​Owner-Operator Insurance Requirements Guide for Your Commercial Trucks

​Owner-Operator Insurance Requirements Guide for Your Commercial Trucks

Commercial truck owners and operators, including those insured by SoCal Truck Insurance, 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 Owner Operator Liability Insurance. We talk more about the specific insurance requirements imposed on cargo truck businesses.

Owner Operator Insurance Requirements for Leased Owner Operators

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

​Owner Operator Truck Insurance

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.

 Owner Operator Insurance Requirements

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.

​Owner Operator Cargo Insurance

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

​ Owner Operator Truck 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:

​Owner Operators Insurance

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.

​Owner Operator Liability Insurance

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 Cargo Insurance Requirements

​Owner Operator Truck Driver Insurance

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.

Insurance for Owner Operator

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 Semi Truck Insurance

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

Commercial 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!

Frequently Asked Questions:

What types of insurance coverage are required for owner-operators of commercial trucks?

Required trucking insurance coverage for owner-operators includes primary liability insurance, which covers bodily injury and property damage caused to others in an accident. Additionally, most states and the Federal Motor Carrier Safety Administration (FMCSA) require a minimum level of cargo insurance and general liability coverage to cover potential accidents and damage to cargo.

What additional insurance coverages should owner-operators consider?

Owner-operators should consider additional coverages such as physical damage insurance (collision, comprehensive, and fire & theft coverage), non-trucking liability (bobtail) insurance, motor truck cargo insurance, and occupational accident insurance. These coverages can help protect your investment, cover damages to your truck, and provide financial security in case of accidents, theft, or injuries.

How do I determine the appropriate amount of insurance coverage for my commercial truck?

The appropriate amount of coverage for your trucking business depends on factors such as the value of your truck, the cargo you transport, your operating radius, and the specific risks associated with your operations. Consult with an insurance agent experienced in commercial trucking to help you assess your risks and determine the coverage levels that best suit your needs.

How does the insurance underwriting process work for owner-operators?

The underwriting process involves an insurance company evaluating your risk profile, which includes factors such as your driving history, credit score, years of experience, and the type of cargo you haul. Based on this assessment, the insurer will determine your premium rates and coverage limits. Providing accurate information and maintaining a good driving record can help you secure better insurance rates.

Can I lower my insurance premiums as an owner-operator?

Yes, you can lower your insurance premiums by implementing safety measures, maintaining a clean driving record, choosing a higher deductible, and periodically reviewing your coverage to ensure you’re not over-insured. Additionally, participating in driver training programs and implementing a robust safety program can help demonstrate your commitment to safety, potentially resulting in lower premiums.

Learn about the average costs of semi truck insurance for owner-operators and gain a comprehensive understanding of the insurance requirements for your commercial trucks. Ensure you meet the necessary coverage standards and protect your business effectively by exploring our owner-operator insurance requirements guide today!