazardous material like fuel.
• Weight of freight: Heavier loads usually translate into higher premiums.
• Driving distance: The farther you travel, the greater the risk of an accident, and that impacts your premium.
• Truck value: Physical damage premiums are a percentage of the truck’s value, so more valuable trucks cost more to insure.
• Type of physical damage coverage: Insuring for your truck’s actual cash value results in a higher premium, but the stated coverage amount is based upon your estimated value. This option typically costs less.
• Credit history: Insurers check credit scores and history to help determine if you’re a good risk. They see a poor credit report as an indication that you may cost them money, and they adjust your premium accordingly.
• Loss history: Insurance companies often decrease premiums for truckers who file few claims.
• CDL experience: The more experience you acquire after obtaining your commercial driver’s license (CDL), the less risk you present to an insurance company. This is typically reflected in low premiums.
• Deductible amount: Higher deductibles mean lower premiums. If you can afford to pay more out of pocket on a claim, then you might want to raise your deductible.
• Coverage limits: Policy limits are the amount the insurer pays for claims. Opting for high limits translates into higher premiums because the insurance company wants to cover the potential cost to them.

Types of Semi Truck Insurance

Truck drivers need several types of commercial truck insurance coverages. However, the coverage you need depends primarily on your owner-operator status. There are two types of statuses: owner-operators under lease to a motor carrier and owner-operators working under their own authority. An owner-operator under a permanent lease with a motor carrier usually has some insurance needs covered by the motor carrier.

Most Common Types of Truck Insurance

General Liability Insurance

Also called public liability insurance in the trucking industry, general liability insurance covers third-party bodily injuries and property damage not related to truck driving. For example, general liability covers injuries a client sustains if he slips in your garage but not those sustained if you hit him with your rig.

Owner-operators with authority, freight forwarders, and motor carriers are required by law to carry public liability insurance. However, the coverage is a good idea for any business owner because it pays for several common business risks. Drivers under lease don’t usually need general liability insurance as most are covered by the motor carrier’s policy.

Trucking Liability Insurance

Trucking liability insurance, also known as primary liability, pays for injuries and property damage you may cause others while operating your truck. The Federal Motor Carrier Safety Administration (FMCSA) requires a minimum liability limit of $750,000 combined single limit (CSL) or $1 million for truckers who need a federal filing.

Trucking liability policies usually require every truck to be scheduled or listed on the policy. Insurance companies won’t pay claims if the truck isn’t scheduled.

Nontrucking Liability Insurance

Nontrucking liability insurance covers damages and injuries to third parties that occur when you’re driving your truck for nonbusiness purposes like running personal errands. If you have a truck accident when you’re not working, nontrucking liability pays for the other person’s medical bills and property repairs.

This coverage is primarily for drivers under a lease with a motor carrier. Even though they typically are covered by their motor carrier’s general liability insurance, that policy is only for business activities like hauling cargo, deadheading, or traveling for maintenance. Drivers still need nontrucking liability insurance to cover nonbusiness driving.

Bobtail Insurance

Bobtail insurance is liability insurance that covers you and your semi truck when you’re driving for business but not hauling a load, like when you’re traveling between jobs. The policy pays your legal bills if someone sues after an accident. Motor carriers often require leased drivers to carry bobtail insurance.

Some examples of accidents that trigger bobtail insurance include those that occur:

• On the way to pick up your first load
• After you drop off a load and are on your way to pick up the next
• On your way home after a delivery

Bobtail insurance is often confused with nontrucking liability coverage. Both cover gaps in the liability insurance commonly provided by motor carriers. However, bobtail insurance covers business-related driving, whereas nontrucking insurance is for personal driving.

Physical Damage Insurance

Physical damage insurance pays for damages and repairs to your truck caused by certain covered perils, including accidents, natural disasters, theft, and vandalism. It’s not legally required, but it’s recommended for all drivers. Plus, most lenders require physical damage insurance for financing.

Physical damage insurance comes in two parts:

1. Collision: Pays for damage to your rig when it collides with another vehicle.
2. Comprehensive: Pays for damage caused by most other perils, including theft, hail, vandalism, and fire.

All owner-operators need physical damage insurance to protect their investment in their trucks, and this includes drivers under a lease. Most motor carriers’ liability insurance extends to drivers, but that doesn’t cover physical damage to the driver’s truck.

