Commercial Truck Insurance - What You Need to Know

Whether you utilize medium-duty trucks to make regional runs, cube vans for local deliveries, or tractor-trailers to deliver freight cross-country, insurance companies need to know certain basics to give you their best coverage options. The information listed below will help you obtain accurate, competitive commercial truck insurance quotes that will allow you to protect and sustain your business.

Driver Information

• List of each driver's training or certifications
• Will they be in hard-hat areas or construction sites?
• List of all driver's license numbers and date of birth

Vehicle Information

• Each vehicle's current value
• Each vehicle's radius of operation
• Estimated annual mileage for each vehicle

List of Vehicles, Including Type and Vehicle Identification Numbers (VIN):

• Tow trucks
• Box trucks
• Dump trucks
• Tank trucks
• Garbage trucks
• Flatbed trucks
• Semis (tractor-trailers)
• Car haulers/auto trailers

Operation Information

• Do you cross state boundaries?
• How many miles are driven each year?
• IFTA mileage reports for past 3 years.
• Do you haul heavy equipment or hazardous materials?

General Business Information

• If applying for Business Owner Policy (BOP), you'll need to know your estimated annual receipts.
• Information about any insurance claims for the past 3 years.

Before purchasing insurance, it will help to determine your risk tolerance for both your liability protection and business interruption. Let's face it. Accidents happen. According to the Department of Transportation (USDOT), the National Center for Statistics and Analysis (NCSA), and the National Highway Traffic Safety Administration (NHTSA), about 75 percent of commercial truck accidents are caused by drivers of other smaller passenger vehicles rather than the truck driver. So, even though you and your drivers may be extremely safety conscious and do everything right, one misstep by another driver can wreak havoc on your business. That's why insurance is so necessary. You need to protect your investment. You may find the following statistics of different types of U.S. truck accidents (compiled by USDOT, NCSA, and NHTSA) enlightening and perhaps helpful when considering your insurance needs.

Commercial Truck Accident Statistics

• The average cost of a commercial truck accident is about $59,150.
• Driver fatigue is responsible for roughly 30 percent of all commercial truck accidents.
• Nearly 90 percent of commercial truck accidents are caused or worsened by some sort of human error-either on behalf of a truck driver, other drivers, other vehicle passengers, cyclists or pedestrians.

Semi and Heavy Truck Accident Statistics

• About 98 percent of all semi-accidents result in at least one fatality.
• Of the 15.5 million trucks in the U.S., nearly 13 percent are semis and tractor-trailers.
• For every 100 million miles driven on U.S. roadways, there are 2.3 deaths and 60.5 injuries caused by big rigs.
• Fatal tractor-trailer accidents cost Americans more than $20 billion each year, $13.1 billion of which is the cost associated with loss of quality of life.

Overall Truck Accident Injury Statistics

• 70% of truck accidents report only property damage.
• About 22 percent of all truck accidents result in injuries.
• About 130,000 individuals are injured each year in truck collisions.

Insurance, like most industries has a language all its own. Understanding your policy and insurance quotes can help you save money and buy peace of mind. Policies include different types and levels of coverage. We hope the following explanation of some of the more common terms related to commercial truck insurance can help you better understand what each type of insurance covers and determine the coverage that's right for you.

Commercial Truck Liability Insurance (CTL) Or Primary Liability Insurance (PLI)

CTL covers your risk of liability arising from the maintenance, ownership, or use of any insured vehicle. in the event that you or another of your drivers is involved in an accident. CTL generally includes bodily injury liability, which will cover the costs of medical expenses and injuries and property damage liability to cover the costs of property damage caused by the accident. CTL will usually also cover the costs of legal defense, whether or not your company is found to be at fault.

Physical Damage Insurance (PDI)

PDI covers the costs of damage to your insured commercial truck or trailer caused by an accident with another vehicle, collision with another object, or overturn. This coverage typically includes collision coverage to pay for damage to your vehicle, in addition to Comprehensive coverage, which will pay for damage or loss other than that caused by an accident, such as hail, lightning, theft, vandalism, wind, and other causes. The policy will contain the specifics of this coverage.

Non-Trucking Liability Insurance (NTL)

NTL covers the personal and non-economic use of a commercial truck, for personal convenience outside of your motor carrier's direction. For example, if you give an employee permission to use a truck when moving, or any other purpose outside of any revenue-generating purpose. NTL does not apply when a driver or vehicle is used for any revenue-generating purpose.

Bobtail Insurance can also be part of your NTI policy. This will keep your vehicle covered when it is not pulling a trailer or under dispatch and should be an integral part of your overall insurance plan. Generally, the additional protection offered by these policies is relatively inexpensive.

NTL typically covers property damage liability, bodily injury liability, medical payments, and uninsured/underinsured motorists.

Uninsured/Underinsurance Motorists Insurance (UMI)

UMI typically covers the cost of damages or injuries should you or your drivers are involved in an accident when another driver is at fault, however the other driver does not have insurance or does not have adequate insurance coverage to pay for the damages to your property or the resulting injuries.

Cargo Insurance

Cargo Insurance covers losses arising from damage or theft to freight while in transit. Cargo insurance typically covers theft or damage caused by extreme weather, product spoilage, or other damage to freight your truck is hauling.

Guaranteed Asset Protection (GAP) Insurance

GAP is a two-party agreement between the customer and the lender to waive either a portion or all of the debt remaining on your finance contract after the total loss of vehicle collateral once all insurance settlements are paid. A GAP plan will take care of the negative balance between your primary insurer and the balance owing on your loan. This gap is all too often a result of high vehicle depreciation in the first years of ownership and minimal down payment.

The lack of equity in the vehicle purchase and the length of extended vehicle term financing create a negative vehicle equity position. Since buyers are generally focused on monthly payments, in most cases, they are exposed to thousands of dollars between the insured value of their vehicle and their outstanding loan balance in the event of a total loss. Without GAP coverage, you will need to cover the deficiency between the insured amount and the loan balance as well as a down payment on a new vehicle, insurance deductible, license and registration fees, sales tax, and even vehicle price increases. All can be significant hits!

Business Owner's Policy (BOP)

BOP Insurance is a package policy consisting of business liability insurance and property insurance. Coverage generally includes business interruption, property damage, and business liability. Typically, business owners can save money when purchasing these coverages as a package over purchasing each policy separately.

In addition to these, there are other options available that will allow you to customize your policy to protect both your personal and business assets from catastrophic loss.