Driving on the highways and streets of America is a big responsibility. Every day, you take your life and the lives of others into your hands. If you drive any vehicle for personal reasons, you are legally required to have insurance.
If you drive a truck professionally, you will need a lot of insurance. If you drive a big rig across state lines or own a trucking company, the amount of insurance you will have to buy is quite large and mandated by the Department of Transportation.
How do I know if my trucks are regulated by the DOT?
You will have to comply with DOT rules if you own a trucking company and the vehicles fall into one of the following categories:
- A truck with a gross vehicle weight rating, gross combination weight rating, or gross vehicle weight or gross combination weight, of 10,001 pounds or more.
- A vehicle designed for transportation of more than 8 passengers for money.
- A vehicle designed for the transport of more than 15 passengers, not for compensation.
- A vehicle that is used for transporting hazardous material in a quantity requiring placarding.
When your trucks are under the authority of the DOT, you will have to get a DOT number to be issued the authority to operate. You must have insurance to get a DOT number.
How much insurance will I need?
According to Simplex Group, the type of insurance you will need will depend on the type of truck you have and the kind of hauls you take. There are several different types of insurance that any DOT-regulated truck must have.
Public Liability Insurance
Any driver must have liability insurance to cover expenses from an accident they might cause. A professional truck driver will not only need insurance for damage, they may cause another person and their vehicle. They will also need insurance for damages they may cause to the environment and the public in general.
The minimum amount of insurance required of a freight carrier that is over 10,001 pounds is anywhere from $750,000 to $5,000,000. The minimum will be determined by the type of cargo a vehicle is carrying. If a vehicle weighs under 10,001 pounds, the minimum amount of coverage it must carry will be $300,000 for non-hazardous freight.
Passenger vehicles must have between $5,000,000 and $1,500,000 of insurance for vehicles transporting less than 15 people.
Cargo Insurance
Any semi-truck may contain thousands of dollars worth of cargo. You must have cargo insurance to pay for anything that is lost, damaged, or stolen along the way. A minimum amount of $5,000 of cargo insurance for each vehicle or $10,000 per occurrence is required.
When you take on a new client, you will make a contract with them that will specify the amount of cargo insurance that you must have. Almost any contract guarantees cargo is insured for more than $10,000.
You will also need to appoint a processing agent, who is a representative that can accept legal papers for you in every state in which you operate. If you do not know someone in every state, don’t worry, there are companies specifically devoted to helping start-up trucking companies get compliant with the law. They can act as a processing agent for you.
The trucking industry is an exciting field, and you can always feel good about your job when you know you are getting supplies where they need to be. Compliance is difficult, but if you hire trained professionals, you will be on the road to success.
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