What Does Commercial Vehicle Insurance Cover?

When it comes to your business, you need reliable insurance coverage that will protect your livelihood. American Insurance Brokers has been providing the highest level of service for the southern U.S. commercial trucking industry since 1980. But, what does commercial vehicle insurance cover and why is it so important for you to have it? Read on to learn answers to this and other frequently asked questions about commercial vehicle insurance. Have more questions? Our team is always here to help. Contact our team now with your specific questions or coverage concerns.

What is commercial vehicle insurance?


what does commercial vehicle insurance coverCommercial vehicle insurance insures any vehicle used to support your business. Whether you’re operating a single tow truck or managing an entire fleet of semi-trucks, the best commercial vehicle insurance will protect your business in a range of different situations. These may involve your vehicle itself, as well as the cargo you haul or even passengers.

Due to the size and nature of most commercial vehicles, accidents can be devastating and deadly. According to the Federal Motor Carrier Safety Administration (FMCSA), trucks and buses account for 13% of traffic fatalities. While you may assume that most of these accidents happen on busy highways, the numbers tell a different story. In fact, 61% of fatal crashes involving a large truck occur in rural areas. This data shows just how important it is to have the best commercial vehicle insurance, no matter where you operate.

Do I need commercial vehicle insurance?


In general, if you’re using a vehicle for your business operations, you need commercial vehicle insurance. You may need this type of policy if you or your employees:

  • Drive passengers in your vehicle for a fee
  • Transport goods or products
  • Offer a service such as towing
  • Haul heavy loads of materials or equipment for your business

When you’re using a vehicle or fleet for work-related matters, a personal insurance plan generally isn’t robust enough. It’s also worth noting that if your business directly owns the vehicle in question, you most likely need commercial vehicle insurance.

What does commercial vehicle insurance cover?


Before you make this type of investment, you may be wondering, what does commercial vehicle insurance cover?

Depending on the policy you choose, you may be covered for a wide range of incidents. To start, many commercial vehicles are an investment, costing upwards of $100,000 or more. Your commercial vehicle insurance should cover your business in the event that the vehicle is damaged. This may be due to a crash or even a fire and other catastrophic events. Furthermore, you should always have coverage for injuries you, your employees, or other drivers could sustain in a crash.

These are the important types of commercial vehicle insurance coverages to look for:

  • Liability
  • Physical damage
  • Medical payments coverage, or MedPay
  • Uninsured motorist
  • Trailer interchange
  • Non-trucking liability
  • Motor truck cargo
  • Motor truck general liability
  • On-hook towing
  • Garagekeepers legal liability
  • Workers’ compensation

Types of commercial vehicle insurance


When your vehicle is your livelihood, you need every element of protection available. Several different factors will determine what type of commercial vehicle insurance is right for your line of work.

For example, whether you travel over state lines, haul cargo, or tow personal vehicles, you’ll work closely with your insurance agent to adjust your coverage to find the perfect fit for your circumstances. Read on for a detailed explanation of the different types of commercial vehicle insurance coverages you should consider.


Liability insurance is the most basic form of commercial vehicle insurance.

It covers injuries or damage to other people or property if you’re at fault for an accident. It may also cover legal defense costs if you are sued as a result of your involvement in an accident.

Physical damage

Physical damage is a general term for coverage that protects your vehicle. This includes collision insurance, as well as your choice of full comprehensive insurance or fire and theft with combined additional coverage (CAC) insurance.

Collision insurance provides protection for your vehicle if it is damaged in an accident. It can also help cover repairs or replacement of your vehicle if it collides with an object, rolls, or overturns.

Comprehensive insurance, on the other hand, provides protection for your vehicle if it is damaged by something other than a collision or if your vehicle is stolen. Fire and theft with CAC provides similar protection to that comprehensive insurance, but coverage is limited to certain specific, non-collision incidents.

Medical payments insurance, or MedPay

Medical payments coverage, also known as MedPay coverage, is designed to provide coverage for medical expenses after an incident.

This may be for you, and passengers in your vehicle, who are injured during an accident, regardless of who caused it.

Uninsured motorist

Uninsured motorist insurance can protect your business if your driver is involved in an accident with someone who does not have liability insurance or does not have enough liability insurance to pay for associated damages.

