By Donna Ryun, OOIDA Communications manager
There’s no need to panic when it’s time to buy truck insurance. With a little planning and consumer smarts, it’s nothing that you can’t handle. You simply need to choose an agency that you can trust to provide the coverages and services you need at prices you can afford.
Let’s start out with the “where.” There are so many places that sell insurance, so how will you know which one you should choose?
You might begin by talking to your fellow owner-operators. Ask them where they buy their truck insurance and whether they are pleased with their choice. Word-of-mouth is a good way to get a referral. These are referrals from folks who won’t gain anything by promoting their own insurance agency, which makes their recommendation much more credible.
When checking out any agency, you should always ask questions about their experience in working with owner-operators and their truck insurance needs. Does the agency specialize in truck insurance? What coverages are offered and what, if any, special services will the agency provide? How long has the agency been in business?
Take the time to talk with the agent about your individual operation and don’t hesitate to ask for an explanation for anything that you don’t understand. Be prepared to answer some questions yourself. And remember that an agent who is eager to find out all about your trucking business is one who is trying to assess your needs in order to provide the coverages you require for the best possible rates.
Think twice about an agent who makes you feel rushed or uncomfortable about asking questions. A good agent will welcome your inquiries and allow you all the time you need to feel confident that you will get the service you deserve even after the sale is made.
Professional truckers lead busy lives, so it stands to reason that convenience would be a factor when choosing an insurance provider. However, you should think long and hard before buying your truck insurance through the truck dealership that finances your equipment or to have your motor carrier take the premium out of your settlement checks.
An insurance agency specializes in insurance and providing coverage to suit your needs is what they do. Your dealership-affiliated lenders want to protect their financial interest in your equipment. Many policies written through those lenders are “single-interest” policies. This means that they insure for loan value only, and when they say “single-interest” they mean their own interest. You should also watch out for additional finance charges that you may incur should you decide to get your insurance through your lending institution.
Allowing your motor carrier (if you are a leased owner-operator) to supply your truck insurance and take it out of your settlement checks may seem more convenient. But keep in mind that should you ever decide to terminate your contract with your carrier, your insurance will terminate as well.
Let’s move on and talk about the “what” part of buying truck insurance. There are so many coverages available and sometimes that can be confusing. One benefit of choosing a great agent is being able to trust that he or she will help you decide on the coverages you need in order to protect yourself and your business. The basic insurance you need will depend upon the type of operation you have.
For example, if you are running under your own authority, you will need primary liability and motor truck cargo insurance. Your brokers and shippers may have other contractual requirements, but these two coverages are the most important.
Primary liability is insurance against loss from legal liability of the insured for bodily injury or property damage to another party. The Federal Motor Carrier Safety Administration requires $750,000; however most shippers and brokers require $1 million, so you’ll want to keep that in mind.
Motor truck cargo is insurance against loss from legal liability for damage to goods or merchandise in the insured’s care and custody in the ordinary course of transit and includes coverage for debris removal, earned freight and refrigeration breakdown.
If you are leased to a motor carrier, you’ll need to consult your contract. The lease should specify any requirements for secondary liability such as bobtail, non-trucking liability, or unladen liability. The lease should also list any additional coverages the motor carrier requires. Be aware that you will always have the option to secure these coverages from the insurance provider of your choice. You do not have to buy them from your motor carrier.
Non-trucking liability provides liability coverage 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.
Bobtail liability provides liability coverage while the truck is being operated without a trailer attached, whether dispatched or not.
Unladen liability provides liability coverage while the truck is being operated with an attached empty trailer or without any trailer at all, whether dispatched or not.
This brings me to the “how much” part of the question. Pretty important, especially in today’s economy; however, should you buy for price alone?
You already know the answer. It’s very rare to “get something for nothing” so be suspicious when you get a price that seems far below the other quotes you’ve received. When purchasing insurance for your business, the idea is to get the most value for the premium that you pay.
You’ll need to consider the coverage you are getting for the price you are paying. Policy wording can be difficult to understand. So when in doubt, ask an agent to explain it to you. Insurance policies not only tell you what they cover; they also tell you what they don’t cover. Make sure you are comparing apples to apples when purchasing your truck insurance.
In order to get the best rates, be honest with your agent about your operation and your records, including work history and your motor vehicle record. If you operate your business in a professional manner and remain loss free, you should receive better rates.
It’s important to consider what services you can expect for the money that you pay.
For example, if you purchase primary liability and motor truck cargo and are required to maintain insurance filings, you should expect your agency to provide this service. Some agencies have the capability of doing your filings electronically, while others rely on the mail.
Providing proof of insurance (certificates) is definitely an agency service that you should require. Verifying your insurance coverages with certificates of insurance and policy wording can help to eliminate becoming involved in an insurance scam.
You should also expect an explanation of how you should file a claim if you are involved in an accident. You will want to be able to obtain a history of any losses as well, and your agency should be able to secure these records for you at your request.
It’s not smart to insure for low rates if the company can’t (or won’t) provide good timely service. The lower premiums won’t help you at all when you can’t get loaded due to problems with your insurance.
There is a lot to consider when it comes to buying truck insurance. You will know you’ve found the right agency for your trucking operation when you feel confident that your agent has done everything possible to match your needs with the services that the agency provides. LL
Editor’s note: You can find this information and much more by visiting OOIDA’s truck insurance at ooidatruckinsurance.com.