Trucker's Guide to Truck Insurace 

What is liability insurance?

Liability insurance protects you if you are at fault for an accident and hurt someone or someone's property. Liability insurance does not pay for you or your property, but instead protects you from damage you cause to other people and their property. For example, if while driving you hit another vehicle and destroy this vehicle, your liability insurance will pay to repair or replace that vehicle.

 Is Auto Liability and Truckers General Liability the same?

Auto Liability provides coverage for an accident caused by the operation of a motor driven vehicle. Truckers General Liability provides coverage for an accidents that happens outside the vehicle. Example: you back up to a loading dock, open trailer, remove a load brace and place the brace on floor of warehouse. Someone trips over the brace. The brace, not the auto, is the cause of the accident, and would be covered under the trucker’s general liability.

General liability also covers the action of a driver while on the premises of others. For example, while waiting in line at the loading dock or fuel line at the truck stop another drivers cuts in front of you, words are exchanged, and before you know it you have punched another driver, and he is on his way to the hospital.

 truck insurance

What are the different types of auto liability insurance?

 Trucker’s auto liability insurance is defined as Primary Liability, Bobtail Liability, Non-Trucking Liability and Un Laden Liability.

Primary Liability is the most basic auto liability coverage. It covers you while driving your truck against damage you may cause to other people or property. It is a required coverage, either direct or by lease agreement, on all commercial vehicles.

Primary liability is a two part policy that includes a limit to be used to pay for injury to the other person, and a limit to be used for the loss of the other person’s property. 

These limits can be split between Bodily Injury and Property Damage or a single limit that covers both. 

Most liability policies are issued as a single limit policy because liability protects you from damage you cause to the other person or the other person’s property.  The limit of liability applies per accident.  The limit you select is the most the insurance will pay for any one accident.  You should, therefore, select a limit that protects your assets. 

FMCSA's minimum is from $750,000 to $5,000,000 depending on commodities transported. Go to Federal Motor Carrier's web site at http://www.safer.fmcsa.dot.gov/ for details. Auto haulers are required to carry $1,000,000 and most shippers require a million therefore, a limit of one million has become the norm.

 Bobtail Liability provides coverage on a commercial vehicle leased to a DOT approved motor carrier when the vehicle is driven without a trailer attached.

Non Trucking Liability provides coverage on a commercial vehicle leased to a DOT approved motor carrier when the vehicle is driven for personal use.

UnLaden Liability provides coverage on a commercial vehicle leased to a DOT approved motor carrier when the vehicle is been operated with or without a trailer but is not moving freight.

Insurance companies require a lease with a DOT approved motor carrier before providing coverage of Bobtail, Non Trucking and UnLaden liability insurance. "No lease/No Coverage" You can bet on that and take your money to the bank.

trucking on the road

What is Physical Damage Insurance?

 Physical damage is a defined cause of loss insurance policy. Collision is the primary coverage and pays to repair or replace your vehicle due to a loss cause by collision with a fixed object or other vehicle. A loss caused by something other than collision is defined as Comprehensive or Specified Perils coverage.

Comprehensive pays for any other cause of loss unless that cause is excluded. Specified Perils will list the cause of loss covered. Normally that will be Fire, Theft and Windstorm.

Can I add physical damage insurance to a non-owned trailer?

Most insurance carriers that provide physical damage insurance to motor carriers will add coverage for a non-owned trailer. A number of carriers will use the wording "while attached to a covered auto". The problem with this wording is the insured might still be responsible for the trailer when it is not attached. Ask the carrier to change the wording to "in insured's care, custody or control"

Trailer Interchange is an option, but this coverage requires a written trailer or equipment interchange agreement, therefore, this may not apply when a trucker has a non-owned trailer in his possession. This coverage includes a container under the definition of a trailer.

An inter modal operation would use this coverage when a trailer chassis and a container is interchanged. Trailer Interchange does not require that the trailer be attached at the time of loss.

Physical Damage on a non-owned trailer can be added to the Hired Auto Liability Coverage. Hired Auto extends coverage to trucks, tractors and trailers that are leased, hired, rented or borrowed by the insured.

Physical damage under Hired auto section provides coverage on a tractor as well as trailer. The insured must keep a record of the number of vehicles hired and number of days the coverage was used.

Hired Auto coverage is a consideration for short term coverage, but standard physical damage is a better option for long term trailer leasing exposures.

What about Towing, Glass Breakage, Personal Items, Down Time?

Nothing standard about coverage for these items. Coverage is available but each insurance company has a different spin on how they offer the coverage. Best suggestion, discuss the need with your agent.

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How long do I have to notify my insurance company if I get a new truck?

This will vary by insurance company. With some coverage it's automatic. 15 days is average 15 days is average for newly acquired vehicle, 10 days on substitute vehicles. My experience tells me to notify the insurance company before you move the truck. Read your policy

What are exclusions on an insurance policy?

Exclusions are items not covered under an insurance policy. Insurance agents joke about exclusions by saying the only coverage you have after reading the exclusions is fire insurance on pig iron under water.

Exclusions define the intent of the policy. Read the exclusions and be sure you can comply. Exclusions will jump all over you at the time of a loss. I am not talking about Civil Authority, Nuclear Hazard, War and Military Action exclusions.

The exclusions you control are the ones that will jump all over you at the time of a loss.

Several examples of exclusions include,

Unreported Drivers, No Lease Agreement, Unreported equipment. Claims not supported by a police report.

 How can I save money on my truck insurance?

Driving experience is a factor but once you get the experience, two-three years, driving record, credit score, and claims record become are the items most companies live and die by. You cannot expect to save money on your truck insurance if these items are below average.

Will attending driving school lower my rate?

Some States are on a point system and require attending a driving school when you reach a certain point level. Driving school will help with your driver’s license but will not help with the cost of your insurance. The ticket that caused the points is what the insurance company looks at.