Depending on the state, uninsured motorist insurance may be three separate insurance coverages that are typically bundled together into one. These may include:

  • Uninsured motorist insurance (UM or UMBI)
  • Underinsured motorist insurance (UIM)
  • Uninsured motorist property damage insurance (UMPD)

Covered expenses for you and your passengers could include medical bills, lost wages, and pain and suffering.

Trailer interchange

If you have a trailer interchange agreement, you generally need trailer interchange insurance. Since exchanged trailers are not owned by you, they require separate insurance coverage because they are not covered under regular physical damage insurance.

This insurance protects you if the trailer is damaged by collision, fire, theft, explosion, or vandalism.

Non-trucking liability

When you’re under permanent lease to a motor carrier, and you’re not driving under dispatch, non-trucking liability insurance provides the truck insurance coverage you need at an unlimited radius.

Non-trucking liability insurance can also pay for medical and associated expenses for injuries or even death that you cause to other people or for any damage caused to other peoples’ property.

Motor truck cargo

Motor truck cargo, more simply known as cargo insurance, provides insurance on cargo that is lost or damaged due to fire, collision, or striking of a load.

For example, if your load is accidentally dumped on a roadway or waterway, removal expenses coverage pays for the cost to remove debris or extract pollutants caused by the debris. This may also include coverage for costs related to:

  • Preventing further loss
  • Legal expenses in the defense or settlement of claims
  • Freight charges

Motor truck general liability

Motor truck general liability coverage pays for injuries or property damage you cause as a result of business activities that are not directly related to operating your truck.

For example, this may include:

  • Slip and fall incidents
  • Erroneous delivery of products that results in damage of some kind
  • Actions of a driver while representing the insured and on the premises of others (such as while loading docks or at truck stops)
  • Libel and slander
  • Fire on rental property due to insured’s error

On-hook towing

On-hook towing insurance can help pay to repair or replace a vehicle you don’t own if it is damaged by a collision, fire, theft, explosion, or vandalism while you are towing or hauling it.

Do note that in Texas and Virginia, on-hook towing insurance is called garagekeepers legal liability insurance. In these two states, what is actually garagekeepers legal liability insurance (and we’ll explore next) is called storage location insurance.

Garagekeepers legal liability

Garagekeepers legal liability coverage is optional coverage for business owners who offer towing services or operate service stations. It protects your customer’s vehicles when you are keeping them at a covered location for parking, storing, or to perform service.

Garagekeepers legal liability insurance generally provides protection in cases when a vehicle is damaged by fire, theft, vandalism, or collision.

As noted, in Texas and Virginia, garagekeepers legal liability coverage is called storage location insurance.

Workers’ compensation

Workers’ compensation insurance is a mandatory type of insurance carried by many types of businesses. It’s an important type of coverage that can help cover medical costs and a portion of lost wages for an employee who becomes injured or ill on the job.

Workers’ compensation benefits don’t end there. It also protects companies from being sued by employees for workplace conditions that can cause an injury or illness.

Your first choice

Insurance standards and trends change, which is why it’s so important to review your policy every year. This is a chance to update your coverage needs and ensure that you are minimizing costs while maximizing benefits to your business.

At American Insurance Brokers, we offer free annual policy reviews for every type of commercial vehicle we insure. Here is what we look for:

  • Low deductibles and high limits: Your deductible is the amount you will have to pay before the insurance company makes any payment. Your limit is the maximum amount your insurance company is required to pay. The first should be relatively low and the latter should be high.
  • Compliance with all federal and state requirements: A reputable insurance company will make sure that you are always in good standing with requirements, including FMCSA, MCS90, BMC34, BMC91-X, Form E, Form H, OS/OW COI, and SR22.
  • A responsive insurance company: At American Insurance Brokers, we specialize in matching truckers with the best insurance company to meet their needs. This includes being there for you when you run into a problem. Our team promises to lead you to insurance providers that will always have your back.

Known for our excellent customer service, American Insurance Brokers is committed to helping you find the best commercial vehicle insurance for your business. Find out why we are your first choice for commercial insurance in the southern U.S.

Contact us today for your free policy review. Have additional questions? Call us at (800) 256-1177.