First, truckers, tractor, and trailers are covered as commercial equipment, but not automatically entitled to the extended coverage of an auto policy. Electronics, personal property, load securing equipment, load loading equipment, rental reimbursement, and load securing equipment are all insured separately and are not automatically covered.
Commercial auto liability is quite straightforward. A trucker who has ICC Authority will need to file a proof of financial responsibility. Truckers must file to comply with the federal (ICC) requirements. Truckers who have been hurt by vehicles without insurance can also get assistance from the Uninsured/Under Insured Motorist. When someone is hurt in or on your truck, medical payments can be very helpful.
Cargo insurance covers truckers’ liability for other goods they are hauling. There are three types of policies or forms: Named Perils & Theft, which provides limited coverage, Broad Form that adds some coverage to the basic form, and All Risk coverage. This covers all causes unless the policy specifically excludes them. No matter what form you choose, there are certain coverages that a trucker will need. Truckers should purchase cargo coverage equal to the maximum value of the goods they haul. If you haul a load of higher value than your policy’s limit, some policies include a coinsurance clause. This can reduce coverage.
1) A refrigerated carrier would require Reefer Malfunction or reefer breakdown coverage to cover damage from freezing and spoilage if his reefer device fails. Make sure to check if your policy covers an error in temperature control. Most insurance policies that cover reefers do not cover the possibility of a device breaking down or malfunctioning.
2) A flat-bed carrier should have a endorsement or coverage for wetness in case his load is damaged by snow or rain. Many policies include a tarpaulin endorsement which limits coverage to properly covered loads. Sometimes, a trucker’s negligence can cause a tarp to become damaged or torn off. This could result in damage that is not covered by the policy unless it includes wetness coverage. To replace damaged or stolen binding equipment, you will need coverage for tarps and chains as well as binders.
To ensure that the load can be moved, a dry van carrier is recommended. This type of operation can lead to longer and more expensive trailers and the possibility that load securing equipment may fail. These cases are rare, but they can happen.
Freight coverage should be a part of every trucker’s cargo policy. This coverage pays for the trucker’s lost revenue if he can’t deliver his load because of a covered loss. The minimum amount for cleanup and disposal coverage should be $10, 000.
In the event of a covered loss, Physical Damage coverage covers the cost to repair the tractor or trailer. This coverage is based on a specified value. Truckers are responsible for setting the equipment’s value. A loss will be paid by the insurance company if equipment is of comparable quality. Market value is what that means. The trucker must ensure that his values are correct. If your policy does not have a combined deductible endorsement, you will be responsible for the deductible on each unit. Towing does not cover a disabled or broken down vehicle. Many policies include storage and towing limits. This means that if there is a loss, a big tow, or storage bill, your policy may not cover the entire loss. You can buy towing coverage, in addition for physical damage. Your towing policy should include roadside service and disablement.
Unless you have additional coverage, electronic devices such as cell phones, televisions, and radios will not be covered. Personal property, unless covered by the policy, is not covered. Your home owner’s insurance may provide coverage. Rent reimbursement is not covered automatically.
Since I have been an insurance agent for truckers for years, I know how strong their emotional attachment is to their trucks. However, the insurance companies view them as a piece that generates revenue. The less they make, the more they get older and the more miles they drive. There are also betterment issues. Tractors can travel more than cars and last a lot longer. Average tractor travels between 115,000.00-135, 000 miles per year. This is something that insurance companies consider when replacing an engine part or suspension component after a wreck. If the expected part life is 500,000 miles, but you have a wreck at 250,000. miles, some insurance companies will only pay half the replacement value because the other half has been used. An agent who doesn’t know how his insurance company handles this upfront could find themselves in serious trouble.
General Liability covers incidental liability that is not covered under the commercial auto policy. This coverage is great for auto haulers that may transport vehicles from one location to another after the trailer has been unloaded. A trucker who uses his own forklift to unload and load cargo.
Truckers and their employees are required to have Workers Compensation in case of injury. Occupational Accident can be a cost-effective alternative, but it has certain disadvantages and advantages. A Truck Insurance Specialist is the best way to learn about all these coverages, and to receive advice on specific types of trucking risk.
You can find more information about me and truck-related issues at the links below.