Understanding the many truck insurance coverages
An insurance summary of basic coverages for the truck and transportation
Insurance is one of the largest fixed expenses that a trucker or trucking
company faces today. It is one area that all individuals and companies
need to revisit at least annually to make sure their needs are being met.
There are various factors that impact insurance costs, such driving records,
age of the driver, age of equipment, commodities hauled, radius, vehicle
location, loss history, years in business and the list goes on.
There are several types of trucking-related insurance coverages:
- Physical Damage insurance is coverage for your truck and
trailer. Your premium is based on the value of your equipment. Usually a
percentage of the value. This coverage is not required by law but if you
finance your vehicle the lienholder will require it. It is important to
insure your vehicle for the real value. Not over or under value the
vehicle as the insurance company will only pay market value at the time
of the loss.
- Primary Auto Liability insurance is required by federal
regulations. Every carrier must carry liability insurance on every rig
even on leased units. Liability insurance protects you when a third
party is injured in an accident. Owner-operators should ask when leasing
onto a company who will pay for their insurance - the company or from
driver weekly settlements.
- General Liability insurance protects the business for any
property damage or bodily injury that might occur which does not
involve a truck. Typical examples of this would include the slip and
fall exposure at your place of business, advertising related exposures,
and/or contractual exposures you may get involved in.
- Non-Trucking Liability insurance pays for an accident when the
driver/truck is not under dispatch. The coverage is sometimes referred
to as deadhead coverage or bobtail liability.
- Non-Owned Trailer Liability coverage protects the trailer you are
pulling for someone else.
- Non-Owned Trailer Physical Damage coverage insures the trailer
you are pulling for someone else in the event of loss. $20,000 is
somewhat standard for trailers.
- Trailer-Interchange Liability coverage protects a trailer you are
pulling when there is a interchange agreement in force. For example with
a steamship line.
- Cargo Insurance covers damage/loss to freight in transit. This
coverage can have many exclusions such as unattended vehicle, maximum
theft limitations on target commodities such as garments, liquor,
electronics and a whole host of others. It is very important to read
this policy closely in the event you think you may be covered for
something and you are not.
- Terminal Coverage protects freight located at specified terminals
in the event of loss. Usually there are time limitations related to
this coverage. For example: 72 hours maximum per specified load. If the
goods are stored longer than the terminal time you would most likely
want to purchase Warehouse Legal coverage. Again very important to read
your policy. This amount of coverage is dependent on the total amount of
goods stored/docked/off-loaded at any one time.
- Warehouse Legal coverage protects goods stored at specified
locations in the event of loss. For example as relates to theft, fire,
sprinkler damage. This amount of coverage is dependent on the total
amount of goods stored at the location at any one time.
Once you have determined what insurance coverages you desire or need then you
can rate shop. It is essential to work with an insurance brokerage, like
Western Truck Insurance Services, who understands the trucking industry so
that you purchase the right insurance with the best company at the lowest
In future articles, I will explore these coverages in more depth and what you
can do to keep your premiums low.
Truck Insurance Articles
Truck Insurance Cost and Quality
Commercial Truck Accident Claims Reporting and Handling
Understanding the Many Coverages
Understanding Fleet Insurance Options
Understanding Payment Options
Understanding Motor Truck Cargo Insurance