Semi truck insurance is a must-have for anyone who wants to open a trucking business. You need to be covered or you could end up losing everything.
Any vehicle can easily rack up thousands of dollars worth of damage in an accident. However, when you are dealing with something the size of a semi, that amount quickly skyrockets. Just looking at crashes involving an injury, the average cost of a semi truck accident pulling one trailer is around $334,892. If two or three trailers are being pulled, the average shoots up to more than $1.2 million.
Do you have the funds to cover all of that or even more? What about the fines and penalties that come with not being insured?
Total losses can also increase based on what was being transported. High-value cargo will automatically raise the costs. Many things have to be paid for in an accident, including towing, storage, vehicle damage, injuries, ongoing medical expenses, loss of revenue, administrative fees, and lost cargo.
Indirect losses can also be felt by a company after an accident. Clients may be lost as well as sales. Employees may lose work hours, or you may need to cover the bill to hire and retrain new workers. More money may be needed if a government agency gets involved or if you face a lawsuit.
It’s easy to see just how quickly one accident can add up. If you don’t have semi truck insurance, then you will be on the hook for all of it.
What Kind of Semi Truck Insurance Do I Need?
There are several different types of semi truck insurance available. These cover different parts of an accident or incident. General liability insurance will pay for damage to third-party property and bodily injury. Primary liability insurance covers the same thing if it is the result of a semi truck accident.
Other types of semi truck insurance include:
- Non-trucking Liability Insurance – This type of coverage protects your semi truck while it is used for non-commercial purposes. This could be times when you use it for personal trips, like stopping at the bank, going to the store, or picking up the kids. Anytime you are not driving for your business, you need non-trucking liability coverage.
- Physical Damage Insurance – This coverage pays out if there is damage done to your vehicle. It is a general term that covers things like theft, natural disasters, collision, or vandalism. It may also help pay for towing and storage costs after an incident. You should speak to your insurer to find out what is covered.
- Motor Truck Cargo Insurance – Motor truck cargo coverage will compensate you for direct physical loss to property while in transit. This also includes while cargo is being loaded or unloaded as well as while it is sitting at a terminal or dock. Some insurers may allow coverage extensions that will pay for losses related to spoilage or broken heating or refrigeration equipment.
- Bobtail Insurance – When a truck is used without a trailer, it is considered “bobtailing.” Bobtail insurance provides coverage when the truck is operated without a trailer. This works much like non-trucking liability but only pays if the truck is not transporting cargo.
- Workers’ Compensation Insurance – Most companies will be required to hold workers’ compensation coverage with their semi truck insurance. It is mandatory in almost every U.S. state. It ensures that some of the cost of injuries, medical expenses, lost wages, rehabilitation, and death benefits are covered if an employee is injured or loses their life in an accident.
The type of semi truck insurance you need may vary. You should speak to your insurer to find out which coverages are required, and which are good to have based on your personal and business needs.
What Factors into the Cost of Semi Truck Insurance?
Many things are considered when providing a semi truck insurance quote. If you lease to a company, then you may already have primary liability insurance under that business. You may need to add non-truck and bobtail coverages, which will typically come at a lower cost.
Some states have higher rates for semi truck insurance, so location is a factor. You may also have to pay more depending on your federal filing status. Federal filing is required for some trucking companies, like those who haul hazardous materials or those who operate across state lines. These have much higher minimum liability limits, which leads to higher premiums.
Used vehicles typically cost less to insure than brand new models. The type of cargo you haul and the routes you take will also be determining factors. If you have a bigger operating area, then you’ll likely have to pay more for semi truck insurance.
Just like cars and smaller trucks, driving history is reviewed when estimating insurance rates. If you have a good driving record, then you’ll get a better price. If you have a lot of violations and accidents, then you should expect to pay more. Even a minor accident can increase insurance premiums. This is especially true for semi trucks because they are much bigger, heavier, and more capable of causing catastrophic damage should something go wrong.
How Much Will My Semi Truck Insurance Cost?
The only way to know exactly how much your semi truck insurance will be is to request a quote from an insurer. They can review your specific situation and tell you what they will charge for the types of coverage that you need.
Owner-operators that lease on to a motor carrier usually pay $3,000 to $5,000 annually. If you are an owner-operator without a motor carrier, then that average increases to $9,000 to $12,000 per truck.
Rates have increased over the years for newcomers to the industry. You could pay as much as $12,000 to $16,000 for your semi truck insurance. The best way to get started is to request a custom quote. This will help you see what you need and how much you’ll have to pay to stay legal and protected on the road.