Motor Carrier Insurance: What Fleets Need To Know

Motor carrier insurance is a type of insurance designed specifically for the trucking industry. It covers for-hire truckers and protects their business and investment. Motor carrier insurance is mandatory and includes liability insurance, which covers bodily injury and property damage. The Federal Motor Carrier Safety Administration (FMCSA) requires commercial auto liability insurance for motor carriers and freight forwarders, with minimum insurance requirements depending on the type of cargo being transported and the vehicle's weight. In addition to insurance, applicants for motor carrier authority must submit various forms to the FMCSA, including those related to public liability, cargo insurance, and legal process agents.

Motor Carrier Insurance Requirements

Motor carrier insurance is designed to protect your trucking business. It is a requirement for motor carriers to have insurance and submit the proper insurance forms before they can be issued with a motor carrier authority by the Federal Motor Carrier Safety Administration (FMCSA).

The FMCSA requires commercial auto liability insurance, which covers accidents where the motor carrier or their driver are at fault, resulting in damage to another person or their property. The amount of liability insurance required depends on the goods being hauled. The FMCSA outlines the following requirements:

• For-Hire Interstate General Freight Carrier
• For-Hire & Private Carriers of Oil
• For Hire & Private Carriers of Other Hazardous Materials

The FMCSA has concluded that these limits are too low and has indicated that there will be an increase in these minimums in the coming years.

Motor carriers who transport household goods, such as moving companies, are mandated to purchase cargo insurance. The minimum coverage required is $5,000 per vehicle and $10,000 per occurrence. Even if a motor carrier does not transport household goods, it is still advisable to get cargo insurance as most shippers and brokers will only do business with those who have it.

Physical damage insurance and general liability insurance are not mandatory to obtain a motor carrier authority, but they are likely to be required.

To operate with their own authority, motor carriers must often meet various financial responsibility regulations based on the weight of the vehicles operated and the commodities hauled.

The following forms are required by the FMCSA:

• BMC-91 or BMC-91X: This form pertains to public liability insurance, including property damage, environmental restoration, and bodily injury. It is mandatory for all carriers transporting people or goods across state lines.
• BMC-34 or BMC-83: These forms are necessary for household goods motor carriers and household goods freight forwarders. They relate to cargo insurance.
• BMC-84 or BMC-85: These forms are for freight forwarders and brokers of freight, requiring proof of insurance of at least $75,000.
• BOC-3: This form is filed by process agents on behalf of the carrier and is mandatory for interstate transportation companies.
• MCS-90: This form is a hazmat carrier safety permit, required for both interstate and intrastate trucking companies.

To show proof of insurance to the FMCSA, insurance companies must submit the required filings online.

Motor Carrier Truck Insurance Coverages

Motor carrier insurance is designed specifically for for-hire truckers and is important for protecting their business. The motor carrier policy was introduced by the Insurance Services Office, Inc. (ISO) in 1993 to address the needs of the trucking industry.

Motor carrier insurance coverages can be divided into two categories: mandatory and optional.

Mandatory Motor Carrier Truck Insurance Coverages

Liability insurance is a mandatory motor carrier insurance coverage that pays for damages caused to other people and their property. This includes bodily injury insurance and property damage coverage. Liability insurance is legally required by the FMCSA and applies to all motor carriers.

Optional Motor Carrier Insurance Coverages

Optional coverages are important to ensure the best protection for your truck when you're on the road. Physical Damage coverage can pay for repairs to your truck if it's damaged in an accident, whether due to a collision or other causes like a falling tree branch. This can include Collision insurance, Comprehensive insurance, or Fire and Theft with Combined Additional Coverages.

Medical Payments coverage is available in select states and can pay medical bills for the driver and any passengers in the truck in case they are hurt in an accident or auto-related injury.

Uninsured Motorist coverage can pay for injuries and damages caused by drivers without insurance or with insufficient insurance.

Motor Truck Cargo insurance, also known as Cargo, provides coverage for freight or commodities hauled by a for-hire trucker. It covers liability for cargo that is lost or damaged due to fire, collision, or striking a load. This insurance is required by an increasing number of risk managers. It can also cover the costs of removing debris and pollutants if a load is accidentally dumped, as well as legal expenses and freight charges for undelivered loads.

Other optional coverages include Bobtail/Non-trucking Liability, General Liability Insurance, and an Umbrella policy to cover any gaps in your existing coverage.

Motor Carrier Insurance Costs

Motor carrier insurance is designed for for-hire truckers and offers protection for their business. It is a mandatory coverage that pays for damages caused to other people and their property. The cost of motor carrier insurance depends on various factors, and there is no fixed price. However, here is a detailed breakdown of the costs involved:

Mandatory Motor Carrier Truck Insurance Coverages:

Liability insurance is a mandatory coverage that includes Bodily Injury insurance and Property Damage coverage. This insurance covers the damages caused to other people and their property. The Federal Motor Carrier Safety Administration (FMCSA) mandates a minimum liability limit of $750,000 CSL (Combined Single Limit) or $1,000,000 CSL for truckers requiring a federal filing. The CSL is the maximum amount an insurance company will pay for bodily injury and property damage combined per incident.

