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A trucking business is a huge investment, in terms of effort and finances. Therefore, it only makes sense to want to protect the business as much as possible. Due to the magnitude of the business, several risks exist both on-road and off-road, which is why there exist several types of insurance policies specifically designed for the trucking industry.

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motor carrier insurance

The coverage was introduced by the Insurance Services Office, Inc (ISO) in 1993 to address the needs of the trucking industry. Thus, this insurance provides various types of coverage such as auto liability, physical damage, and trailer interchange.

Types of Motor Carrier Coverage Provided

As we said, the coverage provides various types of coverage, some of which are mandatory, while some can be endorsed. The types of coverage provided are:

Mandatory Motor Carrier Coverage

The only mandatory coverage provided by motor carrier truck insurance is liability insurance. This policy pays for any damage that is caused to third parties or their property due to an accident that is caused by you or is a result of your actions. When the policy provides coverage for bodily harm, it is called “bodily injury insurance”, while coverage for the property is “property damage coverage”.

Additionally, cargo insurance may also be required as most brokers and shippers won’t hire truckers without a cargo insurance, as it covers accidents and ensuing damage to the freight that is hauled.

Optional Motor Carrier Coverage

Some of the optional motor carrier coverage provided by motor carrier insurance is:

Physical Damage Coverage: This type of coverage pays for the repair or replacement of your truck in the case of damage due to an accident (collision and causes other than collision). Therefore, it comprises 3 subheads of insurance policies: collision insurance, comprehensive insurance and Combined Additional Coverage (CAC).
Medical Payments Insurance: This type of coverage pays the medical bills for you and any other party injured while in your truck, due to an accident or truck-related injury. This insurance policy may be available only in certain states.
Uninsured Motorist Insurance: This policy pays for damage or injury to you, your passengers, and your vehicle if the accident is caused by a driver who is uninsured or doesn’t have sufficient coverage left in his/her insurance policy.
Bobtail or Non-Trucking Liability: These types of coverage are for when you drive your truck without the trailer attached to it. The former protects you while you’re on a job, while the latter protects you when are not under dispatch but still driving your truck.
Some other coverages that you could also consider are general liability insurance to protect against any accidents relating to the company itself (generally off-road) and an umbrella policy that covers all the gaps in your coverage.

What Are the Restrictions of Motor Carrier Insurance?

Some insurance companies lay restrictions on this policy, such as distance-based operation. Vehicles may be provided with the insurance only if they operate within a radius of 500 miles, in the case of liability coverage. Other insurance companies operate only in certain states.

Some companies also do not apply any restriction to physical damage and non-trucking liability insurance coverage.

    Requirements for the Motor Carrier Policy

    As per the Federal Motor Carrier Safety Administration (FMSCA), a new applicant will be issued a motor carrier authority to guide the applicant to get commercial truck insurance and submit the required documents to the FMSCA. However, requirements can be based on the kind of coverage you need. Some of the requirements are:

    Public Liability: Unless trucks haul household goods, the FMSCA only requires commercial auto liability insurance, which covers any accidents caused by the driver resulting in damage to a third party’s person or property.
    Physical Damage: Physical damage and even general liability insurance are not required for a motor carrier authority, but may sometimes be required.
    Requirements for the Policy: Motor carrier insurance for new authorities is currently around $12,000 a year for a policy with a liability of $1,000,000 and a cargo policy of $100,000. Pretty expensive, we know! Luckily, there are ways to reduce the amount you pay for your insurance, such as:

    • Getting multiple quotes from multiple agents as some may offer lower quotes for the same coverage that another company is offering at a higher price.
    • Make use of discounts. There are several ways to get discounts on your premium!
    • Increase your deductible amount.
    • Pay your premium upfront instead of in installments.
      Insure all your trucks under one policy as the cost of adding new trucks to an already-existing policy is much lesser than taking a new policy.
    • Since not all the types of coverage offered by motor carrier insurance is mandatory, only choose the types of coverage you need, and the corresponding limits.
    • Renew your insurance on a yearly basis. This also lets you switch insurance providers if your company suddenly decides to hike the premium rates.

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