Safety is one of the major concerns for truckers. No matter how vigilant and cautious you are on the road, accidents will happen. You have no control over accidents as they are inevitable, but you can protect your business from various possibilities on the road with adequate commercial truck insurance.
However, this coverage is both essential and expensive. Since truck insurance is a major expenditure for any business, you need to understand some facts before purchasing it. You need to find the difference between what your operations actually need and what your current policy is offering.
If you fail to understand your trucking policy, you will either end up taking unnecessary coverage which will increase its cost, or signup for less which won’t pay off at the time of claim.
To choose the best coverage for trucking operations, there are a few things that truck drivers must know when purchasing insurance. You should first understand the major types of commercial truck insurance that exist to pick the most suited one for your business.
Commercial Truck Insurance: Meaning And Types Explained!
In a broader sense, commercial truck insurance is designed for transporting businesses and commercial truckers. The level of coverage depends on the type of business you own or the cargo you haul. You might need other add-on policies to cover all the liabilities and potential risks you face and get financial and legal support for the same.
Commercial truck insurance is a type of policy that protects large trucks such as semi-trucks, tow trucks, dump trucks, and small carriers used for money-making purposes including box trucks and hotshots. This insurance covers both tractor and trailer.
The following are the major types of commercial truck insurance that are available for truckers to protect their operations from potential hazards both on and off the road.
General Liability Coverage
This type of coverage protects you and your trucking company against claims that involve property damage and bodily injuries caused by your actions. General liability coverage basically covers third-party against physical injuries and property damages in an accident.
Physical Damage Coverage
This coverage protects your own truck against damages arising in the event of a collision, fire, explosion, vandalism, theft, or accident. Physical damage coverage offers both collision and comprehensive coverage to the insured.
Primary Liability Coverage
This coverage is law-mandated in most states which protects other people on the road. Primary liability coverage pays for bodily injuries and property damage caused to the third party in an accident.
Motor Truck Cargo Coverage
This coverage is essential for truckers who haul different types of shipments from one location to another. Motor truck cargo coverage protects the transported shipment or goods against damages or loss arising out of vandalism, fire, explosion, theft, or collision.
Non-Trucking Liability Coverage
This type of coverage protects the insured against arising hazards while operating the truck for non-commercial activities. Non-trucking liability coverage protects the likely dangers that can happen when the driver is off-dispatch, off the job, or when the vehicle is used for personal purposes.
This is another important coverage for truckers that help them reimburse hefty medical bills that arise after an incident. Medical payment coverage pays for the medical expenses of drivers and passengers in an accident, no matter who was at fault.
Uninsured/Underinsured Motorist Coverage
This coverage takes care of all the repair expenses that arise when another vehicle or auto (not having liability coverage) hits your truck. Uninsured/underinsured motorist coverage is a very helpful policy in hit-and-run cases.
08 Facts To Know Before Purchasing Truck Insurance
Whether you are working under your own authority or driving for a trucking company, taking the finest coverage is essential but not very easy. To obtain the best coverage for your operations, you need to know a few facts before putting your initials on the insurance document.
Here is the list of factors that you need to consider before buying truck insurance.
1. Stick To The Actual Need
The very first thing before purchasing truck insurance is to evaluate what level of coverage you actually need. You have to examine the type of truck you own. Based on its size, the amount of risk exposure, and the damage after an accident, you can take the coverage to protect the same.
Once you know your requirement, stick to it. This is because if you take more, you will end up increasing the cost of truck premiums whereas if you signup for less your policy won’t reimburse you for the expenses after an incident.
2. Reliable Insurance Provider
Due to high demand, the competition in the insurance market is ascending to a great level. There are countless insurance companies that claim to provide the best trucking coverage to the business. However, half of them either disappear overnight or shed tears when it comes to claim settlements. Out of many, only a few of them are capable of delivering what they advertise.
You need to pick a reliable insurance provider for your business. To do that, you have to thoroughly research the market and pull out the top companies that have a good reputation and track record of settling the claims on time. Shortlist brands according to your needs, approach them, and get quotes.
3. Lower The Price of Premiums
Yes, it is possible to lower your truck insurance premiums. To minimize your truck insurance rate, you need to work on certain areas of your operation. You can follow the below tips to minimize the cost of your truck insurance:
- Shop around: As already discussed, there are thousands of insurance providers in the market, and you need to pull out the best of them through detailed research. Whether you are renewing your insurance or buying it for the first time, you should compare the rates of your shortlisted insurers to pick the most suitable one. The rate of premiums varies from insurer to insurer, you need to prepare a list where you can save more money.
