Owner Operator Truck Insurance 101

So you’ve made the decision to become an owner and operator rather than work for another company. Congratulations are most certainly in order, but you’ll want to proceed with caution to maximize the opportunity before you. One of the first tasks to take care of is to secure owner operator insurance. Just like insuring your car or your health is intended to bring you peace of mind, the same applies to getting insurance for your truck as well as your new business.

Don’t Rely on Your Broker or Insurance Agent 100 Percent

While insurance brokers and agents can most certainly help you find the perfect plan for your truck insurance requirements, you shouldn’t leave everything up to them. Instead, it’s better that you familiarize yourself with the different types of truck coverage, how they work and whether you truly need them. Agents and brokers are undeniably helpful, but they can also prove to be great teachers. You don’t have to become an insurance expert, but you should make yourself as knowledgeable as possible.

Learn the Basics

Part of getting the most out of your truck insurance is knowing all the options available to you for coverage. Some of the essentials common to policyholders everywhere include:

  • Under/Uninsured Motorist Coverage – In the event you get into an accident with a motorist who doesn’t have coverage and is at fault for the incident, you’ll need under/uninsured motorist insurance to make sure you aren’t paying for someone else’s oversight out of your own pocket.
  • General Liability Coverage – Say you’re on someone else’s property and accidentally cause damage to that property. Such instances that take place on truck stops, loading docks and the like fall under liability coverage. Additionally, this type of insurance takes care of mistakes made while making a delivery.
  • Physical Damage Coverage – Should someone damage or steal your truck, you’ll be glad to have physical damage included in your policy, which handles the repair and replacement of your equipment.
  • Primary Liability Coverage – No matter how great and careful of a driver you are, no one is immune from making mistakes. Should you physically harm someone else during the course of business, your primary liability coverage is intended to take care of the resulting medical bills.
  • Motor Truck Cargo Coverage – With this, you’ll be covered in the event you have a refrigeration mishap, have your cargo stolen or experience a wet load. Here, you want to make sure your insurance agent provides you with a broad form policy rather than a specified peril policy.

What You Can Expect to Pay

Rather than focusing on the overall price of insuring your truck, you should instead pay close attention to what’s included in the quote and the policy. You don’t want to save money upfront only to have to spend much more later on out of pocket because of gaps in your coverage. Because deductibles are often a major part of getting the claims process started and saving money on your policy, make sure you know just what kind of deductible your plan has. For instance, will you have three separate deductibles for your cargo, trailer and truck, or just a single deductible cost for all three? While one policy might be more expensive, you could end up shelling out a lot more for another “less expensive” policy that has three different $1,500 deductibles.

Understand the Conditions of Your Coverage

While you’re checking off each type of basic coverage, dig deeper into what’s included with the coverage provided by each insurer. For instance, going back to the specified and broad form policies described above, if the incident that caused you to file a claim in the first place doesn’t fall within specific conditions listed on your policy, paying for damages will likely be entirely left up to you. Because it’s impossible to know when you’ll need to file a claim and why you’ll need to file a claim, both you and your finances are likely much better off with generous coverage.

Your Agent Should Be Familiar With Your Industry

Just like you want to familiarize yourself with the insurance industry, your agent should know a few things about the trucking industry. This is because your agent will have a better idea of the types of incidents, accidents and worries truckers have, which allows them to offer them better coverage and better service. Taking your insurance needs to an agent who doesn’t know about your industry is like taking your truck to a cardiologist for repairs.

Do your due diligence when it comes to insuring your new owner-operator venture. Your efforts are sure to serve you and your truck well on the road ahead.

5 Steps to Becoming an Owner Operator in the Trucking Industry

Many commercial drivers dream of the day they become an owner operator instead of simply making money for someone else. If becoming an owner operator is a goal of yours, then you probably also anticipate being able to make your own schedule as well.

The journey toward actually reaching this goal may seem too complicated for many to achieve but with a little bit of focus and hard work, the benefits of being an owner operator could be yours sooner than you would think. The process is easiest for drivers who have already had a few years of experience behind the wheel. While driving truck for someone else, you are gaining a more complete understanding about each part of the trucking industry, and this understanding is what is sure to help you succeed in your goal.

One Step at a Time

Though the process may seem daunting, drivers who are willing to take one step at a time and realize that each step is imperative to the end goal become owner operators sooner than most would have thought possible. Following are five steps that can lead you to your goal of ownership.

  1. Important Numbers – The first step you need to take is to get a registered with the Federal Motor Carrier Safety Administration (FMCSA) and get a USDOT number. This number will be used to identify and collect information about your safety information. This information includes any compliance reviews, inspections, data collected in audits and crash investigations. Once you have a USDOT number, You will need to request an Interstate Operating Authority (MC number). The kind of operating authority you need will depend on the type of cargo your plan to haul. There is a one-time fee to get a MC number from the FMCSA.
  2. Understanding Authority – By registering through the Unified Registration System (URS), you will be able to get our trucking authority in 20-25 business days. You will need to have your insurance company provide proof to the FMCSA that you have liability coverage.
  3. Insurance – You may think, while looking at insurance for your truck, that it is just in case of vehicle accidents. Understanding owner operator insurance requirements is something that you need to fully understand before moving forward in the process. Truck insurance is very different than simple auto insurance as it protects not only the owner, but also covers any loss of load or other assets. Certain kinds of insurance coverage are required by the FMCSA depending on what you plan to haul. Some types of freight, such as hazmat loads will require very different insurance than standard loads. The average insurance cost for an owner operator with one truck varies from an average of $8,000 – $12,000 per year.
  4. Lease or Own – One of the most difficult decisions, when considering becoming an owner operator. One of the biggest reasons that you might want to consider leasing a truck is that commercial trucks cost a lot! A decent used truck can cost anywhere from $60,000 to $100,000. Some leasing companies, however, do provide the option of leasing to own. This means that each lease payment gets you a step closer to ownership without having to pay the whole cost up front. If you decide that this is the right option, you may be required to haul for the leasing company, as well as find your own loads.
  5. Understanding Load Boards – Finding loads is one part of owning that many drivers do not get much experience with until they become owner operators. Thankfully, technology has made this process much easier than in the days when owners had to make phone calls looking for loads. The internet has many websites called load boards which are dedicated to helping owner operators find loads. Some of these boards are free, while others require a monthly membership fee for brokers and carriers. Even more convenient is the fact that many of these job boards have easy-to-use apps that can make grabbing the next load on your smartphone or tablet a breeze.

What You Need to Know About Truck Liability Insurance

Crunch the Numbers and Take the Leap

Taking a look at each step in this process before actually making the step can help you understand the costs of setting up as an owner operator. Make sure you factor in other costs that you will be faced with as the truck owner, so you will have a realistic view of how much money you can actually make. These costs, known as average operating costs are often calculated and called the cost per mile. You should include anticipated costs for fuel, vehicle repairs and necessary services, fees, taxes and a savings account that will help with any unexpected occurrences.

Though the process could take you several months, you will realize who worthwhile the work has been once you begin seeing the earning potential that is available to truck owners. Stop dreaming about being your own boss and take the leap as you change your life, your family life and your career for the better.