Commercial Truck Insurance In 2022: How It Works

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GSK Imsurance Brokers

Commercial truck insurance protects trucking companies, businesses that use trucks, and independent truck drivers. This tutorial will cover everything that business owners and contractors should know before purchasing commercial vehicle insurance. This post will go over how commercial truck insurance works, the cost, different coverage options, business needs, how to acquire a truck insurance quotation, and the best insurance providers.

How Does Commercial Truck Insurance Work?

Commercial truck insurance, like other types of auto coverage, protects people by providing bodily injury and property damage liability coverage if a truck driver is judged to be at fault in an accident.

Other coverages available with commercial truck insurance include comprehensive and collision protection, cargo coverage, personal injury protection (PIP), and uninsured/underinsured driver protection. When an accident occurs, the motorist will report the claim to the insurance carrier, which will pay the covered benefits.

How Much Commercial Truck Insurance Do I Need?

Commercial trucks are required to carry minimum insurance coverage amounts depending on the vehicle and cargo being driven, according to the Federal Motor Carrier Safety Administration. The more hazardous the cargo and the bigger the truck, the more coverage drivers must have.

The following are the current minimum commercial truck insurance limits:

  • $300,000 for non-hazardous cargo in trucks weighing less than 10,000 pounds
  • $750,000 for non-hazardous cargo in trucks weighing 10,001 pounds or more.
  • $1 million for the transportation of oil by for-hire/private carriers
  • $5 million for the transportation of additional hazardous materials or explosives by for-hire/private carriers
  • Additional cargo coverage of $5,000 per vehicle/$10,000 per event for household goods being carried

Remember that these are federal minimums; additional minimums may be required by individual states, businesses, or while moving specialized cargo.

Best Commercial Truck Insurance Companies

State Farm Commercial Truck Insurance (Best Overall)

State Farm is a well-known Fortune 500 firm and the leading supplier of auto and home insurance in the United States. The Illinois-based company provides a comprehensive truck insurance program that includes coverage for personnel, cargo, and commercial vehicles.

Pros

  • Provides a wide choice of policy alternatives to meet the needs of the majority of truck drivers.
  • Among major commercial insurers, we achieved the best level of customer satisfaction.
  • Provides many discount choices to help reduce policy costs.

Cons

  • State Farm, unlike other insurers, does not provide an online quote service.
  • To obtain a quote, prospective clients must speak with a local agent.

Coverage Options

State Farm provides all of the typical commercial trucking coverage options, such as bodily injury, property damage liability, personal injury, comprehensive, collision, and uninsured/underinsured driver coverage. Through their inland marine policies, they also provide motor truck cargo and transit coverage, as well as less usual coverage choices such as ridesharing insurance.

State Farm’s commercial vehicle plans cover anything from pickup trucks to heavy equipment like dump trucks and bucket trucks, so your company’s fleet is likely to find the coverage it requires with State Farm.

Cost

State Farm has a variety of discounts to help you save money on your commercial truck insurance policy, such as the Multiple Auto discount for two or more cars insured by the firm. They also provide an Accident-Free discount, but you must be accident-free for at least three years in order to qualify. State Farm also charges lower rates for automobiles equipped with enhanced safety or anti-theft systems.

#2. Progressive Commercial Truck Insurance (Runner-Up)

Progressive was established in 1937 and is based in Mayfield, Ohio. It is consistently the largest commercial vehicle insurer in the United States, according to S&P data. With such a strong position in the commercial truck insurance market, it’s no surprise that Progressive is one of the most well-known suppliers.

Pros

  • Progressive, the nation’s leading commercial vehicle insurer, provides one of the most comprehensive selections of truck plans.
  • Progressive’s Smart Haul® Program offers reductions when an electronic logging device is used.
  • Any commercial insurer’s online price quote tool is among the best.

Cons

A recent J.D. Power survey had somewhat worse customer satisfaction rankings than similar organizations.

