​Owner-Operator Insurance Requirements Guide for Your Commercial Trucks

​Owner-Operator Insurance Requirements Guide for Your Commercial Trucks

Commercial truck owners and operators are subject to interstate and federal laws. Having cheap truck Insurance coverage is, of course, part of the provisions.

For one, the Federal Motor Carrier Safety Administration (FMCSA) requires that commercial truck drivers be covered by accident insurance. We talk more about the specific insurance requirements imposed on cargo truck businesses.

Minimum Insurance Coverage Requirements

In general, the heavier the vehicle and the more dangerous the cargo being shipped is, the higher the insurance requirements are.

This is in line with Title 49, Section 387 of the US Code of Federal Regulations (CFR), which itemizes the amount of coverage required for a commercial truck based on the truck weight and cargo type.

The current minimum financial responsibility cargo companies are:

  • $5,000 per vehicle cargo liability for household goods
  • $10,000 per aggregate liability to above mentioned
  • $300,000 for non-hazardous cargo in vehicles under 10,001 pounds
  • $750,000 for non-hazardous cargo in vehicles 10,001 pounds and above
  • $1 million for oil being transported by for-hire and private freight vehicles
  • $5 million for other hazardous materials or explosives being transported by cargo tanks, portable tanks, or hopper-type vehicles with capacities in excess of 3,500 water gallons

​State Laws and Interstate Federal Law on Commercial Truck Insurance Coverage

Commercial trucks that transport cargo within state lines are subject to insurance coverage minimums under state law. On the other hand, those that transport between states are subject to federal law.

In California, the minimum insurance coverage requirement for in-state commercial trucks is the same as the federal guidelines presented above.

The evaluation is based on the type of cargo and vehicle weight. But household goods carriers require $20,000 per vehicle and $20,000 per incident coverage.

Cargo Truck Insurance Filing in California

A cargo truck in California is required to have a California intrastate ID number and a Motor Carrier Permit MCP), and must submit an MCP-65 filing, also known as the certificate of insurance, to confirm that it has the required level of liability insurance.

Household goods carriers also need to submit a TL676 filing. It guarantees sufficient cargo insurance and liability insurance.

​How Much Does Commercial Truck Driver Insurance Cost?

Truck driver insurance ranges from $1,500 to $2,000 a year. It is set by the risk factor posed to the vehicle, which is determined by:

  • Driver’s age
  • Driving experience and record
  • Credit score
  • Area of operation which is the transport route or driving radius
  • Motor Vehicle Records (MVR) reports
  • Truck model or price, where newer models with upgraded features cost more than older models
  • Insurance coverage for vehicle
  • Payment plan

​What Factors Affect the Price of Commercial Truck Owner Operator Insurance?

The cost for owner operator insurance is set between $8,000 and $12,500 a year. The actual value is determined by the following factors:

​Driving Record

The more experience you have driving trucks, the lower the rates are. How safe your driving is can also affect the rate.

​Credit Score and Credit History

A high credit score helps reduce truck insurance costs.

​Truck Model

A new truck model will demand a higher insurance coverage rate than an older one. The brand, year of production, and features also affect the price.

The level of completeness—as in having fog lamps, warning signs, or deer guards—also affects the cost. These safety features can help reduce commercial truck insurance costs.

​Owner Operator Insurance Requirements

​Private Owner-Operators

Private truck owners and operators cover their own insurance policies. The basic ones required by the law are:

  • Liability Insurance – covers the body and property damages caused by the truck driver or vehicle to others
  • Physical Damage Coverage – covers the cost of repair if the vehicle gets into an accident on the road
  • Motor Truck Cargo Insurance – offers coverage for damaged or lost cargo
  • Motor Truck General Liability Insurance – covers property damage or injury resulting from non-truck related business operation

Owner-Operators Leasing to a Motor Carrier

A motor carrier typically covers the basic liability insurance of owner-operators. It covers property damages and accident injuries.

At times, if the business is financially capable, the motor carrier also covers the following:

  • Physical Damage – covers the cost of replacing or fixing the owner operator’s truck if stolen or gets into an accident
  • Non-Trucking Liability – offers protection for when the owner-operator uses the truck for non-work related transport
  • Trailer Interchange – covers the damages for non-owned trailers pulled under a trailer interchange agreement

The above-mentioned types of commercial truck insurance can also be availed by owner-operators independently if the agreement with the motor carrier does not include them.

Can a Trucking Business Be Self-insured?

The answer is yes. However, in self-insuring a trucking company, the owner takes on all of the risks, claims, and administrative tasks involved in protecting the business. This is opposed to availing traditional insurance in which a third-party provider assumes financial responsibility.

Covering insurance claims filed by employees is subject to the Health Insurance Portability and Accountability Act (HIPAA). It ensures to protect medical and personal data collected from employees for the purpose of making insurance claims.

In general, self-insurance is not the best choice for small trucking businesses. This is because it demands a huge amount of money and the burden of payment is usually felt by the employer or employee.

In a self-insured setup, the employer pays for the coverage based on the structured plan, or a portion is deducted from the employee’s monthly salary.

​Owner Operator Commercial Truck Insurance in California

Insurance coverage for your business is an investment that will protect your operation from potential troubles, so partner with a trusted provider.

SoCal Truck Insurance in California offers coverage for owners and operators. We have a network of clients and partners in the trucking, car dealing and rental, hotel, and body shops industries.

We’ve been around for over 20 years, serving clients in the region with commercial truck insurance, California businesses can count on.

Let us help you protect your trucks and business with quality and cheap truck insurance. For a free quote, our agents are available to chat 24/7. Contact us at SoCal Truck Insurance today!