Commercial truck insurance: what is it and what does it cover?
By Leana Schwartz, Independent Commercial Insurance Agent
Commercial truck insurance is tailored based on the business type and duties, potential risks, number of trucks in the fleet, and whether trucks are driven across state lines. A knowledgeable and experienced independent insurance agent will ensure that a business obtains the best possible coverage for its unique needs.
What vehicles does commercial truck insurance cover?
Commercial truck insurance covers several types of larger vehicles such as:
- Tractor-trailers (“eighteen-wheelers”)
- Garbage trucks
- Car haulers and automobile trailers
- Dump trucks
- Tow trucks
- Flatbed trucks
- Box trucks
- Tank trucks
The type of trucks, the amount of time and distance they are driven, and what they transport all play a role in determining the best type of insurance, coverage, the costs of premiums, and deductibles.
Types of commercial truck insurance
There are four main types of commercial truck insurance:
- Liability insurance is coverage mandated by California law, which that pays for any damages caused by the truck and driver. This insurance includes medical expenses, property damage, and legal defense, if necessary.
- Motor truck cargo insurance is optional but highly recommended coverage that protects the load which is being transported in the event of theft or damage.
- Physical damage coverage is also optional but covers the truck against damage from incidents other than collisions — such fires, floods, theft, and vandalism. This type of insurance is similar to comprehensive coverage for passenger vehicles.
- Uninsured/underinsured motorist coverage covers the cost of vehicle damage and/or injuries suffered by a truck driver which are caused by another motorist who has inadequate insurance coverage for the loss.
Several other types of commercial truck insurance are also available to address specific concerns.
Obtaining commercial truck insurance quotes
An independent insurance agent can provide side-by-side comparisons of different insurance companies for clients based on business needs. To obtain an accurate quote, the insurance agent needs to know:
- Who will be driving the trucks.
- Where the trucks will be driven.
- Employees’ driving records.
- Any specialized driver certifications/training.
- The nature of the loads being transported, especially heavy equipment or potentially hazardous materials.
- The number of miles driven annually.
- Whether trucks will travel out of state.
Money-saving tips for commercial truck insurance
Insurance can be costly, but it is a necessity. To reduce premium costs, experts recommend:
- Increasing deductible amounts.
- Paying insurance annually instead of making monthly payments.
- Insuring all vehicles with the same company for bulk discounts.
- Creating a written maintenance plan to demonstrate seriousness about vehicle care and upkeep.
- Removing comprehensive coverage from older vehicles.
Commercial trucking terminology
Insurance that protects a tractor that is operated without towing a trailer, either for commercial or personal use. This is also known as deadhead coverage.
This coverage insures the driver of a commercial vehicle when the vehicle is being driven for non-commercial purposes.
Documentation filed with either state or federal insurance governing bodies demonstrating that a commercial vehicle carries the mandatory minimum amount of liability insurance. Filings are typically required for vehicles that exceed a certain gross vehicle weight (GVW), carry hazardous materials, and/or transport passengers commercially.
Gross vehicle weight (GVW)
The weight of a fully loaded vehicle; comprised of the vehicle itself, plus the maximum load it is rated to carry.
Interstate and intrastate trucking
Interstate trucking occurs across state lines; intrastate trucking operations do not cross a state line during normal operations. Interstate trucking usually requires a filing.
A party who leases a tractor and/or trailer from another party for the purpose of transporting goods.
On-hook towing coverage
A type of physical damage coverage for vehicles that are being towed commercially.
An owner-operator is a company (or person) which owns its own vehicles and transports its own goods.
Permanently attached equipment (PAE)
As the term implies, PAE is anything permanently attached to a truck that is used for normal operations in the insured’s line of business. PAE must typically be welded and/or bolted to the vehicle to be considered permanently attached.
A placard is a sign on a commercial vehicle providing notification of the goods being transported. Placards are mandatory for loads that are potentially dangerous such as flammable liquids and gases or other hazardous materials.
Radius of operation
The distance a commercial vehicle travels from its principal garaged address that is used to calculate premium costs.
Trailer interchange insurance
This type of coverage protects someone who is driving another party’s trailer under a trailer interchange contract, in the event the trailer is damaged in an accident.