4 Things New Companies Should Know About Truck Insurance

Congratulations on your new MC and DOT number! Starting your own trucking company is exciting, but your to-do list is a mile long. Finding the right commercial truck insurance may rank near the top of your priorities.

Partnering with the right insurance agent is essential to your success. You need an agent that speaks truck. Trucking Insurance Services is a premier insurance agency that specializes in truck insurance. You wouldn’t ask a Toyota Prius driver to haul logs, so don’t ask just any agent to write truck insurance.

Here is our list of 5 things every new trucking company should know about commercial truck insurance!

1. Insurance Can Get Cheaper With More Experience

The number one question we are asked is whether insurance will get cheaper after the first year in business. The answer is: It Depends.

Insurance rates are determined by millions of rating factors including business experience. The more years of continuous business operation, the more insurance companies will consider your company. Many insurance companies with preferred rates such as Northland, Nirvana, Crum and Forster, and Berkley Small Business will consider your company after two or three years of operation. These companies may save you thousands of dollars and provide higher quality and more comprehensive coverage.

However, if your company has unsatisfactory safety scores or several insurance claims, your business experience will be overshadowed by operational concerns. Insurance underwriters will heavily weigh your CSA score, ISS score, and loss history when determining your eligibility and rate. Working with a compliance team or safety manager may reduce your insurance costs.

At the end of the day, you control many of the rating factors your insurance company considers. The key to cheaper insurance is safe driving.

2. Brokers Require More Coverage Than The FMCSA

As a new trucking company with mounting operational costs, you may be tempted to purchase $750,000 Auto Liability. While that is sufficient for most companies (auto haulers require higher limits) to activate their MC number, brokers require at least $1,000,000 for loads.

Sure, you can start the policy at $750,000 to age the MC number. However, you need to understand the additional costs for higher limits and how that will impact your future payments before you purchase the insurance policy. Imagine purchasing an inexpensive policy with lower coverage only to discover the limits you need to operate are unaffordable? It happens more often you’d think.

You should also consider quoting $100,000 motor truck cargo, comprehensive and collision (known as physical damage), and truckers general liability. Knowing the annual cost for these coverages can save you headaches down the road.

3. Your Insurance Options Are Limited At First

As a new trucking company with a fresh motor carrier authority, you’re sort of an unknown to insurance carriers. While you may have 20 years or more of CDL-A experience, your company is brand new and you haven’t established safety scores or loss history. Fewer insurance carriers are willing to offer quotes to brand new insurance companies.

However, after two or three years of operating history and great safety scores, you may qualify for other carriers that offer more affordable rates.

The majority of new trucking ventures purchase insurance with Progressive due to their competitive new venture pricing or their overall flexibility and broad appetite. GEICO’s new trucking insurance program has rolled out in many states and offers broad coverage options for new ventures, too. In addition,  you have options such as Canal, CoverWhale, Berkshire Hathaway, National Indemnity, and more.

Working with our licensed agents that specialize in trucking will put you in the right policy at the best price. Call us at 855-281-2924.

4. Purchase Insurance With Federal Filings

Always ask your insurance agent whether their quote includes filings for your MC number.

With insurance costs on the rise and operational costs at all-time highs, it makes sense that finding affordable insurance is a priority. But, purchasing an insurance policy without federal filings does little to get your wheels rolling and can cost you precious start-up funds when you need those funds the most.

In reality, only a handful of insurance companies will write commercial auto insurance for trucking with federal filings. It’s essential to verify that federal and/or state filings are included in your quote prior to purchasing. It can change your premium substantially!