What is commercial truck insurance?
Commercial truck insurance is a collection of auto insurance policies specifically tailored to trucking and other businesses operating large commercial motor vehicles.
By law, coverage will always include primary liability insurance, which pays for bodily injury to third parties and damage to their property resulting from an accident. Other common coverage includes physical damage coverage and motor truck cargo insurance.
Commercial trucks require specialized insurance coverage for a number of reasons:
What does commercial truck insurance cover?
What is covered by your commercial truck insurance will depend on the types of coverage you opt for and any exclusions outlined in the policy agreement.
Most incidents involving your vehicle can be covered – depending on the policy – but it’s important to note that:
Exclusions
Commercial truck coverage will normally exclude:
Policy Considerations
Similar to most insurance policies, companies looking for coverage should keep in mind the four basic components of a policy:
Who needs commercial truck insurance?
Any business that operates trucks or other large commercial vehicles will need to carry commercial insurance for their vehicles. The most common companies include:
Vehicles requiring commercial policies include:
Types of Coverage
What your commercial truck insurance policy covers will vary based on your specific needs. Below is an overview of the most common types of coverage.
Primary Auto Liability
Also known as trucking liability or primary liability, this coverage pays for third-party bodily injury and property damage and is required by law. For interstate truckers, policy limits are set by the FMCSA and for intrastate truckers, policy limits will be set by the state.
Physical Damage Coverage
Physical damage insurance covers the repair or replacement of owned vehicles or trailers from any covered incidents. The most common types of coverage include:
Common endorsements include:
Medical
Covers medical payments for truck drivers and their passengers during an accident.
Uninsured/Underinsured Driver
Provides protection in case a third party is at fault during an accident but doesn’t have sufficient coverage.
Motor Truck Cargo Insurance
Motor truck cargo insurance protects motor carriers if any goods are damaged or lost while in their possession. Optional endorsements include reefer breakdown coverage, which covers sensitive cargo that is damaged because of refrigeration issues and earned freight coverage, which covers lost income if cargo is damaged and is rejected by the broker or shipper.
Non-trucking Liability
Most motor carriers require owner operators driving under their authority to carry non-trucking liability insurance, which provides coverage when an owner operator is not driving for the carrier. A trailer may or may not be attached. However, some carriers require owner operators to carry bobtail insurance instead of non-trucking in their lease agreements.
Bobtail Liability
Some motor carriers require owner operators to carry bobtail insurance, which covers owner operators anytime they are driving without a trailer. The carrier’s lease agreement will dictate whether an owner operator needs non-trucking or bobtail.
Trailer Interchange Coverage
This coverage protects carriers against physical damage to a third-party trailer in their possession (attached to the truck or not) while under a trailer interchange agreement. Owner operators may also need trailer interchange if they haul trailers owned by their motor carrier.
Non-owned Trailer
Similar to trailer interchange, non-owned trailer provides protection against any physical damage to a third-party trailer. While a trailer interchange agreement isn’t needed, it only covers trailers while they are attached to the truck. A trailer sitting in a yard would not be covered, even if it is in the possession of the trucker.
On-hook Coverage
Designed specifically for tow trucks, this covers the repair or replacement of any vehicles that are damaged while they are being towed.
Federal & State Law
Companies must comply with the state insurance requirements where they are registered. However, companies involved in interstate commerce must also comply with Federal Motor Carrier Safety Administration (FMCSA) insurance requirements.
Federal Requirements
select hazardous waste)
State Requirements
Companies engaged in intrastate commerce that doesn’t involve hazardous cargo are not regulated by the FMCSA. However, these companies must still comply with state-level insurance requirements.
Insurance requirements vary from state to state, so companies will need to check with their state’s regulatory authority or speak to an insurance agent to confirm their specific requirements. For example, while California’s liability insurance requirements are similar to the FMCSA, Texas only requires $300,000 in liability insurance for non-hazmat vehicles under 26,000 pounds and $500,000 for vehicles over 26,000 pounds.
How much does commercial truck insurance cost?
Insuring a semi-truck typically costs motor carriers $10,000-$30,000 a year while owner operators driving under someone else’s authority can expect to pay $3,000-$5,000.
Insurance premiums can be even higher for carriers that transport valuable or hazardous cargo. New ventures or high-risk drivers can also drive up premiums.
While these ranges can be quite large, the important takeaway is that trucking insurance is expensive and owner operators that lease onto a motor carrier save a significant amount of money on insurance because they do not need to pay for primary liability insurance – which is typically the most expensive coverage.
Companies running other vehicles, such as box trucks or pickup trucks, will typically have lower premiums than the figures listed above but it can vary widely based on a range of factors.
What factors affect premiums?
Down Payments
For first-time buyers, it’s important to note that most trucking insurance companies require an upfront down payment totaling 15-25% of the annual premium.
