Truck insurance.

[Super 8]

I'm wondering what kind and how much insurance O/O's have to carry for their business, and what a general cost is?

Thanks

[GMAN]

If you are talking about an owner operator who is leased to a carrier, all you need to carry is bobtail or unladen liability. That covers you when you are not pulling a company trailer. You may also want to carry comprehensive or collision, which covers your truck. Comprehensive rates seem to run from 2 1/2-4 1/2% of the stated value of your equipment. Most carries to whom you lease will also require you to have workers comp or an occupational accident policy. You can get an occ policy for about $140-150/month. Workers comp rates can vary from one state to another.

If you mean insurance when you run your authority, then the minimum you need to carry is $1 million in auto liability and $100,000 cargo. That is more than is required by the feds, but in order to book a load with a broker or shipper, these are the usual minimum requirements. These rates can vary widely depending on where you live, where you plan on running, type of freight hauled, MVR and credit. I have a very good rate. I am paying about $3,700 for $1 million liability and $100,000 cargo. But, I have a good safety record and no claims. I know others who pay around $6,000/year. I have heard of others who pay over $12,000/yr. Starting out I would expect a rate somewhere between $6,000-8,000/yr. Your best bet would be to check around for rates. There are a number of variables that can affect your rates.

[Musicman]

Just renewed today. The Buckner Company (out of Utah) got me a quote with Northland for $6,459. That's for $1,000,000 Primary Liability, $150k Cargo (including reefer breakdown), $50k physical damage on my tractor, $30k physical damage on my reefer. OOIDA wanted nearly $10k three years ago for the same coverage (somewhat higher physical damage though). Keep in mind the fact that we haul produce and frozen foods makes my cargo rate considerably higher than somebody who was just pulling a box. My rates could be a little lower but my co-driver hasn't been driving for at least seven years. Those rates are with no citations in the last seven years, no at-fault accidents ever and no claims at all in the last three years. In my not-so-humble opinion, GMAN's estimate might be on the low side for a new carrier, but I could be wrong.

[GMAN]

Just renewed today. The Buckner Company (out of Utah) got me a quote with Northland for $6,459. That's for $1,000,000 Primary Liability, $150k Cargo (including reefer breakdown), $50k physical damage on my tractor, $30k physical damage on my reefer. OOIDA wanted nearly $10k three years ago for the same coverage (somewhat higher physical damage though). Keep in mind the fact that we haul produce and frozen foods makes my cargo rate considerably higher than somebody who was just pulling a box. My rates could be a little lower but my co-driver hasn't been driving for at least seven years. Those rates are with no citations in the last seven years, no at-fault accidents ever and no claims at all in the last three years. In my not-so-humble opinion, GMAN's estimate might be on the low side for a new carrier, but I could be wrong.

You are correct, a new carrier would not be able to get the rates that I get on insurance. My insurance agent told me that he has never seen such a low rate than I was given. But, I have a good track record with no claims, too. Starting out a new carrier will not have any sort of track record for the insurance company to check. It sounds like you got a good rate for all the extra's you included. Some who have just gotten their authority have been able to get insurance for the basics ($1MM liability and $100M cargo) as low as about $6,500 or so, but others have gotten rates over $12,000 for the same coverage. There are a number of factors which go into your rate. Where you base, where you run and what you haul are only 3 factors which come into play. He really needs to call around and see what rate he can get. I have had Northland for several years. No other insurance company has been able to beat their rate for me. However, I have spoken to a couple of other people who got better rates from other companies.

[Musicman]

I have had Northland for several years. No other insurance company has been able to beat their rate for me.

They are one of the few commercial companies who will take an applicant's credit score into consideration.

[GMAN]

They do check credit. I have found that there are a number of insurance companies who check credit before quoting a rate. I think too many companies have access to our credit file. One's credit score should not have anything to do with our premium. The only consideration should be your mvr, safety record and experience. I am not complaining about my premium, but credit still should not be a consideration when it comes to our insurance.

[Musicman]

My agent at Buckner only asked for my social after she didn’t like the rates she was being quoted… even from Northland whom I’ve been with for three years now. After she submitted my Social Security number to Northland, they came down almost $1,500 on their quote.

They claim those with better scores are less likely to be involved in at fault accidents. I do see some logic in that thinking. Those who lead responsible lives would most likely have better credit than those who are irresponsible. Being responsible with your money matters might indicate a trend that would carry over to other areas of one's life, perhaps even driving.

[GMAN]

That is the way it was explained to me with the credit check. I still think it is none of their business. If you have been in business for several years and not had any claims then that should be their own consideration. I could more readily understand it if it was a new company with inexperienced drivers. But, not for those who have been in the business for some time. My homeowners and auto insurance also checks credit. It is no wonder we have a problem with identity theft.