A First-Time Owner-Operator's Guide To Truck Insurance

Getting started as an owner-operator is a big decision. No matter how much experience you have behind the wheel, starting your own business is an entirely new adventure. Simply choosing and buying a truck is no easy feat, but it's far from the last difficult decision that you'll need to make. Once you have your rig, making sure that it's adequately insured is the next step on your journey. Although commercial insurance is similar to personal auto insurance, it has its own set of unique features and pitfalls. This guide will help to give you the basic knowledge you need to make the right decisions when insuring your rig.

Primary Liability Coverage: It's the Law

The state that you live in sets the requirements for your personal automotive insurance, but the Federal Motor Carrier Safety Administration (FMCSA) regulates primary liability insurance for truckers. Primary liability coverage works in the same way as liability coverage for non-commercial vehicles. This type of coverage provides medical and property damage payments in the event of an accident that you cause. The federally mandated minimums for liability coverage range from $750,000 up to $5,000,000, depending on the specific loads you will be hauling.

As with traditional liability insurance, primary liability does nothing to protect you or your truck. This insurance coverage exists solely to protect those that are harmed (physically or monetarily) through your actions. Because the potential for semi-trucks to cause damage is so high, holding this type of insurance is a vital part of operating a truck safely and responsibly.

Protecting Yourself

Of course, it's also crucial that your insurance provides coverage for both you and your truck. Your truck is your business' most valuable asset, and an uncovered loss can be devastating. As with any other vehicle, your insurance company provides this type of coverage through collision, comprehensive, and medical policies. Although you are not required by law to carry these types of coverage, it always makes sense to do so. As a general rule, you should aim to take out the highest coverage and lowest deductible that you can afford.

Protecting Your Business

In addition to protecting others and protecting your truck, there's an additional wrinkle that comes with being an owner-operator. As a business owner,  you also need to cover your liability for business activities that occur outside of your truck. General liability coverage provides this protection. Unlike primary liability coverage, general liability coverage protects you in a variety of situations outside of the driver's seat. General liability covers everything, from injuries or damage that may occur while unloading your truck, to slips and falls on business property. While not required by law, general liability insurance is almost always a good idea.

Getting the Right Coverage for Your Business

Understanding how commercial insurance works is a good start, but getting the best coverage possible usually involves working with a broker. Once you've found a trustworthy broker to help get you set up, you can work with them by describing the exact level of coverage that you want along with your budget. By having a good understanding of the types of coverage available to you, you can help your broker to develop a policy package that will be a perfect fit for your trucking business.