July 2

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A Guide to Semi Truck Insurance Costs

Insurance policies are vital for any semi truck driver. An insurance policy can help cushion against any financial burden that may arise due to a driving accident.

Indeed, no matter how careful a trucker is, accidents can happen. The risk of getting into an accident is higher for semi truck drivers since they travel long distances and drive under different weather and road conditions. The average semi-truck insurance cost may seem like a burden, but it will be cheaper than the financial ruin that an accident can bring to an uninsured trucker.

In 2018 alone, a total
of 4,136 people died in large truck crashes. These incidents get higher every
year.

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Additionally, an insurance
policy helps give an extra layer of protection to the driver and the truck and
its cargo. Having an insurance policy also helps provide peace of mind to a
trucker, which can lead to a better and safer driving experience.

Types of Semi Truck Insurance

Just like with other
types of motor vehicles, there are several types of insurance policies
available to semi trucks. Each of these policies has its coverage and
limitations. A semi truck can have more than one type of insurance policy.

General Liability

General Liability is the
most basic insurance policy for semi trucks. Its coverage is very basic, and
this is the usual type of insurance policy carried by motor fleets. Most states
have laws requiring a commercial semi truck to have General Liability insurance.

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General Liability
insurance covers damage to the public. It also helps protect a trucking company
from any liability that may result from daily operations. Although it is not an
all-encompassing coverage, it can protect a trucking company in the event of
litigation.

Since General Liability offers limited coverage, most commercial cheap commercial truck insurance rates companies supplement their General Liability with other insurance policies such as Comprehensive Insurance, Collision Insurance, and Trailer Insurance.

General Liability
usually costs around $42 per month or $500 per year.

Trucking Liability

Trucking Liability is an insurance policy covering injuries and property damages that a trucker may cause to others while driving. Trucking Liability is also known as Primary Liability Insurance. The USA requires commercial trucking companies to have proof of financial responsibility if they intend to use federal highways.

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Federal laws require
trucks that carry non-hazardous cargo to have Trucking Liability insurance with
a minimum coverage of $750,000.

When a driver has
Trucking Liability insurance, it covers damage to public property and any
injuries sustained by other drivers. It will not cover any loss due to fire,
vandalism, theft, or acts of nature. This means that a trucker might need to
have supplemental insurance policies that will help protect their assets.

Trucking Liability
ranges between $795 (specialty truckers) to $930 (transport truckers).

Non-Trucking Liability

This type of insurance
covers damages or injuries to third parties while a trucker is driving. What
makes this different is it covers damages that occur while a trucker performs
non-business-related activities. An example is any damage that a driver causes
while running personal errands.

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Non-Trucking Liability
is standard for drivers who are under lease. Although they have General
Liability Insurance through their motor carrier, that insurance is only in
effect while they are performing their commercial duties.

Non-Trucking Liability
costs around $29 to $50 per month.

Bobtail Insurance

Bobtail Insurance is
also known as Deadhead Insurance. Most people have never heard of this kind of
insurance.

Bobtail Insurance is
essential for independent truck operators since it provides coverage for a
truck in all types of circumstances. This is crucial when a trucker is driving
without a trucking company’s sanctions because this means that a Primary
Liability Insurance does not cover the truck.

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Bobtail Insurance covers
damages sustained while a truck is not on commercial operations. Examples are
damages that occur off the job site or at service stations. Bobtail Insurance
often requires supplementary insurance policies that allow full coverage of a
vehicle.

On average, Bobtail
Insurance may cost between $90 to $100 per month.

Physical Damage

Physical Damage
Insurance is a policy that covers any damage or repairs to a truck as a result
of accidents, theft, natural disasters, or vandalism. Unlike other types of
insurance policies, the law does not require having Physical Damage insurance.

