Bottom Line
Time for an insurance review
Are you getting the most value for the money you spend, or are unneeded coverages sucking your money down the drain?

By Donna Ryun,
OOIDA communications manager


Did you make any New Year’s resolutions for 2008? If you’re like many of us, you’ve already broken a couple; however, a few of us have no choice but to try to stick with one of the most frequently made promises to ourselves. It’s the one about money – saving more and wasting less.

With this in mind, now’s a good time to think about your truck insurance. Can you trust your agent? Do you have the coverage you need? Is the rate competitive? Are you getting the most value for the money you’re spending?

The answers to these questions will help you determine whether or not you’re on your way to keeping that all important resolution to save more and waste less.

It’s common sense to choose an agent you can trust, but how do you find someone like that? Get a little help from your friends, that’s how. Ask your fellow owner-operators where they buy their truck insurance and whether or not they are pleased with their choice. Whatever you do, don’t simply rely on advertisements or celebrity endorsements. Get a referral from someone you trust.

Check out a prospective agency by asking a few pertinent questions, such as:

  • Does the agency specialize in truck insurance?
  • How long have they been in business?
  • What coverages are offered and how much do they cost?

Talk about your specific trucking operation and don’t be shy about asking for an explanation of anything that you don’t understand.

A good agent will always try to find out all he or she can about your trucking business in order to assess your needs. If you feel rushed or less than confident regarding the agent’s ability to provide answers to your questions, then you’re probably with the wrong agent.

If you’re a leased owner-operator who’s tempted to buy insurance through your motor carrier, consider what would happen if the carrier goes under or simply decides to terminate your lease. Once that contract is canceled, so is your insurance. Worse yet, if your motor carrier goes broke, you’ll lose not only your coverage, but probably any escrow that you have as well.

If your bank or finance company offers insurance, should you go for it? Probably not. You wouldn’t go to an auto mechanic for heart surgery, would you? So why go to a lending institution for your truck insurance?

Insurance agencies specialize in providing coverage to protect the investment you have in your equipment, while banks just want to make sure their own financial interests are insured.

In addition, they could also assess finance charges or administrative fees that waste your hard-earned money.

Trust your own instincts, because you’re the one who’s best equipped to know what you need and how you want to be treated by your insurance agent. After all, you’ve been making important decisions like this for most of your life.


Let’s talk coverage

Not all owner-operators will need the same coverage, and a good agent will tailor your insurance package to suit your individual requirements.

For example: Owner-operators who have their own authority, private carriers, or those who are hauling exempt commodities will need primary liability and cargo coverage.


Primary liability coverage protects against loss from legal liability of the insured for injury or damage to another person or their property.

If you are maintaining your own primary liability coverage and using your own authority, it means that you have secured liability protection for your truck while it is being operated for both non-trucking and trucking purposes, empty or loaded, trailerless or with a trailer, i.e., in any capacity, subject to any exclusions in the policy wording.


Motor truck cargo coverage protects against cargo damage or loss and may include debris removal, unattended truck coverage, earned freight coverage, and refrigeration breakdowns. You should always check with an agent regarding specific policy wording for these coverages.

On the other hand, owner-operators who lease their equipment to a motor carrier and run under the company’s authority will have insurance requirements that differ according to the contract they have signed with their carrier. If you are a leased owner-operator, it is imperative that you read and understand your lease agreement before signing it.

The lease contract should specify any coverages that the motor carrier requires the leased owner-operator to maintain on his/her own. These coverages may include non-trucking liability, bobtail or unladen liability. Don’t worry, you won’t need all three. Again, check the terms of your lease for specifics.


Non-trucking liability provides coverage for the leased owner-operator while the truck is being operated for personal convenience, outside the scope of the motor carrier’s control or direction, and with no economic benefit to the owner-operator or the lease company.

For example, non-trucking liability would cover you when you take the kids for a ride in the big truck on a Sunday afternoon. However, things such as having maintenance or repair work performed on the truck or traveling to and from locations for such work is considered a business use, and is not covered under non-trucking liability.


Bobtail liability provides coverage for the leased owner-operator while the truck is being operated without a trailer attached, whether dispatched or not.


Unladen liability provides coverage while the truck is being operated with an attached empty trailer, or without any trailer at all, whether dispatched or not.

It is important to remember that federal law requires the authorized motor carrier to maintain liability protection for the public in all instances. The fact that the leased owner-operator maintains non-trucking liability, bobtail, or unladen liability coverage does not relieve the carrier from its legal obligation to maintain insurance for the protection of the public for all motor vehicles operating under its authority.

Many owner-operators will want to carry a variety of optional coverages that are available to them. Physical damage coverage is not required by law; however if your equipment is financed, your lending institution will require you to maintain this coverage.


Physical damage provides protection against loss or damage to your equipment caused by collision, fire, theft, or vandalism. Some physical damage policies may include glass breakage and downtime. You will need to check with your agent to determine whether these coverages are a part of your physical damage policy.


Other optional coverages may include gap coverage, which provides protection for the difference between your loan payoff and the market value of your equipment in the event of a total loss by collision; breakdown coverage for emergency roadside breakdowns; and personal property coverage, which protects specific property not covered by your fire, theft, and collision, or homeowner’s policies.


Supplemental towing and cleanup coverage covers towing needs from the scene of a covered loss and also helps with the cost of debris removal and cleaning of the immediate vicinity of an accident.


Rental reimbursement ensures that you’ll get reimbursed for rental in the event of a covered loss under physical damage or roadside breakdown. You are usually required to have a paid invoice from a valid rental company and the completed reimbursement form. Be sure to check policy wording for coverage limits.


Trailer interchange coverage is an optional coverage that provides basic physical damage protection to non-owned undescribed trailers pulled by your vehicle.


Passenger accident coverage provides accidental death and dismemberment coverage and accidental medical expense coverage for passengers other than co-drivers and employees. Again, always check with an agent for specific policy wording.

Now that you know about some of the different coverages that are available, you’ll want to find out how much they cost. Obtain several quotes from various insurance providers, but use caution. Cheaper is not always better.

Insurance policies not only tell you what they cover, but also tell you what they don’t cover, so make sure you are comparing apples to apples when purchasing your truck insurance. Policy wording can be difficult to understand. When in doubt, ask an agent to explain it to you. The idea is to get the most value for the premium that you pay.

OOIDA’s Insurance Department is here to help in providing both the coverages you need and information on those coverages. Even if OOIDA was not your first choice for truck insurance, our agents will be pleased to assist in reviewing and evaluating coverages you may obtain elsewhere. Call 1-800-715-9369. LL


If you have questions about doing business as an owner-operator and/or an independent trucker, please e-mail them to or send them to PO Box 1000, Grain Valley, MO 64029. We can’t publish all of your questions in Land Line, but you will receive a response, even if your letter is not published.