Are you trucking company that is wondering at the right amount of insurance to carry in Texas? If YES, here is the right amount of insurance you should carry. Under both federal and state laws, commercial trucking companies in Texas are mandated to maintain minimum liability insurance policies for each registered vehicle.
Both the Federal Motor Carrier Safety Administration (FMCSA) and the Texas Department of Transportation explicitly state specific instructions and minimum liability insurance coverage requirements for trucking companies.
Whether Federal law or State law applies to the commercial vehicle insurance requirement depends on whether the truck operates interstate (across state lines) or intrastate (within Texas borders only). However, the minimum liability coverage in Texas depends on the type of vehicle and the cargo being carried.
For example, commercial motor vehicles that weigh over 26,000 pounds and transport household goods must have at least $500,000 of liability insurance. Howbeit, if a truck weighs 26,000 points or less and transports household goods only in Texas, the minimum liability insurance is $300,000.
But if household goods are being transported outside of state lines and the truck weighs 10,001 or more pounds, the FMCSA requires minimum liability coverage of $750,000. Both Texas and the FMCSA mandate trucks carrying oil to have at least $1,000,000 in liability coverage and those carrying hazardous materials to have a minimum of $5,000,000.
In Texas, if you own large commercial trucks – including dump trucks, auto trailers, car haulers, garbage trucks, box trucks, tank trucks, flatbed trucks, and tow trucks – you have to make sure that the truck insurance you purchase for your trucks is substantial enough to cover your liability so as to limit loss in the event of a covered peril.
Note that the amount of time the truck is on the road, the employees that drive the truck, the number of miles logged annually, and the freight being hauled all factor into how much you will pay for the insurance you buy.
Working with an agent who is conversant with deciphering the legalities of Texas commercial insurance can help. The agent can analyze the way you use your vehicle and gain an understanding of your business to determine the right policy for your specific situation.
Insurance companies also tend to look at the make, model, and year of your trucks, the number of trucks you have on the road, any accidents that your business has been involved in, how far your trucks journey away from home, and how often they are driven. These are some of the different types of Insurance policies your trucking company will need in Texas:
Basic Insurance Policies for Trucking Company in Texas
Commercial auto liability
Have it in mind that this type of insurance generally covers injuries to other people or damage to property if you are at fault for an accident. It may also pay for your legal defense costs in the case of a lawsuit.
Physical damage
Physical damage is a general term for a group of insurance coverage that protect your truck or other commercial vehicles. Note that it covers collision insurance, as well as your choice of full comprehensive insurance or fire and theft with combined additional coverage (CAC) insurance.
Storage location insurance
This offers protection for business owners who offer towing services or operate service stations. It protects a customer’s vehicle when you are keeping it at a covered location for parking, storing, or to perform service.
Workers’ compensation insurance
Workers’ compensation insurance also known as workers’ comp, is a mandatory type of insurance carried by a range of different businesses. It can cover medical costs and a portion of lost wages for an employee who is hurt on the job. It also protects companies from lawsuits related to workplace conditions.
Medical payments coverage
Also known as MedPay coverage is known to cover medical expenses for you and any passengers in your vehicle who are hurt during an accident. This is regardless of who caused the accident.
Uninsured motorist insurance
Note that this type of insurance tends to contain three separate insurance coverages that are categorized together. They generally protect you if you are involved in an accident with someone who is either uninsured or underinsured.
Trailer interchange insurance
This type of physical damage insurance is necessary for trailers being pulled under a trailer interchange agreement. This insurance protects you financially if the trailer is damaged by collision, fire, theft, explosion, or vandalism.
Non-trucking liability insurance
When you are under permanent lease to a motor carrier and you are not driving under dispatch, non-trucking liability insurance can provide the truck insurance coverage you need at an unlimited radius.
- Motor truck cargo insurance: For-hire truckers more or less need this type of insurance to cover liability for cargo that is lost or damaged due to causes such as fire, collision, or striking of a load.
- Motor truck general liability: For-hire truckers or motor carriers will need this type of coverage for injuries or property damage resulting from business activities unrelated to their core operations.
- Garage keeper’s legal liability insurance: Note that this type of insurance will 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.
Conclusion
Just like any other driver, truck drivers are required to have insurance. Truck drivers who are independent contractors are expected to have their own primary liability policy, which means they are covered in the case of an accident.
Independent contractors may also have business liability insurance that helps them cover damages. A local agent is a good place to start looking for the necessary Texas truck insurance coverage you need to mitigate your risks as a commercial truck owner.