Tanker Insurance: What Is It, The Costs, The Benefits
Tankers transport bulk cargo, oil, chemicals, other liquids, and gases. The nature of goods hauled by tanker trucks is often hazardous or sensitive, and these vehicles are expensive.
This means repairing or replacing many parts of the vehicle is difficult. Tankers can prove to be a big source of income for the owners, but the risks they carry are also magnified manifold.
Why do you need tanker insurance? Tanker insurance calls for high premiums, yet it is crucial to be insured to protect you from the shattering financial burdens that a tanker truck accident can cause.
This article will explain insurance policies and what tanker insurance covers, how much it costs, who needs it, and more!
What is Tanker Insurance?
Heavy-duty vehicles like tanker trucks have their unique set of challenges and risks. The operational costs of tanker trucks include labor, fuel, and maintenance, and they can be massive, according to research and studies conducted on cost analysis of commercial trucking by the American Transportation Research Institute.
In 2021, the total marginal cost of trucking grew by 12.7%, which is the highest on record.
With a high center of gravity, it is challenging to maneuver tanker trucks. Often, it is difficult to turn them due to their grand size and low cutting radius. During loading or unloading, drivers must be careful about the hoses being in place. In an accident, tankers can get overturned. There may also be cargo spills. They can incur and bring about massive damage leading to costly lawsuits.
Tanker truck insurance can protect you from paying for these costs in case of an unfortunate event or damage.
Types of Insurance Policies for Tankers
A combination of different coverage schemes would be required to get adequate, reliable, and overarching protection for your livelihood and vehicle with a commercial tanker truck.
- Liability Insurance: This is the basic mandatory coverage required by all commercial truckers and protects the public when you are at fault in an accident. It covers medical expenses for bodily injuries to motorists, drivers, or anyone who has been harmed on the road due to your fault. It also compensates for damages to property that may have occurred during the accident.
- Collision Coverage: A tank truck is an expensive investment. This one is required to protect the vehicle and compensate for its repair and any damages it may have incurred in an accident with another vehicle.
- Comprehensive Coverage: This covers you for losses incurred due to other circumstances like theft, fire, and others.
- Combined Additional Coverage: This is coverage for a specific type of damage or a specified peril that you choose to be protected from, for instance, fire.
- Cargo Insurance: This is coverage for the goods being hauled in your tank truck in the case of an accident. The insurance premium rises for hazardous goods.
- Pollution Liability: This unique and specific coverage is especially required for hazardous goods being hauled in your tanker. This coverage would be a significant savior if the freight spills and causes pollution.
- Debris Removal: This covers spilled cargo and is especially recommended for oil tankers.
- Earned Freight: If you cannot deliver the goods due to the accident, this coverage compensates for your income loss.
Who Needs Oil Tanker Insurance?
As commercial trucks, tanker trucks must carry liability insurance. However, other insurance policies, such as cargo insurance and debris removal coverage, are not required by law but can be very helpful in case of an accident.
That said, anyone driving a truck should consider tanker insurance policies.
Here are some businesses that need tanker insurance:
- Healthcare companies
- Water treatment companies
- Trading businesses
- Food warehouses
Read more: The Best Trucking Companies To Work For
How Does Tanker Insurance Work?
As a combination of collision and liability policies, tanker truck insurance has higher coverage limits because tanker trucks are more expensive and often transport sensitive cargo like oil and gas.
Tanker insurance for oil and gas requires a minimum of $750,000 of liability coverage to compensate the driver or the company in case of damage or bodily injury. Furthermore, more expensive cargo increases the policy limits, allowing your company to receive payment for damaged or lost cargo.
What is Tanker Insurance Cost?
The decisive factor for determining minimum coverage for tanker truck insurance depends on the freight hauled in the tanker. Tank trucks commonly haul water, milk, oil, gas, chemicals, liquid nitrogen or dry bulk.
While premiums are lower at around $9,000-12,000 per year for water or milk, coverage costs rise to $30,000-50,000 for hazardous materials like chemicals and gas.
The minimum coverage varies according to several other factors, including:
- The business area and distance covered by the tanker truck
- Different payment plans
- Whether you are paying upfront or month-by-month
- Your deductible
- Your limit
What Insurance Company to Choose?
Your commercial tanker operation faces specific risks and challenges that require a carefully considered repertoire of coverages.
East Insurance Group is a trusted insurance company where experts offer their analysis, costs, and benefits of various fuel tanker insurance plans for your heavy-duty vehicle.
After a detailed consultation, you will be equipped to make an informed decision about the minimum coverages and the types of coverage schemes that work best for your tank truck. A massive commercial trucking entity like a tanker truck deserves a comprehensive protection plan that effectively secures your income, vehicle, and others and saves you from crushing financial losses.
Examples of Tanker Insurance
You can purchase tanker insurance with Split Limit or a Combined Single Limit.
A combined single limit insurance policy or CSL provides overall coverage regardless of the amount of damages. For example, if your CSL limit is $500,000, this entire sum will be paid to you for bodily injuries in case of an accident.
On the other hand, a split limit policy comes with previously decided limits. The policy always comes in three forms. For example, if your split limit policy is $25,000/$50,000/$25,000, it pays 25,000 max per bodily injury. It also means that it won’t cover for injuries that are over $50,000 combined.
Other Important Commercial Auto Insurance
Commercial auto insurance is a type of coverage that insures commercial vehicles against physical damages and liabilities in different types of accidents.
Commercial auto insurance is important because personal auto insurance doesn’t cover vehicles that are used for business purposes.
Other types of commercial auto insurance policies are:
- Rental insurance: When you need to use a rental replacement until your tanker truck is fixed.
- Towing insurance: Covers the costs of towing in case of an accident.
- Trailer insurance: Covers the truck trailer separately.
- Cargo coverage: Covers the cargo items in case they are lost or damaged.
- Accessories coverage: Covers the accessories inside the tanker truck (for example, navigation units and radios).
You might also like to learn more about hot shot trucking insurance.
Are you still confused about tanker insurance, or do you need some help with getting a quote for your business? Contact us today and get all the information you need fast and for free!
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