What Kind of Trucking Insurance Is Required by Law?

Truckers operate under stringent regulations, and having the right insurance goes beyond protecting assets. The law mandates that all trucking operations carry specific types of insurance to legally run their business and safeguard against potential liabilities. Without the required insurance, trucking companies risk hefty fines and business shutdowns.

There are several types of insurance policies that truckers need to consider. Primary liability insurance, for example, is essential and federally required for all trucking companies. It covers damages or injuries to others resulting from truck accidents. Also, cargo insurance is needed to protect the goods being transported, ensuring financial recovery in case of loss or damage.

Secondary to these, various forms of specialized trucking insurance exist to address different risks. These can include physical damage insurance for trucks and additional coverages like environmental liability insurance. Each type plays a crucial role in maintaining a robust protection plan for truckers on the road.

Mandatory Trucking Insurance Coverage by Law

Trucking insurance is governed by various legal requirements to ensure safety and financial responsibility on the road. Key components include primary liability insurance, cargo coverage, and non-trucking insurance liability protection.

Primary Liability Insurance

Primary liability insurance is essential for all commercial truck operations. It covers bodily injury and property damage caused by the truck in an accident. The minimum coverage amounts vary by state but typically range from $750,000 to $1,000,000. This insurance is required to secure operating authority from the Federal Motor Carrier Safety Administration (FMCSA).

Primary liability insurance also ensures compliance with federal regulations and protects other road users. Insurance providers often require specific endorsements, such as MCS-90, which certifies financial responsibility. Obtaining this insurance is non-negotiable for any commercial trucking business.

Cargo Insurance Requirements

Cargo insurance is designed to protect the goods transported by trucks. It is not federally mandated but is often required by clients and brokers. Coverage amounts depend on the type and value of the cargo. For high-value items, higher coverage limits are necessary.

Cargo insurance covers losses from theft, damage, or other perils during transit. Policies may also include provisions for specific types of cargo like hazardous materials. Some states have their own regulations, requiring specific coverage levels or additional protections. This insurance enhances a company’s reliability and customer trust.

Non-Trucking Liability Insurance

Non-trucking liability insurance, sometimes called bobtail insurance, covers a truck when it is not under dispatch. This insurance is crucial for owner-operators as it extends protection during personal or non-business use. It generally provides coverage for accidents occurring when the truck is not hauling a load.

Non-trucking liability does not cover incidents during commercial use or when operating under a lease agreement. Unlike primary liability insurance, it is more flexible and can be tailored to the driver’s specific needs. Insurance companies may include various optional endorsements to address individual circumstances, enhancing the policy’s comprehensiveness.

This insurance adds an extra layer of protection, ensuring coverage in various situations.

Additional Insurance Considerations for Truckers

When evaluating insurance options, truckers should take into account coverages that protect their equipment and themselves.

Physical Damage Coverage

Physical Damage Coverage is crucial for truckers to safeguard their vehicles. This type of insurance typically includes both collision and comprehensive coverage.

Collision coverage pays for damages resulting from accidents, such as crashes or rollovers. Comprehensive coverage addresses non-collision-related damages like fire, theft, vandalism, or natural disasters.

Both coverages ensure that truckers can repair or replace their vehicles without bearing the full financial burden. It’s important to remember that these policies usually involve deductibles, which are the amounts paid out of pocket before the insurance kicks in. Truckers should select deductibles that balance cost and risk.

Uninsured Motorist Coverage

Uninsured Motorist Coverage protects truckers from incidents involving drivers who lack sufficient insurance.

If an uninsured or underinsured driver causes an accident, this coverage compensates for medical expenses, lost wages, and other related costs. It is especially vital since not all drivers comply with mandatory insurance laws, leaving truckers vulnerable.

This coverage ensures that truckers can still receive compensation for damages to their vehicle and personal injuries without lengthy legal battles. It plays a significant role in maintaining financial stability for truckers following such unforeseeable events.