No matter how long you’ve had your CDL, starting a trucking business and becoming your own boss is always an attractive option. But with the increased freedom of being an owner-operator comes a host of complicated duties. The most pressing may be acquiring insurance appropriate for your operation’s needs. Here is a brief guide to insurance options for new owner-operators.
What Types of Insurance You Need
Cargo
Because owner-operators are entirely responsible for a load while it’s in their possession, it’s crucial to have comprehensive cargo insurance. Should anything happen to the cargo while it’s under your care, this insurance will protect you from having to pay enormous damages for a lost, damaged, or stolen load. Common cargo insurance plans offer coverage for damage caused by accidents, weather and natural disasters, theft and vandalism, and water.
Liability
There are two main types of liability insurance, and owner-operators should always have both:
- Auto Liability: Protects you in the case of an at-fault accident. This covers medical bills and vehicle repair or replacement. The Federal Motor Carrier Safety Administration generally requires a minimum of $750,000 of freight insurance, but you may need more depending on your cargo.
- Motor Truck General Liability: Covers your operation in the case of business-related accidents not directly involving the operation of the truck. This might include injuries incurred while unloading the truck, libel, or fires caused by operator error.
Physical Damage
Not only must you insure your cargo, but you also need insurance for your vehicle itself. Physical damage insurance is just like the car insurance that you need when driving your private vehicle, and it covers repairs and losses in the case of collisions, break-ins, and fires. If you want coverage from a wider range of damages, you can also get comprehensive damage insurance.
How to Keep Insurance Costs Low
As with other vehicle insurance, the best way to ensure a low rate is to maintain a clean driving record, both while using your CDL and while driving for private purposes. Insurers may also inspect your truck for appropriate safety signage and features, like fog lamps and deer guards.
If you’re a new driver and want to jump directly into owning your own practice, it may be better to wait and build experience first. Many insurance companies refuse to cover drivers with less than three years of experience, and those who do offer coverage often charge prohibitively high rates.
If you’re looking to break into the trucking industry, start with Hamrick Schoolin Medina, OH. This accredited and licensed trucking school has offered CDL classes for over 40 years, and their instructors draw from their on-the-road experience to give high-quality career training. Learn about their financial aid programs online, and call (330) 239-2229 for questions about enrollment.
- OH Reg. #2057
- ODPS License #1439-2369