25 Truck Insurance Terms You Should Know + FAQs

When you spend your days on the road, commercial truck insurance becomes more important than ever. Protecting your business is the best way to ensure you are operating smoothly for years to come. If you’re a driver or business owner looking to learn more before you secure a policy, you’ve come to the right place. This post will address all of the truck insurance terms and frequently asked questions you should know.

 

Have more questions? Don’t hesitate to contact our team at American Insurance Brokers for help understanding all of your truck insurance needs.

25 truck insurance terms to know

 

Consider this your very own personal trucking insurance dictionary. These are truck insurance terms you should be familiar with as you navigate choosing a policy.

 

1. Bobtail/non-trucking liability insurance

 

Protection for your truck while you are off the clock. In general, the company you haul for only covers your insurance while you are under dispatch. This type of coverage gives you protection during other times, such as when you are getting the truck washed or repaired.

 

2. Commercial auto liability

 

In the event that you cause an accident, bodily injury coverage may help cover medical expenses and lost income for the other party. This type of policy may also help cover legal fees if you are facing a lawsuit because of the accident.

 

3. Carrier

 

In the commercial trucking industry, large 18-wheelers are commonly referred to as carriers. You will also often hear this term applied to a company that operates these trucks. Simply put, a carrier is a company responsible for transporting products or people.

 

4. Collision coverage insurance

 

A type of insurance used to pay for repairs or replacement of your truck if you crash into another vehicle or object, such as a tree, wall, or fence.

 

5. Deductible

 

The amount of money you must pay before your insurance company will pay a claim (specified in your policy).

 

6. Federal Motor Carrier Safety Administration (FMCSA)

 

The Federal Motor Carrier Safety Administration (FMCSA) was established within the Department of Transportation in 2000.

 

Formerly a part of the Federal Highway Administration, the Federal Motor Carrier Safety Administration’s primary mission is to prevent commercial motor vehicle-related fatalities and injuries. They are one of the main regulatory authorities for interstate trucking. The Administration works with federal, state, and local enforcement agencies, the motor carrier industry, and labor and safety interest groups.

 

7. Garage keeper’s liability insurance

 

Coverage that helps you pay to repair or replace a vehicle you don’t own. This situation generally happens when a vehicle is left in your care, custody, or control as a garage or towing operation.

 

8. General liability insurance

 

A type of insurance that can provide coverage if an issue occurs that isn’t directly related to operating your truck. These instances are generally related to customer injuries or property damage, as well as advertising conflicts. In short, this insurance can help protect your business from costly lawsuits.

 

9. Gross vehicle weight (GVW)

 

This is the fully loaded weight of a commercial truck. It includes both the weight of the vehicle itself, as well as the maximum load it can carry. Insurers use this as a rating factor for insurance. The heavier the vehicle, the longer it takes to stop, which can lead to more accidents. As a result, a higher GVW may lead to higher insurance premiums.

 

10. ICC/MC authority

 

Before you may legally haul regulated cargo, you must get permission from the Federal Motor Carrier Safety Administration by obtaining an MC number. Similar to the phased-out ICC authority, MC authority grants you the ability to transport regulated freight across state lines.

 

Any vehicle operating for hire in interstate transportation of regulated freight or passengers must comply. The minimum insurance coverage required depends on the Gross Vehicle Weight Rating (GVWR).

 

11. Interstate trucking

 

Interstate trucking is one of the truck insurance terms that define where you haul cargo and passengers. In general, it applies when you haul cargo or passengers across state lines. Specifically, interstate trucking refers to trucking activities that occur:

 

  • Between a place in a state and a place outside of such state (including a place outside of the United States)
  • Between two places in a state through another state or a place outside of the United States
  • Between two places in a state as part of the trade, traffic, or transportation originating or terminating outside the state or the United States

 

12. Intrastate trucking

 

If your trucking activities occur exclusively in your business’s home state, then your business does intrastate trucking.

 

13. Medical payments (MedPay) insurance

 

An essential type of coverage that is meant to cover medical expenses. Regardless of who caused an accident, this coverage is extended to you and any other passengers in your vehicle who are hurt during an accident.

 

14. Motor truck cargo insurance

 

Insurance coverage for the cargo you are hauling for a shipper. This usually extends up to a set limit determined during the policy purchase. Federal law does not require it. However, some companies will request it.

 

15. On-hook towing insurance

 

For trucks offering on-hook towing services, this coverage will pay to repair or replace a vehicle you don’t own if it is damaged while you are towing or hauling. This may be due to a collision, fire, theft, explosion, vandalism, or other incident.

