31 Truck Insurance Terms You Should Know + FAQs

Commercial truck insurance is important for your career and business success when you spend a lot of time on the road. Protecting your business is the best way to ensure you are operating smoothly for years to come.

Whether you’re a driver or a business owner, seeking knowledge before securing a policy is essential. This article aims to help you understand common truck insurance terms. It will also help address frequently asked questions to assist you in making informed decisions.  

Have more questions or need assistance in understanding truck insurance requirements? Please don’t hesitate to contact the team at American Insurance Brokers. We’re here to help you navigate the complexities of truck insurance. 

31 Truck Insurance Terms to Know

Consider this your very own personal trucking insurance dictionary. These are truck insurance terms you should know to find the best policy for you. 

1. Bobtail Insurance 

If you plan to use your truck for business and personal reasons, you need bobtail insurance.  

Bobtail insurance covers driving without a trailer or cargo attached to your truck. It will typically go into effect when you are off-duty or driving your truck for personal reasons. If an accident, injury, or property damage occurs during non-business trips, bobtail insurance has you covered. 

People commonly refer to Bobtail insurance as non-trucking liability insurance.  

2. Carrier 

A carrier is a business or individual that engages in the commercial transport of goods. They are directly responsible for the safe and efficient transport of cargo. To operate, carriers must follow trucking regulations and maintain all required insurance and licensing. 

3. Certificate of Insurance 

A certificate of insurance is a document that provides proof of insurance coverage. It contains details on the insurance policy, coverage limits, and effective dates. 

4. Collision Coverage Insurance 

Collision insurance covers damage to a truck or fleet after an accident with another vehicle or object. It helps you pay for any repairs and replacements required after an incident – up to the policy’s limits – regardless of who is at fault. 

5. Commercial Auto Liability 

Commercial auto liability is a type of insurance that protects businesses or individuals who own vehicles for commercial use.  

If your commercial vehicle is involved in an accident, this coverage is crucial in reducing your financial losses. Commercial auto liability covers liability claims, including injuries or damages, as well as legal defense costs. 

6. Deductible 

A deductible is the amount of money you are responsible for paying before your insurance company covers the remaining costs. Your insurance policy will determine and provide this amount up front. 

7. Endorsement 

An endorsement is any modification or addition made to an insurance policy that changes its terms or coverage. It can either expand or restrict coverage based on the need of the insured. 

8. Environmental Liability Insurance 

Environmental liability insurance covers claims for pollution or environmental damage caused by a trucking company. This includes events like fuel spills or hazardous material leaks.  

9. Federal Motor Carrier Safety Administration (FMCSA) 

The Federal Motor Carrier Safety Administration (FMCSA) governs the safety of commercial motor vehicles and the trucking industry as a whole. Its job is to prevent commercial vehicle fatalities, injuries, and accidents through safety awareness, regulations, and programs. The FMCSA, under the United States Department of Transportation (DOT), manages interstate travel for commercial trucks, buses, motor coaches, and carriers in the US. 

10. Garage Keeper’s Liability Insurance 

Garage keeper’s liability insurance protects businesses that engage in the care, custody, or control of vehicles. Examples of such businesses include auto repair shops and parking facilities. This insurance pays for any damage or loss when a vehicle is in the business’s care or custody. 

11. General Liability Insurance 

General liability insurance provides protection to businesses in the event of injury or damage caused by their operations, products, or premises. It is a crucial form of insurance for many businesses, protecting them from financial losses resulting from legal claims. 

12. Gross Vehicle Weight (GVW) 

Gross vehicle weight (GVW) is the maximum allowable weight of a vehicle as determined by its manufacturer. It includes the weight of the vehicle and its passengers, cargo, fuel, and any other equipment or accessories. 

13. ICC/MC Authority 

ICC/MC Authority is the regulatory or operating authority granted by the Federal Motor Carrier Safety Administration (FMCSA). Carriers must obtain and maintain this authority to stay compliant and legally engage in interstate commerce.   

14. Interstate Trucking 

Interstate trucking is the transport of goods by commercial trucks across state lines.  

15. Intrastate Trucking 

Intrastate trucking is the transportation of goods within a single state. It differs from interstate trucking in that the movement of cargo only occurs within the borders of a state. 

16. Loss Run Report 

A loss run report is a record of the losses or claims filed under an insurance policy. It shows the full history of claims and their related costs. 

17. Medical Payments (MedPay) Insurance 

Medical payments (MedPay) insurance covers medical expenses resulting from car accident injuries. MedPay kicks in no matter who is at fault for the incident. It is an optional coverage that can be added to your existing policy. 

18. Motor Truck Cargo Insurance 

Motor truck cargo insurance is a type of insurance coverage that protects goods or cargo being transported by commercial trucks. In the event that cargo is lost or damaged, motor truck cargo insurance provides financial reimbursement to the trucking company or owner-operator.  

