Trucking is a vital industry that ensures goods move across the country efficiently. However, the heavy weight and size of trucks pose significant risks on the road.
To mitigate risks in truck accidents, truckers and trucking companies must carry specific amounts of coverage on their insurance policies. These financial requirements are to protect other drivers, pedestrians, and businesses from injuries and losses due to accidents involving commercial vehicles.
Federal Insurance Requirements for Truckers
Federal regulations mandate insurance requirements for truckers operating in interstate commerce. The Federal Motor Carrier Safety Administration (FMCSA) establishes these regulations, which will vary based on what type of cargo a truck is transporting.
At a minimum, truckers must carry:
- $300,000 in liability insurance for vehicles transporting common household goods.
- $750,000 in liability insurance for trucks hauling materials that are considered non-hazardous.
- $1,000,000 to $5,000,000 liability insurance if transporting hazardous materials, depending on the level of risk.
These policies primarily cover injuries, property damage, and environmental clean-up costs resulting from accidents. It should be noted that liability insurance doesn’t cover damages to the trucker’s vehicle, which requires separate coverage.
State-Level Insurance Requirements
Each state has its own additional insurance coverage requirements for truckers operating solely within their borders, known as intrastate trucking.
These requirements typically align with federal minimums, but some states impose stricter standards. For instance, states like California may require higher minimum liability limits or additional coverages for specific kinds of cargo.
Truckers have to understand and comply with their state’s specific laws to operate legally.
Other optional types of insurance include:
Cargo Insurance
Truckers transporting goods must also carry cargo insurance. This type of coverage protects the value of the freight being hauled in case of loss, damage, or theft.
While cargo insurance is not required under federal law, most shippers demand it as part of their contracts. Truckers and companies typically purchase policies with limits ranging from $100,000 to millions of dollars based on the cargo and its potential risks.
Physical Damage
Physical damage coverage is designed to protect the truck in case of accidents, vandalism, or a natural disaster. While not legally required, this coverage is essential for financial security. Trucks are significant investments, and repairing or replacing a damaged vehicle without insurance can lead to substantial losses.
Physical damage coverage includes two components:
- Collision Coverage: Covers damage from accidents involving other vehicles or objects.
- Comprehensive Coverage: Covers non-collision events like theft, fire, or weather-related damage.
Bobtail Insurance and Non-Trucking Liability
Truckers who drive their vehicles without cargo or a trailer attached may need additional insurance.
Bobtail insurance covers liabilities when operating a truck for non-business purposes, such as driving to a repair shop or personal errands.
Non-trucking liability insurance, on the other hand, provides coverage for accidents that occur when a truck is not being used for work-related activities.
Uninsured and Underinsured Motorist Coverage (Optional)
Truckers also face risks from other drivers who may not carry adequate insurance. Uninsured and underinsured motorist coverage steps in to cover damages or injuries if an accident occurs with a driver lacking sufficient liability insurance.
This optional but highly recommended coverage ensures financial protection in situations where the at-fault driver cannot fully compensate for the damages.
The Role of Proof of Insurance
Truckers and companies must provide proof of insurance to comply with federal and state regulations.
Certificates of insurance are often required during roadside inspections, when securing contracts with shippers, or when renewing operating authority. Failure to provide proof can result in significant penalties, including fines, suspension of operating authority, or impoundment of the vehicle.
Consequences of Non-Compliance
Truckers who fail to meet insurance requirements face serious consequences. Non-compliance with these regulations can lead to large fines, suspension of commercial driving licenses, and even lawsuits and damages in the event of an accident. For trucking companies, having insufficient coverage can lead to damaged reputations, lost contracts, and financial ruin if they can’t pay damages out-of-pocket.
Maintaining proper insurance not only fulfills legal obligations but also demonstrates professionalism and responsibility.
Truck drivers must navigate a complex landscape of insurance requirements to maintain compliance and protect their livelihoods. From federal and state liabilities to optional coverages like cargo insurance, having the right type of insurance in place is essential.
At DiPiero Simmons McGinley & Bastress, PLLC, we’re confident that by understanding these requirements and working with reputable insurers, truckers can safeguard their operations and contribute to safer roads for everyone.