Coverage Options

Because of the breadth and depth of its coverage options, Progressive is well-regarded for commercial trucking insurance. In all 50 states, the firm ensures owner-operators, motor carriers, and private carriers. Progressive provides trucking-specific coverage choices like motor truck cargo, motor truck general liability, non-trucking liability, rental reimbursement with downtime, on-hook towing, and trailer exchange in addition to the primary liability insurance required by federal law.

Cost

The national average monthly cost for a new commercial for-hire truck insurance coverage (primary liability and physical damage) ranges from $640 for specialty truckers to $982 for other transportation truckers, according to Progressive’s website.

Progressive also provides a number of discount programs, such as a Business Experience Discount for businesses that have been in operation for more than three years, a Commercial Driver’s License (CDL) Discount, and the Smart Haul® Program for drivers who use an electronic logging device (ELD) and grant access to the truck’s driving data.

#3. The Hartford Commercial Truck Insurance (Best for High-Risk Drivers)

The Hartford, which began as a fire insurance firm in 1810, has since grown its portfolio to include business, home, and vehicle insurance coverage. Today, Hartford is a Fortune 500 firm with particularly strong commercial insurance capabilities, covering over one million small companies with commercial truck and vehicle policies.

Pros

  • Customer satisfaction scores were higher than those of rival truck insurance.
  • Its FleetAhead Program provides fleet managers with real-time data that may be used to improve safety and obtain larger discounts.

Cons

  • Hartford, unlike some of the other businesses in our article, does not provide online quotations.

Coverage Options

Hartford offers a diverse range of coverage options for commercial vehicle policies. In addition to standard coverages including liability, property, and uninsured and underinsured motorist coverage, The Hartford offers a variety of specialty coverages for commercial trucks. Coverages include motor truck cargo, on-hook towing, trailer interchange, property in transit, livestock transit, and other services.

Cost

Because The Hartford does not provide online quotations, you must contact The Hartford directly for pricing information. To get started, go to Hartford’s website and look for contact information.

#4. Nationwide Commercial Truck Insurance (Best for New Drivers & Companies)

Nationwide was formed in 1926, making it one of the country’s oldest vehicle insurance firms. And, with over 32,000 staff in locations around the country, Nationwide lives up to its name by making it simple for consumers to access local offices, seek quotations, and find coverage that works for them regardless of where their business is situated.

Pros

  • Customer satisfaction with its auto-specific policies is above average.
  • When compared to other providers, offers attractive discounts and economical prices for new drivers.

Cons

  • It does not cover semi-trucks or tractor trailers.
  • Customer satisfaction scores for its whole commercial insurance package were lower than those of competing truck insurers.

Coverage Options

Nationwide provides comprehensive insurance, including auto liability, medical expenses, collision, and comprehensive insurance, and uninsured and underinsured motorist coverage. Box trucks, pickup trucks, and utility trucks are among the vehicles covered, and Nationwide also provides farm truck insurance.

Cost

Nationwide offers an easy-to-use online quote system that allows you to submit information about your company and receive an estimate for the cost of a truck insurance policy. The Nationwide quotation form also allows you to select other coverages that your company may require in order to address all of your insurance needs in one step. This is particularly advantageous because Nationwide provides discounts to clients who bundle or purchase multiple plans from the company. Nationwide also gives discounts to customers who pay their annual debt in full or install anti-theft equipment on their vehicles, and they have some of the best prices for newer drivers and businesses.

#5. National Independent Truckers Insurance Company (Best for Settling Claims; Best Customer Service)

For almost 30 years, NITIC has provided trucking insurance. It is one of the insurance industry’s behemoths, noted for its quick claims settlement process. NITIC provides affordable coverage for all types of trucks, offering customizable solutions and a selection of discounted rates.

Pros

  • There are several insurance choices that meet the demands of most truckers.
  • Excellent client satisfaction in terms of policy administration and claim management.
  • One of the most cost-effective solutions on the market

Cons

  • Unlike the other insurers on the list, NITIC does not provide online quotations; customers must contact brokers directly for pricing.

Coverage Options

NITIC provides one of the most comprehensive sets of truck coverage choices in the business. NITIC provides all forms of commercial truck insurance alternatives under one roof, from primary liability and non-trucking insurance to refrigeration breakdown and trailer interchange. They cover a wide range of vehicles, including dump trucks, hotshot trucks, box trucks, tow trucks, and many others.