This form of insurance is also referred to as cargo insurance or motor cargo insurance. 

19. On-Hook Towing Insurance

On-hook towing insurance is a type of insurance that covers businesses or individuals that provide towing services. It protects vehicles that are in the care, custody, or control of the tow truck operator.  

This form of insurance is also referred to as tow truck insurance or tow cargo insurance.  

20. Owner-Operator 

An owner-operator is an individual who owns and operates their own trucking business.  

21. Physical Damage Insurance 

Physical damage insurance is a type of insurance that covers the physical damage or loss of a commercial vehicle. It covers any damage resulting from collision, theft, vandalism, and other common incidents.   

22. Premium 

A premium is the amount of money a business or individual must pay to an insurance company in exchange for coverage. It is the cost to purchase and keep an insurance policy. 

23. Primary Liability Insurance 

Primary liability insurance is a type of insurance that protects businesses or individuals against legal liabilities, including bodily injury or property damage to third parties. It is a crucial form of coverage for businesses or individuals that operate commercial trucks. Primary liability insurance can cover the financial and legal implications of accidents resulting in injury or damage.  

24. Radius 

A radius is a geographical area where a trucking company or driver operates. It is the maximum distance from a defined point that a truck is allowed to commercially operate. 

25. Storage Location Insurance 

Storage location insurance is a type of insurance that covers the property and liabilities of storage facilities or warehouses. In the event of damage or theft, it can protect the warehouse owner from financial ruin. 

This type of insurance is also commonly referred to as warehouse insurance or storage facility insurance.  

26. Trailer Interchange Insurance 

Trailer interchange insurance covers trailers owned by someone else, not the insured party. Trucking companies often swap trailers, and this coverage safeguards against any responsibility that may arise from the exchange. 

27. Umbrella Insurance 

Umbrella insurance provides additional coverage beyond the limits of your primary liability insurance. In the event of catastrophic claims, it provides you with higher liability limits and broader coverage. 

This type of insurance is also commonly referred to as excess liability insurance.  

28. Underwriting 

Underwriting is the process of evaluating and assessing risks with insuring a trucking company. Underwriters work on behalf of the insurance company to determine the coverage eligibility and insurance premiums required from the insured. 

29. Uninsured/Underinsured Motorist Insurance 

Uninsured/underinsured motorist (UM/UIM) insurance is a type of insurance that protects those who collide with a driver who holds little to no insurance coverage.  

30. Vehicle Identification Number (VIN) 

A vehicle identification number (VIN) is a unique 17-digit code assigned to all types of vehicles. Each unique VIN provides information on the vehicle’s manufacturer, model, year, and history.  

Insurers use this number to verify exactly which vehicle requires insurance on a policy.

31. Workers’ Compensation 

Workers’ compensation is insurance for trucking industry employees who get hurt or sick because of their job. It protects both employees and employers, covering the medical and financial support required to care for the injured worker. It also protects the employer in the event of a lawsuit related to the workplace claim. 

Truck Insurance FAQs

With more than 40 years in the commercial trucking 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. Depending on the location and nature of your trucking business, you may have unique needs for coverage. The following types of insurance, also defined above, are the most crucial for your business operations:  

• Primary liability insurance 
• Physical damage insurance 
• Cargo insurance 
• Workers’ compensation 
• General liability insurance 

• Umbrella/excess liability insurance 
• Bobtail insurance 
• Trailer interchange insurance 
• Environmental liability insurance 

When deciding what type of coverage your company needs, consider the following:  

• Size of your fleet 
• Type of cargo  
• Geographical operations 
• Regulatory requirements 

The team at American Insurance Brokers is here to provide expert consultations on the most beneficial coverage for you. Our goal is to find you the right fit, recommending only the most necessary coverage – and nothing more or less. As brokers, we shop around to find you the best rates based on your needs.  

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? 

Regulatory filings are an important part of adhering to state and federal trucking laws. To stay compliant and maintain required permits and licenses, trucking professionals must submit various forms, applications, and reports to regulatory authorities. These filings include but are not limited to:  

• Authority Registration 
• Motor Carrier Identification Report (MCS-150) 

• Safety Compliance Filings (Daily Logs, Vehicle Maintenance Records, etc.) 
• State-Specific Filings 
• Insurance Filings 
• Compliance Reviews and Audits 
• Record Keeping 

These filings all have different purposes. As it relates to insurance, it is important that a commercial vehicle has met the minimum insurance requirements. You may be required to file proof of insurance, certificates of insurance, or other documentation to regulatory authorities. 

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

How do I find the best insurance for my commercial truck? 

Knowing the definitions of common truck insurance terms is a great start, but the world of commercial insurance is complex. The best way to find the right insurance for you 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: 

Alabama 

Arkansas 

Georgia 

Louisiana 

Mississippi 

Tennessee 

Texas

Oklahoma 

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