Any company or individual who owns a truck for commercial purposes must have insurance that covers commercial trucking. This can impact a company’s financial situation. An average annual cost of a primary liability trucking policy in Chicago with interchange and cargo coverage is $8,000 A person can choose to find an insurance company that won’t charge too much. Although it is possible to find a trucking company that charges less than the others, this does not mean they are providing good service.
Truck drivers work under stricter rules and regulations than normal drivers. Freight truck drivers often have to drive with a keen eye because they are transporting cargo, which can prove quite dangerous. Truck drivers know it is a nightmare to cause an accident and not have the proper insurance. It can negatively affect their career as well as cause damage to the public.
When looking for quality insurance, one of the first things anyone should do is shop. It is not a good idea to look for an agent before you have all the information. This information will help someone decide on the type of package they should settle for. The trucking industry is constantly evolving. There are many new companies entering and leaving the market. There will be a better deal for you, and new companies that are eager to get a slice of the lucrative trucking industry insurance premiums. It is important to understand the total cost of the insurance package as well as its average cost. You can only find this information by doing extensive research prior to your purchase.
Before you shop for an insurance company, there are many things to consider. It is important to determine what type of insurance you need. The following coverages may be applicable to most trucking policies:
1. Primary Liability Insurance. The primary liability of most truckers is $750,000 to $1,000,000 for bodily injuries and property damages. FHWA (Federal Highway Administration), mandates that truckers who cross state border are covered by limits based on what materials they haul. For example, truckers hauling hazardous materials or HAZMAT trucks must have at least $1,000,000 in auto liability.
2. Cargo Coverage. Like primary auto liability truckers must file state and federal paperwork to maintain certain cargo (coverage of the merchandise being hauled). The majority of truckers have cargo limits between $100,000 and $250,000, but they may carry significantly less (e.g $15,000).
3. Trailer Interchange insurance. Truckers may need to purchase trailer damage coverage. The limit can cover trailers belonging to others while the insured trucker is using them, as well as the trailer owned by the insured driver while it’s being used by other trucks.
4, Damage to Truck/Tractor/Own Trailer. This applies to your truck/tractor/trailer.
5. General Liability: This covers the truck and the business.
6. Workers Compensation. Covers employees/ drivers for medical payment & disability income for any work related injury or disease.
7. Occupational Accidents. Limited medical coverage and income benefits for work-related injuries.
8. Umbrella Coverage. This extra coverage provides additional liability coverage above and beyond what is underlined by General Liability, Auto Liability, and Workers Compensation.
9. Hired and non-owned auto: Covers autos hired by an insured.
10. Towing and rental: Towing covers the cost of towing a disabled truck in an accident or theft. In the event that the truck becomes disabled due to a covered loss, rental coverage will pay a small amount to rent a similar truck.
Once all of the information is covered, it’s now much easier to find the right agent/ company. Next is to search for insurance quotes on the market. You can do this easily online by visiting different websites that provide the service. There are many trucking insurance companies that offer online services. This will allow you to find the best one for you.
You can fill out the forms provided by potential insurers to receive a quote. In the end, you will receive multiple quotations from various companies/ brokers. This makes it easier for people to choose the right option. There are many other factors that can influence your final decision.
Once they have all the quotes that they require, they can do a thorough analysis of each one. You should not choose a quote because it is cheap. The best quote will offer the coverage you require for the money. You will always find a reason an agent is offering lower quotes than others. Find out the reason and decide if you want to continue working with them. Compare quotes with similar fees in relation to the coverage offered. These are the main factors that impact the premium:
1. Garaging Address: Some companies consider the ZIP Code when pricing your policy. Other companies might look at the County. It is important to distinguish between your mailing address, and the garaging location. This is an important issue in Chicago where the ZIP codes are 606xx. Truckers who are located in the city, but park their trucks in suburbs, may find themselves charged extra by companies that use ZIP codes for rating. (Progressive Insurance an example of such a company.)
2. Credit of the Applicant. Trucking companies may be credit-driven. Higher credit scores will get you a better price. Progressive Insurance is an example.
3. CDL Experience/ Operator age: Many companies won’t consider you if less than two years of CDL driving experience (Example: Canal Insurance), but other companies may penalize you if you don’t have enough experience or your MVR is blemished. Although most companies will not cover drivers younger than 21, some do charge a surcharge to drivers who are under 25.
4. You can get discounts on your previous insurance if you have proof of it. Example: Progressive Insurance.
5. You can limit your insurance to your primary liability, cargo, and trailer interchange. You pay more for coverage that you request.
6. Radius of Operations: There is no set of rules. Some companies will prefer local truckers with a shorter range (upto 300 miles), while others may penalize local truckers, especially if they are located in major metropolitan areas such as Chicago or New York. Progressive Insurance doesn’t allow more than 500 miles to be covered, but they may allow it on a restricted basis. Canal and other companies may offer better rates for long-range operations.
7. Merchandise Hauled. You can insure more merchandise than others (electronics, high-end clothes), such as paper products or regular household goods. Insure plastic products more than refrigerators.
If this is your first truck being insured, riders should be included in the coverage. This option is available at a higher price than regular coverage. The annual payment to the insurance company is typically cheaper because of certain discounts that are offered when payments are made in bulk. You should inquire about this option before you commit to any commercial trucking insurance.
