Arrow Truck Sales Used Truck Buying Guide
March 9, 2017
How does the FMCSA’s GPS system alert apply to owner operator trucking?
June 9, 2017
When you first start a new owner operator job, shopping around for truck insurance may seem a bit confusing. You don’t have to become an insurance expert, but you do need to learn the basic requirements and terminology of commercial truck insurance so you can get the best quote. Keep in mind each state has its own regulations regarding commercial insurance so it is a good idea to visit your state’s motor vehicle website to find out what their insurance requirements are. Also very important, you need to make sure that as an owner operator truck driver you are compliant with the US Department of Transportation insurance requirements.
A common owner operator truck driver rookie mistake is to go with the first quote you get from an insurance agent. Take the time to get multiple quotes and do not over insure your truck. Insurance companies can provide coverage beyond the market value of your rig, but that does not necessarily mean they will pay you that amount in case of total loss collision. The first step is to find out what your truck’s market value is by calling two or three used truck dealers.
Once you have your truck’s market value, then find out what the price per thousands is to insure it. Many times the amount of what you paid for your truck is higher than the market value due to interests and other factors. Sometimes motor carriers like Status Transportation can provide primary liability and bobtail insurance when hiring owner operators, which can be convenient and many times cheaper because of the number of trucks insured through the company.
So before you go out there and start making calls let’s go over some terms about trucking insurance and not everyone understands.
Term #1 Liability Insurance: Primary liability vs. Bobtail insurance
This is by far the issue that causes the most confusion with owner operator truck drivers. Primary liability is with the DOT requires of anyone that has federal authority to haul goods. It’s 24/7 coverage for any vehicles listed on the policy. Owner operator truck drivers need to have non-trucking liability or bobtail insurance for when they are not under dispatch. In a nutshell non-trucking liability is for the personal use of a commercial vehicle. Liability is defined as insurance that pays other parties for injuries or damage to property that you caused.
In order to bridge the coverage gap, many independent truckers purchase bobtail or something known as non-trucking liability insurance. Bobtail insurance covers you and your semi truck when you’re not hauling a trailer or other load.
Term #2 Physical damage insurance
It’s 24-7 comprehensive and collision coverage for equipment owned by you. Just like on your personal automobile, it pays for repairs to your equipment due to cover loss such as accidents, fires, or even theft minus your deductible.
Your lender requires this insurance so the loan balance may be paid off in the event of a total loss.
Term #3 Cargo insurance vs Contingent cargo 
A motor carrier that hauls goods that don’t belong to them must carry cargo insurance or the shippers won’t let them have their goods. The full name of the coverage is actually motor truck cargo, it naturally pays the shipper minus the deductible for damage to the shipper’s goods when it is in your care custody and control. Contingent cargo insurance is coverage for a load that you may broker to another motor carrier and should their insurance fail to pay for a covered loss. Not every trucking company does brokerage but for the ones who do broker loads, they should carry this coverage which comes at a very modest price.
If you would like to learn more about our owner operator pay programs and bonus services at Status Transportation please call us at (407) 574-7990 and one of our recruiters will gladly answer all your questions.