- Deductibles: Deductible in insurance is the amount or ratio you agree to pay to the insurer at the time of claim. The higher the deductible, the lower will be your insurance rate. Whereas, if you choose to pay less deductible the cost of truck insurance premium will be on the higher side.
- Driving records: You can lower your insurance rate if you maintain a good driving record. If your past driving record is date-stamped with traffic violations or you have been involved in accidents, you put insurer at the risk. When insurer realizes the amount of risk is higher, they tend to increase the rate of premiums. Whereas, if you keep your driving record clean, you become a less risky customer which decreases your truck insurance rate as well.
- Premium payment: If you choose a lump sum payment method for your insurance premiums rather than monthly deductions from your account, you can score discounts from your insurers.
- Credit score: In some states, your credit score does play a vital role in determining your insurance rates. Your credit score is a part of the risk assessment for your insurance provider. People with high credit scores get lower truck insurance rates and vice versa. You can improve your credit scores by paying all major bills on time and ensuring that your credit reports are accurate.
4. Know The Financial Strength Of The Insurer
Before buying coverage from an insurance company, you need to evaluate its financial strength. This is one of the most important things that you need to consider before finalizing an insurance partner. You need to check its financial condition or the capability to settle the claims.
First, jot down the name of the top five insurance companies that you have shortlisted. Now, check their track record of settling claims. You can also read the company reviews from their real customers and see if the company delivers what it promises. You can check it from independent agencies as well.
5. Read the Document Properly
We understand that reading the entire truck insurance document is not something that you would like. But, it is your trucking company that you have built with a lot of hard work and effort. So, signing the insurance policy without reading it is just not reasonable. A careful understanding of the truck policy gives you an idea of the ratio of deductibles, inclusions, exclusions, and much more.
If you skip reading these important terms and conditions, you might end up repenting at the time of claim settlement. It might happen that you wanted protection against some risks that were not part of your policy and you end up paying for the losses out of your wallet. You don’t want that right? So, before signing the truck insurance policy, make sure you read everything thoroughly.
6. Sign Up For Auto-Pay
Once you finalize the deal with your insurance company make sure you opt for the auto payment method. Why? There are two reasons for it. First, you are in a very busy business. You must be involved in several shipment transportation daily or weekly. So, you might skip paying the premiums for a month or two. Forgetting the payment of premiums will add up a percentage of the penalty in the next month’s premium. So, the first reason for opting auto-payment method is to avoid late payments.
The second reason for automating your premium payments is you will improve your credit score. Once you activate auto-pay, you maintain timely payments of yearly or monthly premiums. This improves your credit score which is again good for securing low-cost truck insurance at the time of renewal.
7. Work On The Neatness Aspect
You should not only look good on paper but also your truck’s appearance plays a vital role in securing the right insurance deal. Poorly maintained driving files, score reports, maintenance files, etc. might not leave a good impression on the insurer. Plus, old tires, greasy floors, a smelling garage, or messy equipment on your premise during a physical inspection won’t go well on your insurance rates.
All these show a lack of cleanliness, organization, and no attention to maintaining proper order on your property. This will display that you don’t consider safe operations. A bad impression of safety inspectors can increase your policy rate. So, make sure you work on the neatness aspect as well.
8. Research The Insurance Marketplace
The cost of your truck insurance is not only based on the risk factors but also fixed according to the going rate in the marketplace. Even with good credit scores, lower risks, and decent driving records, you might have to accept the costly insurance policy if the rate is high in the insurance market. To get an idea of current trends, you need to gauge the insurance marketplace to understand the amount of rate at which premiums are offered.
Having the knowledge of the current insurance market rate will put you in a negotiable position. Research well on this part to get the best value on your trucking insurance. If you don’t know what is going on in the market, you won’t be able to get the best deal as you will not be in a position to negotiate well with the insurer.
You already realize the importance of shielding your trucking business from various risks on and off the road. Buying adequate commercial truck insurance is a basic step to protect your operations. But purchasing the right type of coverage is a difficult task for any trucker. All the aforementioned pointers will help you pick the right policy for your business.
Truck insurance is necessary but also very expensive. There is no use of a policy that doesn’t reimburses for the losses suffered in an incident. So, make sure you are paying for the right coverage that will offer the best financial cushion whenever you need it.
Whenever you go on a truck insurance hunt, make sure you consider all these points to get the best coverage for your operations.