Auto insurance in general can be expensive depending on a variety of factors, some of which are out of the driver’s control. So why is auto insurance so expensive for truckers?
In general, auto insurance prices are influenced by a multitude of different aspects. Factors based on the driver include:
- Driving record
- Credit history
- Amount of coverage
- Value of the insured vehicle
- Years of business (for trucking companies)
Influences out of the driver’s control are:
- Cost of surrounding vehicles
- Number of uninsured motorists
- Claims in the area
- Cost of living in the area
For trucking, all these factors count—as does the weight of the vehicle, the danger of its cargo and where it’s going. Trucks that transport dangerous or volatile cargo typically cost more to insure.
This is all because insurance agencies consider the cost of risk to insure someone. When signing an insurance policy, an insurance company will look at the likelihood that they will have to pay for a claim. The higher risk a driver or company presents, the higher likelihood that the insurance company will have to pay for repairs. This means they charge more to make up for the possibility of the insured filing a claim.
How Much Does Trucking Insurance Cost?
Additional to the previous factors, it also matters who is insuring the vehicles. For owner operators, trucking insurance is expensive. A trucking company may pay anywhere between $8,000-$12,500 a year for one truck.
What Type of Insurance Does a Trucking Company Need?
The Federal Motor Carrier Safety Administration (FMCSA) has specific liability guidelines for companies with interstate truckers. You must carry at least:
- $300,000 in liability IF the freight carries non-hazardous materials and weighs under 10,001 lbs.
- $750,000 in liability IF the freight carries non-hazardous materials and weighs over 10,001 lbs.
- $1,000,000 in liability IF the freight carries oil
- $5,000,000 in liability IF the freight carries other hazardous material
Check with your state as well, as they may have additional or different requirements. Liability insurance isn’t all a trucker or trucking company needs, however. You should also invest in cargo insurance to protect the transported materials, comprehensive coverage, collision coverage and personal protection insurance for the driver. There are also optional coverages such as bobtail insurance, non-trucking liability insurance, trailer interchange, uninsured/underinsured motorist and trucking umbrella insurance. A trucking umbrella insurance policy fills in the gaps left by your other liability policies.
Ways to Lower Your Trucking Insurance Costs
While some costs are out of your control, it’s possible to lower your premiums.
- Build your credit. Credit scores from drivers and the insured matter. You can save money by paying off credit cards and taking other measures to build your credit.
- Drive safely. A clean driving record is the easiest way to find cheap trucking insurance rates.
- Pay higher deductibles. A higher deductible can save you money on premiums but be sure that it doesn’t cost you more money in the long run.
- Purchase minimum coverage. Be careful when selecting coverage. It’s important to have the right amount of protection for you or your company, but there may be optional coverages offered that your fleet doesn’t need. Go over your policy carefully to decide on the right coverage.
- Shop around. Different insurance companies offer different rates. There are some companies that may have more forgiveness for drivers with bad credit and bad driving records.
Trucking insurance can be expensive. Be sure to stay vigilant and vet drivers for their driving record to make sure you have a reliable team that won’t make your insurance rates go up.