Many owner operators who have leased their trucks go through the company they have leased their truck with for their trucking insurance, but they often find that securing their own insurance policies is less expensive in the long run. There are other advantages to securing your own financing. One is that you know exactly what the premiums and coverage amounts are and can make changes if you’d like to. Another advantage is that you won’t have to change insurance companies if you decide to terminate your lease.
There are many types of insurance available to leased owner-operators, including non-trucking liability and physical damage. Some of these insurances are required by law, while others are optional and may be purchased as a package for additional discounts.
Non-trucking liability insurance provides coverage to your company while the truck is on the road for personal service rather than professional service. This trucking insurance only covers the truck when it is not being used to make money.
Other types of liability insurance include bobtail liability and unladen liability. Bobtail liability is designed to provide liability coverage for the truck when it’s being driven with no trailer, whether or not the truck has been dispatched. Unladen liability protects the company from liability when the truck is being driven without a trailer or attached to an unloaded trailer.
Passenger accident insurance provides coverage against accidental death and dismemberment as well as accidental medical expenses for passengers who are guests. There is no deductible and no age requirement for coverage. These policies generally exclude employees and co-drivers who are riding in the passenger seat.
Physical damage insurance covers leased owner-operators from damage or loss to any insured vehicle when the damage is caused by theft, collision, fire or vandalism on a basis of cash value. Coverage often includes downtime coverage as well as glass breakage and chip repair. Most policies have a combined deductible so that you don’t have to pay twice when both the trailer and tractor are damaged during the same incident.
Several optional coverages can be purchased with your physical damage insurance policy if you choose. These policies protect your company from further liability in the event of an accident or loss. One of these coverages is downtime coverage. This insurance provides you with extra protection for times you are not working due to physical damage of your truck or trailer. Waiting periods and daily maximums apply.
Breakdown coverage is a great option for owner-operators who have their trucks leased on with carriers. This insurance helps you pay for unexpected labor and towing when you are stranded on the side of the road due to mechanical failure.
Owner-operators who purchase their trucks new are often hit with significant depreciation charges. Limited depreciation coverage insurance is a great way to eliminate depreciation, but you can only purchase this coverage if you bought your truck new and it is the current model year. Gap coverage is another type of insurance that is especially important if you purchased your truck new. This insurance covers the difference between the amount you owe on your truck loan and the market value of your truck if your truck is deemed to be a total loss in an accident. You can purchase gap coverage to cover both your tractor and your trailer if you own them both.
Trailer interchange insurance may not be necessary if you have leased your truck with a carrier because they typically own the trailers you are pulling. This insurance covers you from liability for damage to any trailer that you don’t own when it is being pulled by your truck. Ask the company you are leased to if trailer interchange coverage is required.