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What does Commercial Truck Insurance Cost?

Author: Jason Morrison | June 12, 2023

Edited by: Jason Morrison and Reviewed: Jason Morrison

Commercial trucks are used for a variety of occupations, from truck driving to garbage collection. If you drive a commercial truck, liability insurance is a must. But the cost of truck insurance can cut into your earnings, so it’s important to include it in the cost of doing business.

In this blog post, we delve into the factors that insurers consider when determining commercial truck insurance premiums, providing valuable insights to help you navigate this essential aspect of your trucking operations.

Primary Rating Factors That Can Influence Your Truck Insurance Cost

There is no one size fits all when it comes to truck insurance. A variety of factors influence the rates you pay, including your routes, the type of truck, and your own driving history. Here are some features that will determine how much you’ll pay.

USDOT Authority

If you own your truck, you’ll likely need a USDOT number. To get this number, you’ll have to show proof of insurance. But to get insurance, you’ll need to list the USDOT authority type for your operation.

The cost of truck insurance varies by USDOT authority for a couple of reasons. Leasing companies can secure group rates for their insurance, which means they’ll often see lower truck insurance costs than owner-operators, who are pricing insurance individually. Also, your driving history will be a factor. If you have speeding tickets, you’ll likely face rate hikes a leasing company wouldn’t.

Contractual Requirements

The Federal Motor Carrier Safety Administration (FMCSA) requires some commercial freight carriers to file federally. In that case, how much for truck insurance will depend on the nature of your business. Motor carriers and freight forwarders, for instance, must carry a minimum amount of liability insurance, which varies based on the materials transported and how much they weigh.

The cost of truck insurance can also increase if you add special coverages to your policy. Some additional coverages that can increase how much truck insurance is includes:

  • Physical damage coverage: This covers damage to your truck due to a collision, fire, or vandalism. It also covers loss due to theft.
  • Trailer interchange coverage: This covers any non-owned trailers you pull behind your truck.
  • Personal property coverage: If you have personal belongings in your truck that are lost or damaged, this kicks in to cover what your homeowners insurance doesn’t.
  • Supplemental towing and cleanup: This covers the cost to tow your rig and clean up any debris after an incident.

Cargo

When your truck is involved in an accident, what you’re towing comes into play. Say you’re towing a trailer full of combustible materials. An accident will be more devastating than if you were carrying a truckload of toilet paper.

For that reason, commercial truck insurance cost also depends on what you’ll be hauling. Your liability increases when you’re regularly transporting hazardous material, and the cost of truck insurance will reflect that.

Operating Radius

How broad is your route? Some truckers routinely drive thousands of miles a week, crossing from one end of the country to the other. Still, others stay within a defined region that could be as small as one major metropolitan area.

The cost of commercial truck insurance varies based on those distances. If you’re traveling from Texas to New York every week, you face different risks than someone who drives a truck around Dallas and its outlying areas day after day.

Vehicle Type

When you insure your personal vehicle, you’ll pay more if it’s a pricier model. The same goes for commercial trucks. The pricier your truck, the higher the cost of truck insurance will likely be.

But there’s an additional factor when it comes to truck insurance costs. Insurers also take a look at the weight of your vehicle. A large semi has the power to cause greater destruction than a pickup truck or step van. That’s how you might end up paying more than your buddy who applies for commercial truck insurance.

Driving History

When you price auto insurance for your personal vehicle, your driving record comes into play. Insurers calculate risk before taking on any new customer. A driver with a history of speeding tickets or accident claims is a higher risk than someone with a squeaky-clean driving record.

This risk assessment is even more important with a commercial policy. You’ll be not only driving, but hauling freight, and that extra weight makes your truck more powerful in an accident. For that reason, your driving history will be used to figure out the cost of truck insurance.

Location

Do you live in Louisiana or Maine? Why does it matter? The cost of auto insurance varies dramatically between those two states. In 2019, auto insurance was most expensive in Louisiana, at $1,557.22 per expenditure, on average. Compare that to Maine, which had the least expensive average expenditure, at $696.37.

The cost of truck insurance will be based on where you’re taking the policy. If you live in Louisiana, you’ll see higher rates than if you live in Maine.

What Does Commercial Truck Insurance Cost?

In 2022, the American Transport Research Institute conducted a survey of more than 95 carriers. The report was titled, The Impact of Rising Insurance Costs on the Trucking Industry. The report found that small fleets paid $0.125 per mile for insurance, while large fleets paid $0.037 per mile. This illustrates the discount larger carriers get.

A wide variety of factors go into estimating what you’ll pay for auto insurance. But here are some estimates:

  • The average liability insurance runs $2,500 to $5,000 annually per trucker.
  • Physical damage insurance is based on the vehicle value. On average, this is between $2 and $3 per thousand each month, so for a $50,000 truck, you’d pay $100 to $150 per month for this particular add-on.
  • Trailer interchange coverage will run about $110 per month.
  • Cargo coverage can range widely depending on the nature of the cargo, the state where the policy was written, and the distance it’s being carried. For cargo insurance, you can pay anywhere from $425 to $2,000.

Does cheap commercial truck insurance exist?

Running a profitable business relies heavily on keeping overhead low. Insurance is part of that overhead. Yes, the cost of truck insurance can add quite a bit to your bottom line, but there are a few things you can do to reduce that cost.

  • Choose high deductibles: Yes, you’ll pay more out of pocket if you have a claim, but the reduced premiums might be worth it.
  • Look for discounts: Some insurers will give you a discount for bundling or being in business for a while. Check for these when pricing policies.
  • Pay annually: Yes, it can seem cheaper to pay monthly, but if you can swing it, you can save money by paying your premiums when the policy renews, which may be once a year or every six months,

The cost of truck insurance is part of running your own trucking business. Although it can be expensive, it’s worth it for the peace of mind it will give you as you’re building your business.

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