Motor Truck Cargo Insurance

Motor truck cargo insurance covers your responsibility for the cargo you carry, typically paying out when it’s lost or damaged. The coverage isn’t a legal requirement, but it’s recommended for all owner-operators and for-hire motor carriers.

Common triggers for motor truck cargo insurance include:

• Fire
• Collision
• Theft
• Water damage
• Equipment breakdown
• Striking of a load

Workers’ Compensation Insurance

Workers’ compensation insurance is a state-mandated coverage that pays employees’ medical costs and lost wages if there are work-related illnesses or injuries. Typically, only motor carriers and owner-operators with employees have to get workers’ compensation, but some states may require coverage for business owners in high-risk industries.

Depending on state law, injuries covered by workers’ compensation typically include:

• Traumatic injuries after a truck accident
• Repetitive stress injuries from loading and unloading cargo
• Work-related illnesses from exposure to harmful chemicals

Deciding which policies you need mainly depends on your status as an owner-operator. Owner-operators working under their own authority generally need all of these semi truck insurance policies. Truck drivers working under a lease need to look at their contracts to determine what coverage they need.

Additional Semi Truck Insurance Coverages

In addition to the primary policies for owner-operator truck drivers, there are several supplemental coverages you may want to add to your policy depending on your specific circumstances. Some of these coverages can be added to your primary policies through riders while others may need to be purchased separately.

Trailer Interchange Endorsement

Trailer interchange insurance pays for physical damage you cause to another person’s trailer. It’s important for truckers and motor carriers that regularly enter trailer interchange agreements. This endorsement is usually added to a liability policy to cover damage caused by fire, theft, explosion, collision, or vandalism.

Hazmat Truck Insurance

Hazardous materials or hazmat truck insurance isn’t always a separate policy or endorsement, but it’s worth noting that hauling hazardous materials is regulated strictly. Federal law increases the mandatory minimum liability coverage to $1 million for any trucker hauling hazardous materials like fuels, chemicals, or fertilizers.

Livestock Cargo Insurance

Hauling live animals creates a unique set of risks, including the possibility that your cargo suffers an injury, escapes confinement, or dies en route. These risks are typically excluded from standard truck insurance policies and make a specific livestock cargo policy necessary for drivers who transport animals. Policies typically pay for dead and injured livestock as well as carcass removal.

Trucking Umbrella Insurance

The amount of damage a semi truck can cause means claims often exceed your truck liability limits, and this makes trucking umbrella insurance a valuable coverage. Like other commercial umbrella policies, this policy extends the limits of underlying liability policies. If a claim costs more than what your other insurance covers, umbrella liability pays the rest.

Uninsured & Underinsured Coverage

Uninsured and underinsured motorist insurance covers your costs after an accident with another driver who’s either uninsured or whose limits aren’t high enough to cover your damages. It’s also the least expensive coverage but well worth the cost if you end up needing it.

Commercial Truck Insurance Requirements

Source: FMCSA

Insurance Filing Requirements

Truckers applying for certain authorities, namely motor carriers, brokerages, and freight forwarders, must demonstrate they have the appropriate insurance by filing with the FMCSA. Federal filings are often required for interstate trucking, hauling hazardous materials, for-hire trucking, and for-hire people transport.

In addition to federal filings, truckers may also have state-specific commercial truck insurance requirements. For instance, Alabama, Arkansas, Louisiana, Mississippi, and Pennsylvania require certificates of insurance (COIs) when you drive an overweight vehicle, carry an overweight load, or own an oversized truck or trailer.

Commercial truck insurance requirements are difficult to navigate, so it makes sense to work with a carrier like Progressive Commercial that can help you with federal and state filings.

Bottom Line

Getting the best semi truck insurance for your business requires focusing on value, not price. The cheapest policies aren’t often the best. Also, insurance coverage that’s too low can hurt your business if you’re driving under your own authority because it can prevent you from getting jobs with freight brokers. Owner-operators who want the appropriate coverage should work with an agent that has experience in truck insurance.

For more guidance on finding the right semi truck insurance, contact the experts at Progressive Commercial. Its team takes the time necessary to analyze your business needs and make sure you find an affordable coverage option. It even offers discounts so you can save money without sacrificing value and provides proof of insurance within minutes of completing a policy application. Visit its website to get a free, no-obligation quote in just a few seconds.

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