Thinking about starting your own trucking authority? Before you choose a company name or register with the DOT, here are answers to some of the most common questions about new venture trucking insurance!

1) Do I Really Need a $1M Liability Policy?

The short answer—yes. While the limits of auto-liability required by the FMCSA (Federal Motor Carrier Safety Administration) start at $750,000 (required limits start at $1,000,000 for registered hazmat-haulers), nearly all shippers and freight brokerages require $1,000,000 of auto-liability insurance—and at least $100,000 of motor truck cargo insurance—to even be considered when booking a load.

This $250,000 buffer protects both the freight broker and the shipper in the event of a loss. The increase to liability limits also shields you from overflow when accidents involve fatalities. $1M is the average cost for losses involving fatalities, here, but this figure can climb closer to $3M when you start to account for property damages, funeral costs, pain and suffering compensation, attorney fees, and more.

Even if the accident isn’t a fatal one, covering your bases with the right amount of liability insurance can protect your business’ reputation and your livelihood. Having anything less can end up costing you more in the long run.

2) What Other Coverages Do I Need?

Motor Truck Cargo
Often referred to as MTC, or simply as Cargo insurance, this line of coverage protects the goods you or your company are hauling. For example: in the event of an accident involving you and your load of building materials, refrigerated seafood, or any other cargo, MTC insurance would protect the cost of replacing those goods or paying out to the customer.

Most companies combine $1,000,000 of auto liability insurance, along with $100,000 of cargo insurance to cover what most in the industry refer to as, the basic necessities of trucking insurance. Having both auto liability and MTC make you eligible to haul for hire.

Comprehensive and Collision Coverage
Otherwise known as physical damage coverage or Phys Dam, this line of coverage will cover your truck and/or trailer for the appraised value at the time of the claim, in the event of damages incurred in an accident or while parked on a lot. The value of your truck is set by you, the insured, and represents a smaller percentage of the insurance premium for the year. Compared to auto liability, this coverage only makes up a small percentage of your total premium.

Related Post: The Next Generation of Cargo Insurance: Real-Time and On-Demand

3) How Much Can I Expect To Pay?

Insurance costs vary from state to state. Premiums also fluctuate heavily by a number of factors like driver experience, age & type of vehicle, your radius of operations, commodities hauled, motor vehicle reports for you and other drivers, safety scores and several other factors. Regardless, the average costs to appropriately insure your business from damage to others (in the form of auto liability insurance), damage to cargo (in the form of motor truck cargo insurance), and damage to your own equipment (in the form of physical damage insurance) can range between $8,000 – $25,000 per year.

This cost may surprise you. But even if you’ve been running under someone else’s authority, have years of experience under your belt, and millions of miles logged, new trucking companies still fall under the category of “high-risk” due to the lack of history tied to a particular DOT authority. If you’ve been running under someone else’s authority, you may be accustomed to paying $1,000 – $5,000 a year for insurance.

Related Post: Do I Need Trailer Interchange or Non-Owned Trailer Coverage?

Remember, the insurance you need to purchase prevents you and your new business from entering into a financial nightmare. Your insurance also protects your way of life. So, after you’ve made the decision to start your own trucking business, purchase (or lease) your new truck or tractor, apply for your DOT number and/or Motor Carrier authority, contact a licensed insurance broker. The right agency will shop the markets on your behalf and work to get you the insurance product you need to be successful on the road and beyond.

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Why You Need Insurance Coverage

Being as volatile as it is, the truck industry may seem to be a challenge to maneuver. However, having the right information and working with experienced experts will have you start up a new venture and succeed in it. Taking new venture truck insurance helps you deal with liabilities that come in the form of loses and damages of products your transport. Primary auto liabilities and physical damage coverage for a new start-up are necessary for smoothly running the business. As a new owner-operator, you will need commercial truck insurance whether your start-up is small or large. Look for a direct quote company and work with experienced brokers to get the best deal. New venture truck insurance can be taken for:

• Semis
• Route delivery trucks
• Box trucks
• Straight trucks
• Auto haulers

If you are a new CDL driver, prepare all the documentation and information needed for a quote beforehand. This way you speed up the process and make it easy for both parties. Some of the information you will need to provide include;

• Driver information
• Vehicle information
• Radius of operation
• Items hauled

Once you fill in the forms, check your application status for where your application authority has been issued.

Best Way to Get  New Venture Truck Insurance Coverage

If you want to establish the most basic business, a sole proprietorship is a way to go. You will be the only owner of the business and have responsibility for everything. For a more advanced business plan, you can set-up a corporation or a limited liability company. Seek expert advice for the best option for a new venture. It is essential to take time in researching and choosing a business tax structures in the early stages of your new venture to get it out of the way. As you shop for the best trucking company, ensure it is close to where your trucks will be operating for easy access in case you need any assistance.

Go for budget-minded insurance coverage so that you don’t waste your available funds. Understating the state of your finances and using your funds appropriately will help you get your business on its feet. Even as you look for affordable rates, make sure your insurance coverage is not compromised. Look for a company that will not penalize your business because it has no track record. With CDL experience and personal credit, you should be able to take new venture truck insurance without any problem. Comparison shopping is the right way of finding the suitable trucking company. You can also opt to lease to a motor carrier when you have got your rig. You will need:

• Non-trucking liability
• Bobtail insurance
• Physical damage insurance

When you are doing comparison shopping, look for new venture insurance companies that have programs designed for trucking companies. They can help you pinpoint the most appropriate market for you to thrive. Some of the insurance options under new venture truck insurance include:

• Moving and storage insurance
• High-risk insurance
• Owner-operator programs
• Risk operator programs
• Risk retention groups
• Long haul trucking insurance

Conclusion
Getting expert help from an experienced insurance broker of renowned trucking companies helps you in focusing on budget-minded insurance coverage. Whether you are a new driver or a new start-up owner, finding the best new venture truck insurance company is essential. Look out for affordable rates and a company that does not penalize you for having a new venture.

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