Cost

NITIC provides a number of discounts on various trucking coverages. Customers can save significantly if they insure numerous fleets or combine various policies. The sole disadvantage of NITIC is that they do not offer online quotes. Customers can, however, readily contact an agent to acquire a personalized price quote based on the operating radius, driving history, and coverage level.

How Did We Select the Best Commercial Truck Insurance?

We examined the plans offered by ten different providers, including Progressive, Nationwide, The Hartford, Sentry, State Farm, GEICO, Berkshire, NITIC, Travelers, OOIDA, and Owner Operator Direct, to help you choose the best commercial truck insurance. So, we considered aspects such as the types of trucks covered, coverage alternatives, availability, and consumer feedback.

We also looked at whether these businesses specialized in a particular type of commercial truck insurance coverage, the types of discounts available, and how well they performed in terms of financial strength ratings.

What Is the Cost of Commercial Truck Insurance?

The cost of commercial truck insurance ranges from $2,000 to $18,000 per vehicle per year, depending on the type of truck and if owner-operators have a lease or their own authorization.

According to Progressive, the average commercial truck insurance policy costs between $642 per month for specialty truckers and up to $982 per month for transport truckers (about $7,500-$12,000 per year). However, for owner-operators who have a permanent lease with a motor carrier, the motor carrier will normally cover the primary insurance, requiring the owner-operator to spend less out of pocket. Owner-operators, on the other hand, are liable for all of their insurance for their trucks and drivers, which raises prices. The cost of supplementary coverage might range from $2,000 to $18,000 or more, depending on how much or how little is required.

Factors Influencing the Cost of Commercial Truck Insurance

The cost of commercial truck insurance is determined by a number of factors. Some can be modified by the business owner to lower the amount of coverage needed, while others are a necessary aspect of doing business and cannot be changed. The following are some of the most important factors influencing coverage:

#1. Vehicle Types Included

Because of the increased chance of inflicting severe damage in an accident, heavier vehicles often have higher insurance prices. Furthermore, because they would be more expensive to fix or replace in the event of an accident, newer automobiles are normally more expensive to insure. The more the number of vehicles in the fleet, the higher the cost of the truck insurance coverage.

#2. Operating Radius and Location

When drivers travel great distances (such as across a region or between states), their insurance costs are likely to be higher. Truckers with a greater operating radius are more likely to be involved in an accident since there may be fewer stops along the route or the route may be less familiar. Furthermore, different states have varied commercial truck insurance rates, so drivers in particular states will likely pay more.

#3. Vehicle Parking

The location of your trucks when they are not in use can have an impact on your insurance prices. The lower the insurance premium, the more secure the region. Commercial trucks parked in a garage or closed yard, for example, will pay cheaper rates than trucks parked in public areas or open lots.

#4. Cargo

Different types of cargo pose varying degrees of risk. Because heavier or more risky cargo is more likely to cause more damage in an accident than lighter cargo, the cost of the truck insurance coverage will reflect that risk. It should be noted that certain types of cargo, such as explosives, drugs, and livestock, are not covered by most commercial truck insurance policies and would necessitate supplementary coverage.

#5. Driving Record

Driving history, like personal vehicle insurance, has a big impact on how much a business owner pays in commercial truck insurance premiums. However, because the risks are higher with larger vehicles, a motorist with a history of violations or accidents will face a much larger increase in insurance prices. Maintaining a clean driving record, free of accidents and violations, is one of the best methods to save money on insurance. Business owners that manage a fleet of many drivers will want to carefully examine driving records throughout the hiring process, and they may also want to invest in additional driver safety training.

#6. Deductible and the coverage amount

Unsurprisingly, the higher the monthly cost, the more coverage is necessary. Choosing a greater deductible is one approach to reducing monthly premium costs. This approach, however, is not without financial hazards. A high deductible on your plan indicates that if an incident occurs, the employer will be responsible for paying more money out of pocket before the insurance policy kicks in.

