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Owner-Operator Truck Insurance Cost: Everything You Need to Know

owner operator truck insurance cost
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Owner-operators are in a lucrative industry as there’s a high demand for long-haul transportation of goods across the country. To fully reap the benefits of this career, it’s important to square away your insurance. Obtaining the appropriate coverage at a good rate can protect you from liability and ensure the efficient operation of your company. Read on to learn more about the average owner-operator truck insurance cost and discover factors that can affect your monthly premiums.

What Type of Truck Insurance Is Necessary for Owner-Operators?

The type of truck insurance an owner-operator needs largely depends on how they run their business. Some professionals lease their vehicles through a motor carrier and operate them under its authority. While the lease payments qualify them for some coverage through the motor carrier, the owner-operator is responsible for obtaining the following types of insurance:

  • Workers’ compensation or occupational accident: Insurance that covers medical, disability, dismemberment, and death for on-the-job accidents.
  • Non-trucking liability: Covers property damage or bodily injury that occurs when you use the vehicle for non-commercial purposes (also known as unladen or bobtail insurance).
  • Physical damage: Protects vehicles during unexpected events like theft, vandalism, fire, and inclement weather.

Some owner-operators buy their vehicles instead of leasing them through a motor carrier. While this business model has advantages such as giving you more freedom over how you use your vehicles, you won’t have a motor carrier partner to provide coverage. In addition to workers’ compensation and physical damage insurance, you’ll also need to invest in the following types of insurance:

  • Commercial auto liability: Covers damages that your equipment causes to other people and their property and usually includes underinsured/uninsured motorist coverage.
  • Commercial general liability: Protects your company from exposures like litigation that may arise from day-to-day damages.
  • Cargo liability: Provides coverage for goods that become damaged during transit.

Do I Need Owner-Operator Truck Insurance?

If you’re an owner-operator, obtaining truck insurance through a motor carrier or buying it yourself is essential. In addition to allowing you to comply with state and federal laws, certificates of insurance ensure your trucking business can operate and establish relationships with reputable clients. Additionally, insurance protects your business from exorbitant costs in the event of an accident. So, even though insurance can be expensive it’s definitely worth the peace of mind it brings to your business.

What’s the Average Owner-Operator Truck Insurance Cost?

The average cost depends on which business model you use. Because owner-operators who own their vehicles have more insurance responsibilities, they tend to pay more for coverage. Their average owner-operator truck insurance cost is $12,000 to $20,000 per truck per year, or $1,000 to $1,667 per month. You can better understand where these numbers come from by looking at the average annual cost breakdown of different types of insurance:

  • Commercial auto liability: $8,000 to $14,000
  • Commercial general liability: $500 to $800
  • Cargo insurance: $400 to $1,200
  • Physical damage: $1,000 to $3,000
  • Workers’ compensation: $3,000 to $5,000

Owner-operators who lease their vehicles have fewer insurance responsibilities, meaning their premiums are typically less. They pay an average of $3,000 to $5,000 per truck per year, which includes premiums for physical damage and workers’ compensation insurance. Leasers also pay around $400 per truck per year for non-trucking liability insurance.

What Other Factors Affect Owner-Operator Truck Insurance Cost?

Whether you lease or own your vehicles has a big impact on your insurance costs, but several other factors can affect your monthly premiums. Here are a few of the most common that insurance providers use when determining your rates:

  • Type of vehicle: Insurance rates tend to be higher if your fleet consists of heavy-duty trucks. On the contrary, a fleet of lighter pickup trucks can be cheaper to insure because they’re easier to maneuver, cause less damage, and have cheaper repair costs.
  • Vehicle condition: Insurance providers also consider the condition of your current fleet by accounting for each vehicle’s year, make, model, declared value, and any operational issues.
  • Type of cargo: The more cargo you haul and the more dangerous or valuable it is, the higher your monthly premiums tend to be. For instance, insurance would likely be more expensive if your vehicles carry flammable substances or transport people.
  • Your operating radius: Long-haul trucking results in greater risks because the driver can become tired from being behind the wheel for long periods. Thus, you can expect rates to increase as your operating radius expands.
  • Your driving history: A clean driving record can help you obtain affordable insurance rates, as providers won’t see you as a risk. Even if you have minor traffic violations, they may increase your premiums.
  • Your company’s safety policies: Companies that enforce safety policies and maintain their equipment often enjoy lower rates than those that don’t prioritize the well-being of their fleets and employees.
  • Your financial history: If you have a good credit score and a history of being responsible with loan payments, you can take advantage of lower premiums.

How Can You Lower Your Truck Insurance Costs?

Being an owner-operator can be expensive even without the insurance costs, so you’re likely looking for ways to reduce your monthly premiums. Here are a few tips for securing lower rates:

  • Do your research. Providers use different formulas for calculating monthly premiums, so comparing rates can help you find the best deal.
  • Promote safety. Especially if you have a history of accidents, investing in additional training and equipment upgrades can demonstrate your company’s commitment to safety.
  • Pay a lump sum. You can save hundreds of dollars by paying a yearly lump sum instead of monthly premiums.
  • Look for discounts: Insurance companies may offer discounts for something as simple as having a valid commercial driver’s license for at least two years.

Whether you’re an owner-operator who owns their vehicles or leases them through a motor carrier, having the appropriate insurance is essential. Coverage protects you in the event of an accident and keeps your company in good standing with governing bodies. When shopping for the best rate, be sure to compare different providers, look for discounts, and consider paying a lump sum.

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

We’re here to help you simplify car care and save, so this post may contain affiliate links to help you do just that. If you click on a link and take action, we may earn a commission. However, the analysis and opinions expressed are our own.

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About the Author

FIXD Research Team

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

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