 

16. Owner-operator

 

This type of trucking involves an individual or company that owns their own vehicle and transports their own goods.

 

17. Physical damage insurance

 

This is a general term for an entire group of insurance coverage options that protect your truck. This may include collision insurance, as well as your choice of full comprehensive insurance or fire and theft with combined additional coverage (CAC) insurance.

 

18. Premium

 

The amount of money you or your business must pay for an insurance policy. Failure to pay could result in a cancellation of the policy and loss of coverage.

 

19. Primary liability insurance

 

Coverage to protect you from the cost of vehicle damage or injuries to other people in a trucking accident. Most tractor-trailers require $750,000 of this type of coverage for operation. Other coverage amounts will vary depending on individual state laws.

 

20. Radius

 

A term to describe the usual distance a commercial truck will travel from its garage address. Also commonly referred to as the radius of operation, this number is used to calculate the cost of an insurance policy.

 

21. Storage location insurance

 

Designed for business owners who offer towing services or operate service stations, this coverage protects a customer’s vehicle when you are keeping it at a covered location. This may be for parking, for storing, or to perform service and repairs.

 

22. Trailer interchange insurance

 

Typically filed under the classification of physical damage insurance, this is an important type of coverage for trailers being pulled under a trailer interchange agreement. This type of insurance may protect you in the event of damage caused by collision, fire, theft, explosion, vandalism, and more.

 

23. Uninsured/underinsured motorist insurance

 

This type of insurance generally contains multiple coverages that work together. Simply put, it protects you in the event of an accident with someone who is either completely uninsured or not carrying enough insurance.

 

24. Vehicle Identification Number (VIN)

 

A unique 17-digit number assigned by a vehicle manufacturer at the plant where the vehicle was made. Insurers use this number to verify exactly which vehicle requires insurance on a policy. This number is also commonly used to research the history of a vehicle.

 

25. Workers’ compensation

 

Commonly referred to as workers’ comp, this is a mandatory type of insurance carried by a range of different businesses. It may cover medical costs and even a portion of lost wages for an employee who is hurt while on the job. It may also protect companies from lawsuits related to workplace conditions.

Truck Insurance FAQs

 

With more than 40 years in the industry, American Insurance Brokers serves as a trustworthy source for fleets big and small.

Our goal goes beyond finding the right insurance policy for your business. We truly want to help you understand the process as a whole. Now that we’ve covered many common truck insurance terms, here are answers to some frequently asked questions we receive from new customers.

Find in-depth answers to even more questions on our frequently asked questions page.

 

What kind of insurance does a trucking company need?

 

Commercial truck insurance is not one-size-fits-all. Different situations call for various types of coverage. Reading through the truck insurance terms above can help you determine the most common occurrences you find yourself in.

If you’re wondering “What kind of insurance does a trucking company need?” it’s best to reach out to American Insurance Brokers. We can help you find the right policy to fit your needs. This will ensure you have the protection you need wherever your route takes you!

 

Is my personal auto insurance policy enough?

 

Definitely not. Even independent truckers won’t find the coverage they need in a personal auto insurance policy. In fact, many companies will cancel your personal policy if you are using your vehicle for business purposes.

Even though some of the common truck insurance terms in this article also apply to personal auto insurance, they are not the same. Finding robust commercial truck insurance is the only way to protect yourself and your business.

 

How much will truck insurance cost?

 

The cost of truck insurance varies greatly depending on many factors. Are you an owner-operator with a permanent lease? What do you haul? Do you typically travel across state lines?

All of these questions are contributing factors when it comes to your business insurance cost. At American Insurance Brokers, we work hard to find you the best price.

 

What do I need to know about regulatory filings?

 

Filings are an important part of staying in compliance with both state and federal trucking laws. They demonstrate that a commercial vehicle has met the minimum requirements when it comes to various types of coverage. These may be required due to your GVW (gross vehicle weight) and the cargo you carry, and whether you transport passengers.

At the end of the day, when you hit the road, you want to have peace of mind knowing you’re in compliance with the law. Our team members at American Insurance Brokers can help.

 

How do I find the best insurance for my trucks?

 

Knowing the definitions of common truck insurance terms is a great start, but the world of commercial insurance is complex, and the best option is to get help from an expert.

When you need reliable insurance and high-quality customer service, American Insurance Brokers delivers. We set the standard in the South because we have a deep understanding of the region’s trucking industry. From tow trucks to car carriers, we help a variety of commercial vehicle businesses secure the best insurance policies.

Our comprehensive insurance options are available in the following states:

 

Contact us to discuss your insurance needs or use our online form to request a free, no-obligation quote.