Is Commercial Truck Owner Operator Insurance Required by law?

Apr 13, 2017 in Insurance 101

The joys of being a truck owner operator. You just finished licensing school, your local credit union has given you a small business loan, and you are on your way to fulfilling your dream of running your own independent trucking operation. Now what? Have you forgotten anything? Ah yes, insurance… The premiums can be expensive. Do you really even need this coverage? The short answer is, yes! In fact, commercial truck insurance is required by law in almost every state. 

Is Commercial Truck Owner Operator Insurance Required by law


What Is Commercial Truck Insurance?

Commercial truck insurance, commercial vehicle insurance, commercial auto insurance, and fleet insurance are all the same terms. If you own a rig, it is imperative that you protect your investment with commercial truck insurance. This insurance coverage protects you against the two main risks you will have as a truck owner operator out there on the open road; Physical Damage and Liability Coverage.

  • Physical Damage Coverage - You spent all that money on that beautiful shiny rig. If you were to get into an auto accident, damaging your truck significantly. This is the insurance coverage that would repair your vehicle and get it looking like new again.


  • Bodily Injury Liability Coverage - Commercial trucks are very large. It only takes one second of distracted driving to collide with another car and change both of your lives forever. Bodily injury coverage would help take care of the cost incurred from you accidentally hurting another driver out there on the. This includes death and other injuries. Another unique feature about liability insurance, is it provides coverage for legal fees, including the lawyer as well. Also, if you are found guilty in the court of law, and must pay out a litigation to a family. This coverage also pays the settlement.

Back to the question at hand. Is Commercial Truck Owner Operator Insurance Required By Law? Yes! And if you think the monthly premium is expensive and you want to try to get around the law and not carry this insurance? If you are involved in an at fault accident without insurance, this could cost you 25 times the premium you would’ve paid on a monthly basis. Fleet insurance doesn’t sound so expensive anymore, right?

Other Notable Coverages

Commercial auto insurance doesn’t just stop with Physical Damage and Bodily Injury Coverage. There are many more coverages that come included. Some are extra add-ons that can significantly enhance your insurance portfolio as an owner operator, keeping your risk to a minimum.

  • Combined Single Limit (CSL) – A Split Limit is just one way you can set up your liability coverage. The other way is called Combined Single Limit. This method combines a single dollar amount which can cover occurrence, bodily injury or property damage, of one person or several persons.


  • Medical Payments - If you or your passengers are injured in a car accident, you can use medical payments from your commercial auto policy that will help cover some of your medical costs.


  • Underinsured Motorist – Ever wondered how “hit and runs” are paid for? This coverage here provides the funds to pay for such an incident. Underinsured Motorist coverage pays for injuries and property damage caused by a driver who hit you, and either does not have insurance at all or left the scene of the accident.


  • Uninsured Motorist - Sometimes out there on the road, you might get into an accident with someone who does have insurance, they just don’t have enough insurance to cover all the damage the calls to your vehicle. If this were to occur, Uninsured Motorist Coverage can be a lifesaver to fill the gap.


  • Comprehensive - You may have heard of this coverage before on your personal auto policy; it works the exact same on your commercial truck insurance policy too. This coverage here pays for damage to your rig from occurrences such as fire, vandalism, flood and even death. Another name for this coverage is called Other Than Collision (OTC). That basically means this covers almost everything that could happen to your car except collisions.


  • Collision - Collision Coverage will get your rig back on the road after it hits somebody, or something, or it's been hit by somebody, or something.

Types and cost of insurance for owner operators


Extra Coverages

  • Gap Insurance - You may have never heard of Gap Insurance, this is the most important coverage if you are financing a commercial truck. Let’s say you take out a loan to buy a new truck for your new business that cost $80,000. Now, let’s say that you total it within the first year. The insurance company is going to give you Actual Cash Value (ACV) for the truck unless you had a New Truck Endorsement added to your policy, which every insurance company does not have. So, you total the car, and the check you receive from the insurance company is $65,000. If you don’t have Gap Insurance, that $15,000 gap will be the money that you owe back to the credit union, but now you don’t have a truck to drive, and you still have to pay the credit union back.


  • Non-Trucking Liability Coverage- For drivers that sometimes drive their rigs for noncommercial usage, non-trucking liability insurance is the way to go another name for this insurance is contingent liability insurance. It will cover the owner operator if they are leasing their services, and already have coverage through the company they’re working for.

Federal Law

If you are a commercial truck owner operator, you are required by Federal law to carry a liability insurance policy with at least $750,000 in it. Why so large? Tractor-trailers, semi-trucks or other fleet type of vehicles can be 10 times the size of a normal private passenger cars. This means, that if a rig of this size were to get into even a fender bender, hundreds of thousands of dollars in damage could be the result.


The most popular question for new drivers getting trucks and insurance for the first time, goes like this: “Is owner operator insurance expensive? Let’s dive into a little bit.

And again, when you’re out there with rigs 10 to 20 times the size of a normal private passenger car, it only takes a second of distracted driving for a catastrophe to occur. If you are not properly insured, or insured at all, and you are at fault, your trucking career could be over before it even starts. That’s how important commercial truck insurance is.

  • On average, Liability Insurance can cost $5000-$1 million a year, depending on the coverage and protection your individual trucking operation needs.
  • Non-Trucking Liability Insurance, on average, can cost anywhere from $450-$1 million a year depending on your
  • Physical Damage can run about $2500 a year.

Having peace of mind, helps you sleep better at night. Having the proper insurance – PRICELESS!