Insurance policies are vital for any semi truck driver. An insurance policy can help cushion against any financial burden that may arise due to a driving accident.
Indeed, no matter how careful a trucker is, accidents can happen. The risk of getting into an accident is higher for semi truck drivers since they travel long distances and drive under different weather and road conditions. The average semi-truck insurance cost may seem like a burden, but it will be cheaper than the financial ruin that an accident can bring to an uninsured trucker.
In 2018 alone, a total of 4,136 people died in large truck crashes. These incidents get higher every year.
Additionally, an insurance policy helps give an extra layer of protection to the driver and the truck and its cargo. Having an insurance policy also helps provide peace of mind to a trucker, which can lead to a better and safer driving experience.
Types of Semi Truck Insurance
Just like with other types of motor vehicles, there are several types of insurance policies available to semi trucks. Each of these policies has its coverage and limitations. A semi truck can have more than one type of insurance policy.
General Liability
General Liability is the most basic insurance policy for semi trucks. Its coverage is very basic, and this is the usual type of insurance policy carried by motor fleets. Most states have laws requiring a commercial semi truck to have General Liability insurance.
General Liability insurance covers damage to the public. It also helps protect a trucking company from any liability that may result from daily operations. Although it is not an all-encompassing coverage, it can protect a trucking company in the event of litigation.
Since General Liability offers limited coverage, most commercial cheap commercial truck insurance rates companies supplement their General Liability with other insurance policies such as Comprehensive Insurance, Collision Insurance, and Trailer Insurance.
General Liability usually costs around $42 per month or $500 per year.
Trucking Liability
Trucking Liability is an insurance policy covering injuries and property damages that a trucker may cause to others while driving. Trucking Liability is also known as Primary Liability Insurance. The USA requires commercial trucking companies to have proof of financial responsibility if they intend to use federal highways.
Federal laws require trucks that carry non-hazardous cargo to have Trucking Liability insurance with a minimum coverage of $750,000.
When a driver has Trucking Liability insurance, it covers damage to public property and any injuries sustained by other drivers. It will not cover any loss due to fire, vandalism, theft, or acts of nature. This means that a trucker might need to have supplemental insurance policies that will help protect their assets.
Trucking Liability ranges between $795 (specialty truckers) to $930 (transport truckers).
Non-Trucking Liability
This type of insurance covers damages or injuries to third parties while a trucker is driving. What makes this different is it covers damages that occur while a trucker performs non-business-related activities. An example is any damage that a driver causes while running personal errands.
Non-Trucking Liability is standard for drivers who are under lease. Although they have General Liability Insurance through their motor carrier, that insurance is only in effect while they are performing their commercial duties.
Non-Trucking Liability costs around $29 to $50 per month.
Bobtail Insurance
Bobtail Insurance is also known as Deadhead Insurance. Most people have never heard of this kind of insurance.
Bobtail Insurance is essential for independent truck operators since it provides coverage for a truck in all types of circumstances. This is crucial when a trucker is driving without a trucking company’s sanctions because this means that a Primary Liability Insurance does not cover the truck.
Bobtail Insurance covers damages sustained while a truck is not on commercial operations. Examples are damages that occur off the job site or at service stations. Bobtail Insurance often requires supplementary insurance policies that allow full coverage of a vehicle.
On average, Bobtail Insurance may cost between $90 to $100 per month.
Physical Damage
Physical Damage Insurance is a policy that covers any damage or repairs to a truck as a result of accidents, theft, natural disasters, or vandalism. Unlike other types of insurance policies, the law does not require having Physical Damage insurance.
Physical Damage Insurance has two parts: Collision Insurance and Comprehensive Insurance
- Collision Insurance is a type of commercial truck insurance that gives truckers coverage if their vehicle gets damaged or destroyed, whether in a crash, rollover, collision, or other driving accident. The coverage that Collision Insurance usually provides is by means of a compensation to the driver.
Collision Insurance is not required by law, but it is a nice-to-have for most drivers. Since truck drivers travel thousands of miles, they also drive through different road and weather conditions. These conditions can increase the possibility of getting into an accident. Having Collision Insurance can provide a driver with peace of mind.
- Comprehensive Insurance is a policy that covers damages not resulting from driving accidents. This is a policy that covers theft, fire, or vandalism. Comprehensive Insurance may be the most vital insurance policy that a commercial driver can acquire. It protects the equipment and livelihood of drivers.
One of the most important aspects of a Comprehensive Insurance is its coverage for the victims of an accident. It covers damages to the truck even if the party at fault is uninsured.
Comprehensive Insurance does not cover damages to the cargo or the trailer. This is due to the fact that most of the time, the trailer and cargo is not the property of the driver hauling it.
Physical Damage Insurance can cost between $1,000 to $3,000. This includes collision and comprehensive insurance.
Cargo Insurance
Cargo Insurance is also known as Motor Truck Cargo Insurance. This policy covers the cargo that a truck carries. It provides coverage to items that become lost or damaged.
Cargo can be expensive and sometimes dangerous. Cargo Insurance is an excellent way of providing coverage in order to protect the trucking business. There are also special Cargo Insurance policies meant to cover hazardous materials such as fuel or chemicals.
Cargo Insurance can help shield a company from the financial damage that loss of cargo may bring.
Workers’ Compensation
This is an insurance policy mandated by law. This policy covers the cost of lost wages and medical bills that may arise from work-related injuries.
Other Factors that Affect Insurance Cost
Insurance premiums for semi trucks differ. Several factors determine how much an insurance premium for a semi truck will be. These include:
Location
Like with any other products or services, location can significantly affect an insurance policy’s cost. Truckers in rural areas can expect to pay less compared to those who operate in a large metropolitan area.
Type of Cargo
Truckers are aware that the value of their cargo will dictate the premium of their insurance policy. If a trucker hauls scrap metal, the policy will be cheaper than a trucker that transports food products.
Truckers that transport high-value or hazardous cargo will also have a more expensive insurance premium.
Insurance History
The insurance history of a trucker also plays a significant role in determining an insurance policy’s price. Truckers that haven’t had any insurance policy before should expect higher premiums. Those who have had insurance policies before can expect better rates. The longer the trucker’s insurance history is, the better the pricing will be.
Driving Record
This is where a driver’s clean driving record comes to play. Semi truck drivers with a history of accidents and violations should expect heftier insurance premiums.
Credit History
Credit scores can also impact the insurance premium that a semi truck driver needs to pay. Most insurance companies now run cursory credit checks on drivers applying for an insurance policy. Although the credit check is not as stringent as those run by credit card companies, expect a low credit score to significantly impact insurance premiums.
Operating Radius
Semi truck operators that service customers from distant areas are in greater risks of dealing with accidents because they may need to drive for long hours. Additionally, they may need to use different routes, which can be complicated and dangerous.
Since local semi truck operators don’t deal with these challenges, they can save on their insurance policies.
This legend shows whether a business operates in (1) local, (2) intermediate, or (3) long distance.
· Local – Travelling of less than 50 miles
· Intermediate – Travelling of 51 to 100 miles
· Long Distance – Travelling of more than 200 miles
Conclusion
Insurance is an expense that most people try to avoid. It is easy to forget about it and just hope that there won’t be any need for it. However, being uninsured can lead to bigger problems for truckers.
Aside from the fact that some insurance policies are required by law, being insured is a safeguard that can help protect the driver, the semi truck, and the cargo. An insurance policy’s cost may seem steep for some, but it is an investment worth making.
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