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Trucking Insurance Buyer’s Guide for Owner-Operators

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As an owner-operator, you’re used to having a lot on your plate. Owning your own truck and running a trucking business is no small feat. One of your biggest concerns and costs is your trucking insurance program. While you are in total control of your business, you also have more on the line. This means obtaining the right insurance at a competitive premium means has a significant impact on the success and longevity of your operation. 

How Much Insurance You Actually Need

Legally, truck drivers need a minimum liability coverage of $750,000. However, this is only the bare bones when it comes to commercial truck insurance. Some types of drivers will need at least $1 million in coverage; especially new ventures.

When you think about the cost of being an owner-operator, chances are that you’re not looking to increase any of your monthly expenses. Between maintenance, fuel, operating costs and loan payments, it can be tempting to go with the least expensive coverage to get some breathing room.

However, less coverage also means a higher risk. Most owner-operators start off in debt, which can multiply tenfold if they’re involved in an accident with less than adequate coverage. You should fully explore all of your options and consider having at least $1 million in liability coverage and physical damage insurance.

Insurance Policies You Won’t Want to Operate Without

While you can always expand your coverage, there are the fundamental types of trucking insurance that you won’t want to drive without. Combining them will help prevent you from falling into the many coverage gaps that arise from inadequate policies.

Bobtail and Non-Trucking Liability 

Aside from primary liability and cargo insurance, you’ll also want to invest in bobtail and non-trucking liability insurance. Bobtail coverage kicks in whenever you’re driving your truck without a trailer attached. Non-trucking liability, on the other hand, covers any incidents that occur when you’re driving your truck for non-work-related purposes; with or without a trailer hitched. 

Physical Damage Insurance

Physical damage coverage functions the same way comprehensive and collision policies do for standard auto insurance. This protects you against any of the spontaneous, unexpected and non-vehicle damages you might encounter on the road. This includes fire, theft, vandalism, and weather-related incidents. 

Medical Payments Coverage

With accidents often come injuries. While large medical expenses will likely be picked up by the at-fault party’s insurance company or your health insurance policy, a nominal amount can be paid by medical payments coverage. Limits of $5,000 and $10,000 are common and will pay for injuries to you or a passenger. 

Motor Truck Cargo

Although not required by law, motor truck cargo coverage will most likely be required by your freight brokers. This coverage will pay for the loss or damage to your load. Expanded coverage options can also pay for lost income, debris removal, and pollution cleanup expenses. 

Trailer Interchange 

Unless you exclusively haul using your own owned trailer, trailer interchange coverage will be necessary to insure the trailers you hitch to across the country. This coverage will protect the trailer owners from theft or damage while you are in the trailer’s care, custody and control. 

Uninsured and Underinsure Motorist Coverage

This coverage is not inexpensive, but is worth every single penny. Every day there are thousands of drivers who drive vehicles without enough or any insurance coverage of their own. This leaves you vulnerable to all damage and injury costs in accidents where you were not at fault. As a bonus, this coverage will also pay for injuries sustained if you are injured as a pedestrian or bicyclist. 

How Much Does Insurance Cost for an Owner-Operator?

Being your own boss and running a business with your own truck grants incredible freedom. But it also costs a lot more. It’s not uncommon for company drivers to make just as much or even more than owner-operators, especially those who are just starting out. While you certainly have a great chance to build a successful and lucrative career, you must plan ahead and account for the additional costs of operating independently.

Commercial trucking insurance can range anywhere from $8,000 a month to over $20,000. The cost of your insurance premiums will be based on several factors, including your experience, driving record, the routes you drive and the type of commodities you transport.

Getting the best deal on trucking insurance starts by evaluating your needs. The better you understand your risks, the more likely you are to find a policy that provides the best coverage at the right price. Insurance needs also change over time. Insurance coverage that meets your needs today may be insufficient further down the road, making it important to regularly review your policies. 

Don’t Go with the First Quote You Get

Many owner-operators make the mistake of seeing insurance as nothing more than a necessary evil. When they fail to see the value in their insurance coverage as an investment, they wind up going with the first company they find. Often failing to research and compare quotes leaves drivers overpaying and underinsured.

The best thing you can do is make a commitment to research all the various types of commercial truck insurance. This includes learning which coverages make the most sense for you and choosing limits that are worth paying for. Sometimes, the lowest rates for owner-operators come with such high deductibles they ultimately wind up paying for hardly any coverage at all. Then, when involved in an accident or other incident, they must pay so much out of pocket that their insurance is practically useless. 

Finding the Right Coverage

Chances are you’ve invested thousands of dollars in your rig and operation. Perhaps you’ve even taken out costly loans to achieve your dream of being an owner-operator. Insurance is the best way to protect that investment and give yourself the best start to a long career. 

Work with an independent insurance agent who specializes in the trucking industry. Their expertise and access to multiple insurance companies will help you find the right coverage for the most competitive premium.