Insurance For Truck Drivers – The Coverage You Need
First, truckers, tractors, and trailers, are insured as commercial equipment and not automatically afforded the coverage extensions of a personal auto policy. Electronics, loading equipment, load securing equipment, rental reimbursement and personal character are insured differently and are not automatically covered.
Commercial Auto Liability is pretty straight forward. If a trucker has ICC Authority, a filing for proof of financial responsibility will be given to the Feds. Filings are what keeps a trucker compliant with federal (ICC) authority requirements. Uninsured / Under Insured Motorist is also helpful for a trucker that has been injured by a means with out insurance. Medical payments are useful when some one is injured in and on your truck.
Cargo insurance covers the truckers’ responsibility for others goods he is hauling. There are 3 different forms or policies: Named Perils and Theft which is thin in coverage, general Form which adds certain coverage to the basic form and All Risk coverage which offers coverage for all causes unless excluded by language in the policy. in spite of of the form, There are certain coverages a trucker would need. Truckers should buy cargo coverage equal to the highest value of goods they haul. Some policies have a co-insurance clause that can limit coverage limits if you are hauling a higher value load than the limit insured on your policy.
1) A refrigerated carrier would need Reefer Malfunction or Reefer Breakdown coverage to cover the damage from halting or spoilage incurred if his reefer unit breaks down. Remember to find out if the policy covers a mistake in setting the temperature control device. Most reefer policies only cover in case of a unit breakdown or malfunction.
2) A flat bed carrier should have a wetness coverage or endorsement in the event his load is damaged from rain or snow. Most policies have a tarpaulin endorsement that limits coverage to loads that are properly covered. Sometimes a tarp can be damaged or blow loose due to no fault of the trucker resulting in damage to the load that may not be covered unless wetness coverage is additional. Coverage for tarps, chains and binders is also desired to replace stolen or damaged binding equipment that are not other wise covered.
3) A dry van carrier would be advised to make sure that shifting of a load is covered. In this kind of operation, larger and longer trailers are used and load securing equipment can fail. These instances are scarce but do happen.
Every trucker should have earned freight coverage on his cargo policy. This coverage pays for lost revenue when he is not able to deliver his load due to a covered loss. Disposal and cleanup coverage for a loss should be at the minimum $10, 000.
Physical Damage coverage is generally to repair the tractor and trailer in case of a covered loss. This coverage is insured on a stated value. The value set for the equipment is the truckers responsibility. The insurance company will pay a loss based on equipment of like quality. That method market value. So the trucker should make sure his values are accurate. Remember you will pay a deductible for each unit unless your policy has a combined deductible endorsement. Also towing is only for a covered loss not disablement or breakdown. Many policies pay losses and include towing and storage limits in the stated amount of the means, so if you have a loss and a big tow or storage bill, the policy limit may not cover all your loss. Towing coverage can and should be purchased in addition to physical damage. Make sure your towing policy covers disablement and roadside service.
Electronics like cell phones, televisions and radios are generally not covered unless you buy additional coverage. Your personal character is also not covered unless specifically covered in the policy but may be covered by your home owners insurance. Rental reimbursement is also not automatically covered.
I’ve insured truckers for many years and know the emotional preference for their trucks can be very strong, but the insurance companies see them as a piece of equipment used to generate revenue. consequently, the older they are and more miles they have, the less money they are worth. Also betterment issues come into play. Tractors run many more miles than automobiles and have a longer life. The average tractor travels between 115, 000-135, 000 miles a year. Some insurance companies take this into consideration when replacing an engine or suspension part after a wreck. If the part life is expected to be 500, 000 miles and you have a wreck at 250, 000 miles some insurance companies will only pay half of the substitute value of the part because half of the parts expected life has been used. If an agent does not know how his insurance company handles this upfront, there may be hell to pay.
General Liability is for minor point liability exposure not covered by the commercial auto policy. This is a good coverage for auto haulers who may excursion vehicles to a location after they are unloaded from a trailer. Also a trucker that uses his own forklift to load and unload cargo.
Workers Compensation is required for injury to truckers or their employees. Occupational Accident is a low cost different with certain coverage advantages and disadvantages. It is always best to see a Truck Insurance Specialist to explain all these coverages and to get advise on particular types of trucking risks.
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