How to Get Cheap Commercial Truck Insurance

Commercial truck insurance is critical and should not be overlooked. There are, however, methods to save money on insurance and discover cost-effective coverage that works. In fact, saving a few hundred or thousand dollars per month on insurance means more money for other aspects of the firm. The most common strategies to save money on commercial truck insurance are to look for discounts or to go for a policy with less coverage.

#1. Price Comparisons

Typically, a firm may get comparable coverage from numerous carriers, making obtaining quotes from multiple truck insurance companies a beneficial exercise. If your company merely needs minimal protection, most commercial truck insurance companies will be able to give it. While some make it easier than others, all insurance firms will present potential consumers with a price. If cost is an important factor, shop around and get price quotations from several companies.

#2. Discounts

  • Discount for Commercial Driver’s License (CDL)

For-hire truck drivers who have held a Commercial Driver’s License (CDL) for at least two years are eligible for a liability coverage reduction.

  • Discount for Business Experience

Owner-operators with more than three years in business are eligible for a business experience discount.

  • Savings from Previous Insurance Policies

Policyholders who have maintained continuous insurance coverage for the previous 12 months with select insurance providers may be eligible for a reduction on the next year’s insurance.

  • Discount for Full Payment

Some insurance firms will provide policyholders a discount if they pay their premiums in one single amount at the start of their coverage. Customers of Progressive, for example, can save up to 15% with this deal.

#3. Increased Deductibles

A high deductible coverage results in reduced monthly rates, but it also increases the risk of having to pay a large sum of money out of pocket in the event of an accident. If the drivers have a clean driving record, the cargo delivered is relatively low-risk, and the firm can handle the whole deductible in the case of an accident, business owners may want to seek a policy with a higher deductible.

#4. Reduced Coverage Limits

The policy limit influences the cost of commercial vehicle insurance. Monthly premiums will be reduced for policies with lower coverage limits. Instead of blindly selecting the highest insurance limit available, business owners should examine how much coverage they will truly require.

#5. Less Extensive Coverage

More coverage means higher monthly prices, whereas less coverage means lower monthly costs. For example, if a company has a large fleet of trucks, it may not require specific cargo insurance or rental reimbursement. Sticking to the basic minimum of state or federal regulations, with no extras, can also save money.

The Cheapest States for Commercial Truck Insurance

Though you are unlikely to relocate in quest of lower commercial truck insurance rates, it is worth noting which states offer the lowest commercial truck insurance rates. Quotes from different insurance providers may change, but according to Progressive’s average price statistics, the top ten states with the lowest commercial truck insurance rates for interstate motor truck cargo coverage are:

  • Mississippi
  • Wyoming
  • Nebraska
  • Iowa
  • Idaho
  • Dakota State
  • North Dakota (ND)
  • Wisconsin
  • Alaska
  • Montana

The top ten states with the lowest commercial vehicle insurance premiums for trucks utilized exclusively locally (inside state borders) are:

  • Mississippi
  • Wyoming
  • Massachusetts
  • Iowa
  • Arizona
  • Nebraska
  • North Dakota (ND)
  • Montana
  • Kansas
  • Dakota State

Conclusion

The best commercial truck insurance is determined by you and your individual business. Whether you have a single food truck, a fleet of tractor-trailers, or something in between, there are numerous reliable and highly rated carriers who can provide you with secure commercial truck coverage.

Progressive is worth considering if you’re seeking the best all-around commercial vehicle insurance. This provider provides coverage for many different types of trucks and industries across the United States, with varying discounts available. However, if you require specific policy features, another carrier may be better suited to your needs.

Insurance For Trucks FAQs

What kind of insurance do I need for a truck?

Primary Auto Liability

Why do trucks have cheaper insurance?

Insurance premiums are reduced as repair and replacement costs are reduced. Because pickup trucks are heavy-duty, they frequently cause less damage and injuries. Because of these features, claims are less expensive, resulting in cheaper insurance costs.

Is insurance for a truck more than a sports car?

Trucks, as one might think, cost more to insure than sedans. The monthly insurance cost difference between pickup trucks and autos is $102. Consider the Ford Fiesta if you’re seeking a cheap-cost car to insure.

References

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