Physical Damage
Insurance has two parts: Collision Insurance and Comprehensive Insurance

  • Collision
    Insurance
    is a type of
    commercial truck insurance that gives truckers coverage if their vehicle gets
    damaged or destroyed, whether in a crash, rollover, collision, or other driving
    accident. The coverage that Collision Insurance usually provides is by means of
    a compensation to the driver.
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Collision
Insurance is not required by law, but it is a nice-to-have for most drivers. Since
truck drivers travel thousands of miles, they also drive through different road
and weather conditions. These conditions can increase the possibility of
getting into an accident. Having Collision Insurance can provide a driver with
peace of mind.

  • Comprehensive
    Insurance
    is a policy that
    covers damages not resulting from driving accidents. This is a policy that
    covers theft, fire, or vandalism. Comprehensive Insurance may be the most vital
    insurance policy that a commercial driver can acquire. It protects the
    equipment and livelihood of drivers.

One of the most
important aspects of a Comprehensive Insurance is its coverage for the victims
of an accident. It covers damages to the truck even if the party at fault is
uninsured.

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Comprehensive Insurance
does not cover damages to the cargo or the trailer. This is due to the fact
that most of the time, the trailer and cargo is not the property of the driver
hauling it.

Physical Damage
Insurance can cost between $1,000 to $3,000. This includes collision and
comprehensive insurance.

 

Cargo Insurance

Cargo Insurance is also
known as Motor Truck Cargo Insurance. This policy covers the cargo that a truck
carries. It provides coverage to items that become lost or damaged.

Cargo can be expensive
and sometimes dangerous. Cargo Insurance is an excellent way of providing
coverage in order to protect the trucking business. There are also special
Cargo Insurance policies meant to cover hazardous materials such as fuel or
chemicals.

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Cargo Insurance can help
shield a company from the financial damage that loss of cargo may bring.

Workers’ Compensation

This is an insurance
policy mandated by law. This policy covers the cost of lost wages and medical
bills that may arise from work-related injuries.

Other Factors that Affect
Insurance Cost

Insurance premiums for
semi trucks differ. Several factors determine how much an insurance premium for
a semi truck will be. These include:

Location

Like with any other
products or services, location can significantly affect an insurance policy’s
cost. Truckers in rural areas can expect to pay less compared to those who
operate in a large metropolitan area.

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Type of Cargo

Truckers are aware that
the value of their cargo will dictate the premium of their insurance policy. If
a trucker hauls scrap metal, the policy will be cheaper than a trucker that
transports food products.

Truckers that transport
high-value or hazardous cargo will also have a more expensive insurance
premium.

Insurance History

The insurance history of
a trucker also plays a significant role in determining an insurance policy’s
price. Truckers that haven’t had any insurance policy before should expect
higher premiums. Those who have had insurance policies before can expect better
rates. The longer the trucker’s insurance history is, the better the pricing
will be.

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Driving Record

This is where a driver’s
clean driving record comes to play. Semi truck drivers with a history of
accidents and violations should expect heftier insurance premiums.

Credit History

Credit scores can also
impact the insurance premium that a semi truck driver needs to pay. Most
insurance companies now run cursory credit checks on drivers applying for an
insurance policy. Although the credit check is not as stringent as those run by
credit card companies, expect a low credit score to significantly impact
insurance premiums.

Operating Radius

Semi truck operators that service
customers from distant areas are in greater risks of dealing with accidents
because they may need to drive for long hours. Additionally, they may need to
use different routes, which can be complicated and dangerous.

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Since local semi truck operators don’t
deal with these challenges, they can save on their insurance policies.

This legend shows whether a business
operates in (1) local, (2) intermediate, or (3) long distance.

·     Local – Travelling of
less than 50 miles

·     Intermediate –
Travelling of 51 to 100 miles

·     Long Distance –
Travelling of more than 200 miles

Conclusion

Insurance is an expense
that most people try to avoid. It is easy to forget about it and just hope that
there won’t be any need for it. However, being uninsured can lead to bigger
problems for truckers.

Aside from the fact that
some insurance policies are required by law, being insured is a safeguard that
can help protect the driver, the semi truck, and the cargo. An insurance
policy’s cost may seem steep for some, but it is an investment worth making.

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Do you have any questions? Comment below!


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