When you own a semi-truck, are a semi-truck driver, or own a trucking company, you must purchase insurance for your truck; that way, the driver and your truck are covered if anything happens to either of them. After all, accidents happen, and the driver can get injured, or the truck can get damaged.
On average, trucking insurance can cost anywhere from $9000 to $15,000 a year, though it can go as high as $30,000. The average is $2000 to $4000 for owners and operators that lease their vehicles. When an owner or operator leases a truck, they pretty much rent a truck for a certain amount of time. Owners and operators with carrier authority can spend anywhere from $9,000 to $12,000 per truck. An owner with carrier authority means that they have the government’s permission to get paid to transport freight. Lastly, new authorities can expect to pay anywhere from $12,000 to $16,000 per year. So, how much you spend per year depends on what type of authority or lease you have.
Trucking Insurance Categories
The category of insurance you choose will determine the average cost you have to pay. If you need help finding insurance, you can learn more here.
Primary Liability
Primary liability covers the insured driver when an accident involves bodily injuries to the driver or causes property damage to someone else. For example, if the driver gets in a car accident and breaks their leg, the insurance would cover the medical expenses from the accident. If the driver rear-ends another car, the insurance will cover the damages. Primary liability insurance will cost you anywhere from $5,000 to $7,000 a year.
General Liability
General liability will cover customer bodily injuries and customer property damage that does not directly involve the truck. For example, suppose a customer slips and falls. In that case, general liability will cover medical expenses, attorney fees, court-ordered judgments, and funeral expenses if the injury was fatal. This insurance does not cover employee injury; to cover employee injuries, you must get workers’ compensation insurance. General liability insurance is less expensive than primary liability ranging from $500 to $600 a year.
Umbrella Policy
An umbrella policy, also known as excess liability insurance, covers lawsuits when the primary liability insurance gets depleted. For example, if your primary liability insurance is set to $1 million and your company gets sued in excess of $1.5 million, excess liability insurance will give you the extra coverage to cover the remaining amount. This insurance coverage will provide you with additional protection if your business is the target of a lawsuit. Choosing an umbrella policy will cost you anywhere from $500 to $700 a year.
Physical Damage
Physical damage insurance will cover costs for damages that occur to your truck. For example, if you accidentally drive into a brick wall and damage the front end of your truck, your insurance will cover the repairs needed for the damages. This insurance will also cover damage to the truck caused by natural disasters, extreme weather events, fire, theft, and vandalism. Physical damage insurance will cost $1000 to $3000 a year. If you are the owner and operator, this may be a category you need to add to protect your assets.
Non-trucking Liability Insurance
Non-trucking liability insurance covers the truck when the driver is not transporting cargo and is using the truck on their personal time. For example, if the driver gets into an accident when they are off-duty and not hauling cargo, the truck will still be covered when you have this insurance. When the driver uses the truck on their own personal time, the truck will not be covered under the primary liability insurance. Therefore, it is essential to have this coverage on your trucks. If you choose to get non-trucking liability insurance, it will cost anywhere from $350 to $400 a year.
Uninsured/Under-Insured Motorist
Uninsured motorist coverage covers your expense and damages in the event of an accident where the other motorist was at fault, and they do not have insurance. Under-insured motorist coverage applies when another driver is at fault, and their limits are too low to cover medical or property damage expenses. This coverage will cost anywhere from $50 to $100 a year.
Occupational Accident
Occupational accident insurance covers workers for medical, disability, death, and dismemberment benefits for accidents caused by the job. This coverage will cost anywhere from $1600 to $2000 a year.
Do you Need Trucking Insurance?
According to the Federal Motor Carrier Safety Administration (FMCSA), every truck on the road needs to have the proper insurance to conduct business and transport cargo. The FMCSA wants to ensure everyone’s safety on the road. Insurance helps because bodily injuries and property damage are covered if an accident happens. Plus, you cannot legally drive on the road without insurance. When you hire drivers with clean driving records and lots of experience, this can help to reduce insurance costs for your business. Especially with the fact there are more than 3.36 million truck drivers employed in the USA.
Although the list of insurance coverage options above is a wide variety of categories, you do have the opportunity to add or refuse certain coverages. When choosing your insurance, it is essential to think about what you would need to pay for if something happened to your drivers or your trucks. Paying for insurance may seem expensive, but it will be even more expensive if you have to pay hundreds of thousands of dollars in a lawsuit. Therefore, this makes insurance a small cost compared to not having it in the first place. If you do not have insurance, you also risk the status of your business because you need insurance to legally transport cargo across the country.
What Can Affect the Cost of Insurance?
Some factors that affect the cost of trucking insurance include the following:
- Age and experience of truck drivers
- Driver’s accident history
- Previous coverage history
- The number of years your operation has been in business
- Where you are driving and for how many miles
- Type of cargo
- Safety features of the truck
- Weight of the truck
All of these factors will be taken into account when an insurance company decides your monthly premium. It is essential to hire experienced and professional drivers without any history of accidents and that you ensure that your truck is safe. Although you cannot control some things, you should try to have the best conditions to lower the cost of your insurance.
