Insurance basics: Selecting the right auto liability policy

It’s vital to speak with an agency that has experience working with new entrants to the trucking industry

Near the top of the to-do list for any trucking company is securing basic auto liability coverage before hitting the road. For those without trucking experience, understanding how to get the right insurance can be daunting.

Reliance Partners Chief Sales Officer Brandon Richards reassures new entrants that insurance doesn’t have to be taxing, as long as you partner with the right provider.

“If you’re a new venture and this is your first time dealing with regulatory insurance, you should definitely consider your options, but it’s most important that you speak with an agency that has experience working with new clients, and understands exactly how to educate them on their needs,” Richards said.

It’s imperative to know exactly what you need before signing the dotted line on any policy form, so don’t be afraid to ask an agent many questions. Remember to think of insurance not as a transaction or commodity, but as an agreement formed from a business relationship.

So is auto liability required?

The answer is yes — all trucking companies are required to have this line of coverage. Auto liability or truck liability insurance provides protection for the motor carrier for legal liability arising out of the ownership, maintenance and use of any insured automobile.

Richards suggests first weighing your options: Compare coverages from a handful of providers to know what’s on the table. He recommends taking time to consider a policy that protects against uninsured motorists and personal injury, as well as deciding whether or not you’ll need hired and nonowned auto liability or a blanket additional insured endorsement.

Another thing to keep in mind is insurance endorsements, which are amendments, modifications or additions to the original policy. There are many types of inclusions or exclusions that could be written into a policy, so be sure to ask your agent about all items that appear on the endorsements list.

“Always look at the policy forms of the coverages being offered. Look through sample policy forms for a list of the endorsements so you’ll know what’s stated in each document,” Richards said. “Is there a radius restriction listed? Are there strict driver guidelines that may hinder you from being able to hire the drivers you’re looking for? Does the policy have restrictions on how old the power units can be?”

After reviewing all the bells and whistles in a policy, next on the agenda is determining how much coverage is needed. The minimum that can be purchased is $750,000 combined single limit per federal regulations. However, Richards states that $1 million is typically the standard, which is the minimum amount he recommends his clients consider. If it fits the budget, he also suggests clients purchase excess liability or umbrella policies for additional protection.

Reliance Partners states that motor carriers who transport certain hazardous cargo must maintain a total of $5 million in auto liability coverage in those instances, in accordance with the Federal Motor Carrier Safety Administration’s BMC-91/91X requirements.

Price is always a factor in the decision-making process, but Richards warns against considering it the key selling point, explaining that quality is often based on the price you pay.

The key to securing excellent coverage ultimately rests with your insurance provider. That is why it’s important to wisely choose a partner you can trust, and select a plan that gives you peace of mind to operate efficiently without worrying about potential gaps in coverage.

Richards suggests reviewing the AM Best rating of the carrier, too. The financial strengths of an insurance company is often of great interest to shippers and brokers, so it’s important to know if you’re partnering with an A-rated or a non-rated carrier.

To learn more about auto liability insurance and coverage plans to best fit your business, reach out to Brandon Richards and Reliance Partners today.