Optional Motor Carrier Insurance Coverages:

While liability insurance is mandatory, there are several optional coverages that truckers can consider to enhance their protection:

• Physical Damage coverage pays for repairs to the truck in case of accidents or damage caused by falling objects. This coverage typically costs around $3 per month per $1000 of the truck's value.
• Medical Payments coverage is available in select states and covers medical bills for the driver and passengers in case of accidents or auto-related injuries.
• Uninsured Motorist coverage pays for injuries, damages, and, where available, vehicle repairs caused by uninsured or underinsured drivers.
• Motor Truck Cargo coverage pays for damages to the cargo being hauled. This coverage can range from $425 to $2,000 per year, depending on the policy limits and the type of goods transported.

Average Costs:

The average cost of motor carrier insurance varies depending on the type of trucking business. For-hire transport truckers, who haul goods such as general freight and autos, have a national average monthly cost ranging from $736 to $1,125. On the other hand, for-hire specialty truckers, who specialize in niches like garbage, septic waste, or logging, have a lower national average monthly cost of $736. These figures are influenced by factors such as driving history, type of vehicle, operating radius, location, storage, cargo, and deductible.

Additional Costs:

In addition to the motor carrier insurance coverages, there are other costs that truckers may need to consider, such as:

• Non-Trucking Liability Insurance (also known as "Bobtail" or "Unladen" insurance), which covers property damage or bodily injury when the truck is not being used for business purposes. This coverage typically costs around $40 per month.
• Occupational Accident Insurance, which provides coverage for medical, disability, death, and dismemberment benefits for accidents that occur on the job. This insurance can cost between $1,500 and $2,500 per year.
• Workers' Compensation Insurance, which covers medical and financial benefits for employees who suffer work-related injuries or illnesses. The cost of this insurance varies based on state regulations, profession, number of employees, and claims history.

It is important to note that these figures are estimates, and the actual cost of motor carrier insurance can vary depending on various factors and the specific needs of the trucking business.

FMCSA Insurance Requirements

Motor carrier insurance is designed specifically for for-hire truckers and is important for protecting their business. The Insurance Services Office, Inc. (ISO) introduced the motor carrier policy in 1993 to address the needs of the motor carrier (i.e., trucking) industry.

The Federal Motor Carrier Safety Administration (FMCSA) has specific insurance filing requirements that applicants for motor carrier authority must meet. These requirements include having the necessary insurance and legal process agent documents on file before obtaining operating authority. The FMCSA outlines the following insurance filing requirements:

Public Liability Insurance:

• Bodily Injury: Coverage for injuries caused to other people.
• Property Damage: Coverage for damages caused to other people's property.
• Environmental Restoration: Coverage for environmental clean-up and restoration in the event of an accident.

Freight Forwarder Insurance:

• Non-vehicle operating freight forwarders may be exempt from this requirement.
• Freight Insurance: $750,000 to $5,000,000, depending on the commodities transported. $300,000 for non-hazardous freight in vehicles under 10,001 lbs.
• Passenger Insurance: $5,000,000 for vehicles with a seating capacity of 16 or more passengers. $1,500,000 for vehicles with 15 or fewer passengers.

Cargo Insurance:

$5,000 per vehicle and $10,000 per occurrence.

Other Requirements:

• BMC-91 or BMC-91X: Additional forms required for specific carriers.
• Household Goods Motor Carrier: Special requirements for carriers transporting household goods.
• Surety Bond: $75,000 amount required.
• Trust Fund Agreement: $75,000 amount specified.
• Service of Process Agents: Requirements for legal process agents.

The FMCSA provides detailed instructions for submitting insurance forms, including electronic filing options for insurance companies and financial institutions. It is important for applicants to ensure consistency in the business name and address across all filings to avoid rejection.

Motor Carrier Insurance Quotes

Motor carrier insurance is designed for the trucking industry, specifically for-hire truckers. It is a mandatory type of insurance coverage that pays for damages caused to other people and their property.

The Federal Motor Carrier Safety Administration (FMCSA) requires applicants to have commercial truck insurance and submit the proper insurance forms before they are issued a motor carrier authority. The FMCSA requires commercial auto liability insurance, with insurance coverage ranging from $750,000 to $5,000,000, depending on the type of cargo being transported.

The Insurance Services Office, Inc. (ISO) introduced the motor carrier policy in 1993 to address the needs of the trucking industry. The policy covers auto liability, trailer interchange, and auto physical damage. It is applicable to all types of motor carriers, including for-hire, private, or a combination of both.

When obtaining motor carrier insurance quotes, it is important to compare prices from multiple agents to find the best rates. Online tools can assist in this process by bringing multiple agents together to compete for your policy. It is also recommended to ask about discounts, as some companies offer lower prices to drivers with a CDL or motor carriers that have been in business for over three years.

In addition to the cost of insurance, it is crucial to consider the types of coverage offered. Mandatory coverages include liability insurance, which covers bodily injury and property damage. Optional coverages include physical damage, medical payments, uninsured motorist, and motor truck cargo.

By comparing quotes, taking advantage of discounts, and selecting the appropriate coverages, motor carriers can find the best insurance protection for their business while keeping costs manageable.

Frequently asked questions