Commercial truck insurance for new carriers
Insurance is usually the largest bill a new trucking company pays, and it is the one that can shut you down if it lapses. Here is what the federal rules require, what brokers will ask for, and how to plan for it.
What the federal rules require
A for-hire carrier hauling general (non-hazardous) freight in a vehicle of 10,001 pounds or more must carry at least $750,000 in public liability coverage for bodily injury and property damage (FMCSA insurance filing requirements; 49 CFR 387.9).
You do not file this yourself. Your insurance company files proof with FMCSA on form BMC-91 or BMC-91X. If the filing is not in within 20 days after your application is published in the FMCSA Register, FMCSA moves to dismiss the application unless you comply within 60 more days (FMCSA). Get your quote before you apply for authority, so the filing goes in on time.
The federal chart sets no cargo minimum for general freight carriers. That does not mean you can skip cargo coverage. Brokers and shippers set their own requirements, and most will not load you without it.
Coverage a new carrier usually carries
Ask your agent about each one. Not every carrier needs all six.
Primary auto liability
The coverage FMCSA requires. It pays for injury and damage you cause to others. Many brokers and shippers ask for more than the federal minimum.
Motor truck cargo
Covers the freight you haul. Reefer carriers should ask about coverage for spoilage from a reefer unit breakdown, which standard policies may exclude.
Physical damage
Covers your own truck and trailer. Your lender will require it if the truck is financed.
Non-trucking liability
For owner-operators leased on to another carrier. It covers you when you are driving the truck but not under dispatch.
General liability
Covers claims that are not about driving, such as damage at a customer's dock. Some shippers ask for it.
Occupational accident or workers' comp
Covers injury to you or your drivers. Which one you need depends on your state and how your drivers are employed.
Hazmat and higher limits
Carriers of certain hazardous materials must carry at least $1,000,000, and carriers of certain bulk hazardous materials, explosives, poison gas or radioactive materials at least $5,000,000 (FMCSA). Hazmat also brings its own permits, training and placarding rules. Read hazmat freight movement regulations before you quote it.
Some large fleets qualify as self-insured with FMCSA approval. That is not a path for a new carrier, but what it means to be self-insured explains how it works.
- General freight: $750,000
- Certain hazardous materials: $1,000,000
- Certain bulk hazmat, explosives, poison gas, radioactive: $5,000,000
Why new authority costs more, and what you can control
Insurers price risk from history. A new authority has none, so the first year usually costs the most. You cannot change that, but you can control what the insurer sees:
- The driver. Experience and a clean driving record count more than anything else on a new authority.
- Your files. Complete driver qualification files, a working drug and alcohol program and an ELD show an underwriter you run a real safety operation.
- The truck and the lanes. Where the truck is garaged, how far it runs and what it hauls all change the price.
- Your safety record. Inspections and violations follow your USDOT number. A clean first year is the best way to lower the second year's premium.
Our rule for the carriers we work with: start the renewal ninety days out, and look at your safety scores before the insurer does.
Insurance planning with education behind it
Insurance is one part of building your company the right way. With LFS, your company is built through development, with Freight University's education behind every part of it: authority, insurance, compliance and freight research. How we work.
- Every part of the company planned together
- Compliance and insurance lined up
- A team behind your new company
Insurance is a cash-flow problem first
When a carrier loses insurance, the authority goes with it, and that record stays public. In our experience it is almost never because the owner chose not to pay. The premium went unpaid because the carrier was not getting paid. Fast billing and steady collection keep the policy alive. That is what our back office services are for.
Questions and answers
How much is truck insurance for a new authority?
It varies too much by driver, state, equipment and freight to give a fair number here. Get two or three quotes before you apply for authority, and build the down payment into your startup cash, not your first month's revenue.
Is cargo insurance required by FMCSA?
The federal chart sets no cargo minimum for general freight carriers (FMCSA). Household goods carriers are the exception. Brokers and shippers almost always require cargo coverage, so plan on carrying it.
What happens if my insurance lapses?
Your insurer notifies FMCSA, and your operating authority is revoked if the coverage is not replaced. Getting it back means new insurance on file, a reinstatement request and a fee, and the truck sits while you wait.
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Planning your insurance?
Tell us what you plan to haul and where. We will help you understand what coverage to ask for and how it fits your startup budget.
Prefer the phone? Call 901-205-9679.