For new trucking companies, a five-figure down payment can be an issue. Luckily, some insurance providers offer low down payment or no down payment insurance options.
How to Get Cheap Commercial Truck Insurance
It’s important to remember that the cheapest insurance isn’t always the best choice. Ensuring you have appropriate coverage will protect your business and enable you to work with a wide range of shippers and brokers.
Still, there are tactics that can help companies lower their premiums besides having a safe driving record and skimping on coverage. Here are a few tactics to use when looking to purchase an affordable truck insurance policy:
Getting a Quote
Companies should be prepared to provide the following information when requesting quotes:
Comparing Options
While it’s possible to purchase a commercial truck insurance policy online, most companies will want to speak with an insurance broker or agent to help navigate edge cases, federal or state law, and their unique requirements.
Technically speaking, an insurance broker represents multiple insurance carriers while a captive or company agent only represents a single insurance company. However, insurance brokerages may refer to themselves as “insurance agencies” and their employees as “agents” so it can get confusing. The important thing to remember is that some companies are able to provide quotes from multiple companies and others can only sell policies from a single insurance provider.
Working with a broker that can provide multiple quotes is a great way to see your different options but some insurance companies only sell through captive or company agents so it’s best to shop around and not limit yourself to a single broker.
Similarly, just because you are working with an agent or broker doesn’t mean that you should avoid doing your own research ahead of time. This will help you ask the right questions, get a baseline of what to expect, and potentially avoid companies with low premiums but bad reputations.
Methodology & How We Evaluated Insurance Carriers
To curate our list of the top commercial truck insurance companies, we selected more than 25 popular companies and then narrowed down our list based on the review factors listed below.
However, it’s important to keep in mind that there is no single best insurance company as they have varying risk appetites and specialties. Furthermore, each trucking company has its own needs and preferences.
Still, our company reviews should help get you pointed in the right direction.
Review Factors
Coverage
Customer Satisfaction
Pricing
Financial Strength
While all of our top companies are in strong financial strength, these ratings can give peace of mind.
Top 10 Commercial Truck Insurance Companies
OOIDA Truck Insurance
Best for Owner Operators
Pros
Cons
Coverage
Customer Satisfaction
Pricing
Financial Strength
The Hartford
Best for Large Fleets
Pros
Cons
Coverage
Customer Satisfaction
Pricing
Financial Strength
Owner Operator Direct (by Lancer Insurance)
Best for Owner Operators
Pros
Cons
Coverage
Customer Satisfaction
Pricing
Financial Strength
Great West Casualty Company
Best Coverage for Experienced Companies and Drivers
Pros
Cons
Coverage
Customer Satisfaction
Pricing
Financial Strength
Northland Insurance (by Travelers)
Great for Owner Operators and Fleets
Pros
Cons
Coverage
Customer Satisfaction
Pricing
Financial Strength
Sentry
Great for Specialty Truckers & Small Businesses
Pros
Cons
Coverage
Customer Satisfaction
Pricing
Financial Strength
Geico
Great for Small Businesses Not Running Semi-Trucks
Pros
Cons
Coverage
Customer Satisfaction
Pricing
Financial Strength
National Independent Truckers Insurance Company (NITIC)
Great for Owner Operators & Small Fleets; Best for Short-Term Truck Insurance
Pros
Cons
Coverage
Customer Satisfaction
Pricing
Financial Strength
State Farm
Great for Customer Service
Pros
Cons
Coverage
Customer Satisfaction
Pricing
Financial Strength
biBERK (by Berkshire Hathaway)
Great Online Experience
Pros
Cons
Coverage
Customer Satisfaction
Pricing
Financial Strength
FAQs
What kind of insurance does a trucking company need?
Trucking companies are required to carry primary liability insurance but almost every company will also want to carry physical damage insurance. Additionally, for-hire carriers transporting household goods are required to carry motor truck cargo insurance.
Owner operators on the other hand, will need to carry bobtail or non-trucking liability insurance as dictated in their lease agreement. Most also require physical damage insurance.
How much insurance do I need for a trucking company?
Most interstate carriers will need at least $750,000 in primary liability insurance but limits can be higher or lower depending on the vehicle’s weight and cargo. Intrastate carriers will need to check with their state regulatory body.
What is motor truck general liability?
General liability insurance protects trucking businesses against any incidents that are not directly related to operation of the vehicle. Examples include actions of the driver while on third-party premises and libel/slander lawsuits.
Are commercial vehicles more expensive to insure?
Yes, commercial vehicles are typically more expensive to insure than personal vehicles.
Why is commercial truck insurance so expensive?
Commercial truck insurance is more expensive compared to other auto insurance because trucks are larger and can do more damage. Trucks are also more expensive to repair/replace and log significantly more miles than most other vehicles.
What state has the lowest commercial truck insurance?
Data from Progressive lists the following states as having the cheapest insurance for vehicles with a USDOT number: