How Much Does Commercial Truck Insurance Usually Cost? Key Factors to Consider…

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With nearly 4 million commercial truck drivers on the road today, commercial truck insurance has become a big business. As a matter of fact, the need for commercial truck insurance and its oftentimes prohibitive cost is one of the primary factors that keep truck drivers from breaking away from their 9 to 5 driving jobs.

But how expensive is commercial insurance in reality? Is it really as bad as many think it is?

At the end of the day, the only way to know for sure how much commercial truck insurance will cost you is to shop for quotes. To help you get an understanding of what you’re likely to get quoted, below, we break down key factors that influence insurance rates in today’s market.

Commercial Insurance Costs Vary

There’s no single federal rate truck drivers will pay for a commercial truck or CMV insurance. Rates vary, sometimes substantially, based on a handful of elements that insurers will weigh when offering quotes.

If you’re looking for averages, you might pay anywhere from $2,000 to $18,000 per year on insurance. Determining where you fall in that spectrum comes down to the following:

Your Location

Bigger, busier cities will have bigger insurance rates. That’s a fact of life that steers many drivers towards cheaper markets when opening up their businesses.

On the positive side, if you’re operating in more expensive areas, chances are there is more opportunity to pull loads in those markets, which should more than make up your additional insurance spend.

Truck Type

Not all commercial trucks are created equal. Some are significantly more valuable than others and may present additional liability to insurers.

Knowing your truck’s value can help give you a sense of whether or not you’re likely to fall on the higher or lower end of the insurer’s ranges. Also, smaller trucks that are less likely to cause catastrophic damage during accidents will be insured at lower rates.

Partnerships

If you’re an owner-operator that’s pulling loads for another trucking company, you may be able to catch an insurance break. That’s because the company that’s subcontracting your loads usually needs to provide drivers under them with primary insurance coverage.

Confirm whether or not that insurance arrangement is the case with the trucking company passing your work. If it is, talk to your insurance provider about your arrangement and see if they need to sell you supplementary coverage rather than full coverage.

Driving Blemishes

When you get standard vehicle insurance, your driving record has a big impact on the rates you’ll pay. The same is true for when you get commercial truck insurance.

If you have accidents on your record that have occurred within the last five years, you can expect to pay exponentially more for your commercial insurance than if you have a clean record. The silver lining here is that accidents do fall out of consideration over time, so you can claw your way back to better rates by avoiding them in the future.

What You Carry

Commercial trucking insurance doesn’t just cover crash liability. It also covers your cargo.

Again, if you’re in an arrangement where you’re being subcontracted by another company, the company giving you work will probably provide your cargo insurance. If you’re working directly with a shipper, though, or through brokers, you’ll need cargo coverage of your own.

Cargo coverage will look very different if you’re pulling million-dollar loads versus loads that are worth tens of thousands of dollars. Always make sure you’re adequately insured to cover your cargo’s full value, no matter how much that coverage costs, as you never want to get caught without the protection, you need.

Shipper Requirements

As you start forming relationships with brokers and shippers in your trucking practice, you’ll start to notice that they may have coverage requirements in place you’ll need to meet before working with them. These requirements may be well over the coverage you’re already carrying.

The higher your coverage limits are, the more expensive your commercial insurance is going to be. On the bright side, shippers that require high coverage limits tend to have to pay more for their loads so that you may find a return on investment with these arrangements.

Typical Routes/Mileage

The more you drive your truck, the more likely you’ll be to get into an accident. Insurers appreciate that fact and will want to understand how many miles per year you’ll be putting on your truck and the routes you’ll be taking most often.

If you’re doing mostly short-haul work in quiet areas, expect lower rates. Variable long-haul work, on the other hand, will require more expensive policies.

Years of Experience

As you gain more experience driving, insurers will think of you as less of a liability. That’ll make it so they can quote you lower rates than they would if you were starting in the trucking industry.

Of course, if you have a lot of experience as a driver and your experience is filled with negative marks, you can expect to continue paying high rates. Remember, quality is always better than quantity.

Commercial Truck Insurance Doesn’t Have to Break the Bank or Your Dreams

If you have dreams of working for yourself as a truck driver but are worried about commercial truck insurance costs, don’t be. There are many flexible insurance providers out there that can work with your situation and get you on the road.

The hope is that, even with the burden of insurance, the increased income you’ll be making working for yourself will more than cover that burden.

Are you hungry for more general insight on commercial insurance? Do you have additional commercial insurance cost questions? Are you just curious to learn more about trucking?

If so, explore more insightful content on our blog.

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