Insurance companies use many rating factors to calculate a trucker’s insurance cost, and each can have a big influence on their premium. It’s not uncommon for one trucker to pay $8,500 annually, and another to pay $14,000 annually depending on how certain factors affect their rate. So, what are they?
Seven primary rating factors that can influence your truck insurance cost:
1. USDOT authority
Leasing to a company is much cheaper than running under your own authority because leasing companies typically cover their drivers’ primary liability exposure while their drivers are under dispatch. These drivers often need to carry non-truck or bobtail coverage to fill the gaps, but it’s less expensive than the primary liability.
Also, your USDOT operating history can be a factor if you’re working under your own authority. Any violation could put you at risk for a higher rate.
2. Contractual requirements
The FMCSA generally mandates a minimum liability limit of $750,000 CSL or $1,000,000 CSL for truckers who need a federal filing. This is much higher than most state minimum limits, meaning those drivers can expect to pay more.
Did you know?
CSL stands for combined single limit. It’s the maximum amount your insurance company will pay for the combination of bodily injury and property damage per incident.
Learn more about liability insurance and how it protects you if you’re at fault for an accident.
Commercial truck insurance costs are greatly affected by the type of cargo you haul. Some cargo is just riskier to transport than others. For example, an accident involving a truck transporting heavy farm equipment will likely cause more injury or damage than a truck carrying fresh produce.
When getting a quote, it’s very important to accurately and completely disclose the types of cargo you’ll be transporting to minimize the risk of having a claim denied.
4. Operating radius
Truckers with a large operating radius typically have an increased risk due to longer drive times between stops and more route options. A semi-truck driver who travels regionally will usually pay more than a driver whose routes are local.
5. Vehicle type
A large semi will generally have a higher commercial truck insurance cost than a smaller pickup truck carrying the same type of product because of its potential to cause more damage in an accident.
It’s also typical for newer vehicles to be rated higher because they’re costlier to repair or replace than older vehicles.
6. Driving history
Accidents and violations have a higher impact on a commercial truck policy than your typical auto policy because large, heavy vehicles transporting bulk levels of cargo can cause a lot more damage. A minor speeding ticket on a trucker’s driving record could cause a drastic increase to their insurance cost.
Keeping your driving record free of accidents and violations could save you hundreds, or in some cases, thousands of dollars on a truck policy.
Commercial truck insurance rates vary by state. So you can expect to pay more just because you operate in states with higher rates.
Does cheap commercial truck insurance exist?
The meaning of ‘cheap’ is relative, but few truckers would describe their truck insurance as cheap; nor would they want to. Trucking is their livelihood. What they’re usually looking for is the ‘best value’, which is a combination of a competitive pricing, customized coverages, and first-rate service.
Here’s a few things to help you get the best value for your truck insurance:
Adjust your coverages
More coverage equals more protection, but it’s not always in the budget. Luckily, you can adjust your coverages to help you save on your truck insurance cost.
For example, physical damage coverage is usually necessary for trucks with an outstanding loan or lease. To reduce your total cost, you could simply raise your deductibles, say, from $500 to $1,000. Just remember that you’ll have to pay more out of pocket if you have a claim.
Also remember that less coverage means less protection. Make sure you’re satisfied with the coverage you choose before you start your policy.
Factor monthly payments
Don’t let the annual cost shock you. For example, a commercial truck insurance quote that costs $11,300 per year might sound difficult to manage, but by breaking it into monthly payments - roughly $942 per month – it becomes less intimidating and easier to budget.
Some companies, like Progressive, offer very significant discounts to customers who pay in full (see below). But each insurance company has unique billing options, so be sure to ask which options you qualify for when getting your truck quote.
Ask about discounts
Discounts† are one of the easiest ways to help you get the best value on commercial truck insurance. A few of our favorite discounts for for-hire truckers include:
- CDL discount – You’ll receive a discount just for having a valid commercial driver’s license for at least two years. How easy is that?
- Business experience discount – You’re eligible for this discount if you’ve been in business for three years or more.
Let us help!
As America’s #1 truck insurer*, we offer competitive rates and multiple ways to save to create more affordable commercial truck insurance options for our customers.
Our licensed commercial agents will tailor a quote to help you meet your business and truck insurance needs. They’ll work within your budget and look for find pricing and discount options to maximize your savings.
†Discounts vary and may not be available in all states and situations.
*No. 1 truck insurer from SNL Financial's 2016 national written premium data.