Premiums are expensive for long haul truckers because insurance carriers consider truckers high risk. They spend most of their working time on the road, which is a very dangerous place to be. Plus, accidents involving large trucks are typically more severe, and people are more apt to sue a large commercial vehicle as the cause of an accident.
Big Trucks Have Big Accidents
Truckers operate large, powerful vehicles that are built for hauling things like heavy machinery, cement, cars, mobile homes, and other large cargo. Since these trucks are so large, accidents involving them are often extremely damaging, and sometimes deadly.
We have all heard commercials and seen advertisements from lawyers that go something like this, “Hit by a big truck? Call us.” Unfortunately, trucking insurance premiums can be affected by these law suits, even if you do not have any claims.
Companies Must Remain Profitable
Between property damage, bodily injury, and the worse case scenario, a death, if you are at fault in an accident, the insurance carrier can end up paying your entire limit of liability. And most of the time, that is $1 million! Therefore, insurance carriers charge a premium per vehicle, one high enough to still remain profitable at the end of the year.
Large Down Payments Cover Filings
Normally, all insurance carriers require a 20 – 25% down payment. But due to the federal and state filing that freight truckers require, carriers will require a 30% down payment for a commercial trucking insurance policy.
Basically, when an insurance carrier files your state and federal filings, they are promising that you will be covered for at least the next 45 days. Therefore, they charge the necessary down payment to cover that amount of time.
Trucking insurance premiums may be higher than in other industries, but at least now you know why.