FreightWaves Ratings cuts through the noise of freight technology product reviews to make you a smarter buyer

How to get the best commercial vehicle insurance available

Most truckers feel overwhelmed when it comes to choosing a commercial vehicle insurance provider. The wide range of federal and state regulations and different types of coverage present a ton of information that can be difficult to comprehend. 

In this guide, we’ll discuss the importance of commercial vehicle insurance, how you benefit from it, and how to obtain the best coverage for your needs. 

What is commercial vehicle insurance? 

The most significant benefit of commercial vehicle insurance is the protection it provides against financial loss in the event of an accident. It protects against property damage, bodily injury, and cargo loss or damage. 

Commercial vehicle insurance is a specialized type of policy that applies to various trucks used to transport goods across the nation’s highways. 

More than 400,000 vehicle accidents in the U.S. involve commercial vehicles. Without insurance, the total financial losses from those accidents would be astounding. 

How does commercial vehicle insurance work? 

Typically, commercial vehicle insurance is purchased by the owner of the vehicle. The annual premium is based on the size and type of vehicle, driving record, and the type of cargo hauled. The insurance only applies to the individuals listed on the policy.

Most insurance companies allow policyholders to pay in monthly installments, while others offer discounts for paying the annual premium in full upfront.

6 Steps to get the best commercial vehicle insurance available 

Choosing the right insurance coverage is a complicated process. You don’t want to settle on a policy just because it’s cheaper, especially if it does not provide the ideal amount of coverage for your company. 

So to make an informed decision, you should follow these six steps:

Step 1: Determine your coverage needs

When you’re choosing insurance you must decide the type of coverage that is best for your needs. An agent can help you determine appropriate limits for:

  • General liability
  • Physical damage
  • Uninsured/underinsured motorists
  • Comprehensive coverage
  • Medical payments
  • Cargo coverage

Other available options include trailer interchange coverage, rental reimbursement with downtime coverage, and non-trucking liability.

Trailer interchange liability covers the trucker who is pulling the trailer when an incident occurs. 

Rental reimbursement covers the cost of renting a truck for business purposes after an accident. 

Non-trucking liability covers property damage and medical expenses incurred when you’re driving the vehicle for personal reasons.

You must also choose a deductible. A deductible is an amount you will have to pay before the insurance company pays its part. The higher the deductible is, the lower your monthly payments will be. But a high deductible means you’ll have to make a larger out-of-pocket contribution in the event of a claim.

Step 2: Shop around 

Before choosing a commercial vehicle or truck insurance company, it’s best to shop around and learn as much as you can about the different types of coverage. It’s important to compare several companies to determine which one provides the most benefits for your money. 

You can avoid a lot of hassle by contacting an insurance broker. A broker is well-versed in the different types of insurance policies available for commercial truckers. They can save you a lot of time and ensure you get the best coverage that fits your budget. 

An insurance agent can also be helpful in choosing the right policy. They only represent one insurance company and are knowledgeable about the specifics of that company’s options.

Step 3: Compare quotes

If you prefer to do the research yourself, getting an online insurance quote is a good way to begin. Most insurance providers give online quotes and allow you to sign up for the insurance directly on the company’s website. 

When comparing several quotes at once, make sure each one is quoting for the same amount of coverage. You can also ask for a sample policy from the providers to help you compare quotes and coverage.

Step 4: Inquire about discounts

After comparing quotes and checking the provider’s financial strength, you’re ready to make a decision. But, first, you may want to inquire about discounts that may be available. 

Many insurance companies offer the following discounts:

  • Paid-in-Full Discount: Provides a lower premium if you pay the full year premium upfront
  • Smart Haul Discounts: If you have an ELD and share your driving data with the insurance provider, they might offer safe driving discounts ranging from 3% to 20%
  • Multiple Policy Discounts: Having other insurance policies with the provider can result in lower premiums
  • Good Claim Experience Discounts: Drivers who have been in business for more than one year and have few or no claims can qualify for discounts

Step 5: Check the claim process

Also, check the insurance company’s financial standing. Some good resources for this information are AM Best, S&P, and Moody’s. Their ratings will give you an idea of the company’s financial strength. 

You can get information about a company’s reputation by contacting the Better Business Bureau (BBB) and J.D. Power. This information will give you an idea of the insurance company’s business practices and customer satisfaction when it comes to how the company resolves claims.

It’s a good idea to check the company’s claim settlement ratio. A company with a ratio of 95% to 97% is more reliable than those with lower ratios. The ratio can be calculated by dividing the number of claims settled by the number of claims received. 

Step 6: Be aware of policy terms and conditions

Insurance policies are hard to decipher, which can leave policyholders disappointed when they try to collect on a claim. So you need to make sure you understand the terms and conditions before signing the document. 

The terms are laid out on the declaration page, which is the first section of the policy. The insuring agreement is a summary of what the company will pay for covered perils. An exclusions page summarizes what the insurance company will not cover. 

The conditions are provisions in the policy that place limits on the company’s promise to pay. If the conditions are not met, the company can deny a claim. Make sure you read the conditions and understand them thoroughly before signing.

A policy also has a definitions section that outlines the specific terms used in the policy. 

You should also study any endorsements and riders carefully, too. The endorsements and riders describe what has been added, deleted, or modified in the policy provisions. 

Insurance provides protection and peace of mind for truckers

Being a commercial trucker is a stressful occupation for many reasons. But having the right insurance coverage will give you peace of mind as you travel on busy and dangerous highways. Now is the time to get commercial vehicle insurance if you don’t already have it. Make sure you, your company, and your customers are insured in the event of a problem.

FAQ

What are the monthly costs for commercial truck insurance?

The average cost for primary liability is about $5,000 to $7,000. Physical damage costs range from $1,000 to $3,000.

What is required to be eligible for commercial truck insurance?

The FMCSA requires a motor carrier number before you can arrange insurance. A certificate of insurance is required before operating the vehicle on public highways.

What kind of insurance do truck drivers need?

Truckers need liability and comprehensive insurance that covers the driver, the vehicle, and the cargo.

We are excited to announce the launch of move.freightwaves.com, a revolutionary resource designed to transform how consumers choose auto-shipping companies. Check it out today!

TruckDrivingJobs.com

Where the best truck drivers go to find jobs nationwide!