What is Truck Insurance?

Truck insurance is a way of protecting an individual or company against loss. The truck insurance premiums paid are a payment to the truck insurance company to fund coverage's that a truck insurance carrier purchases to prevent a truck liability, cargo, general liability or physical damage loss from having them go out of business if they had to pay the claim entirely themselves. The payment for premiums among many truck insurance companies allows the premium fund to pay for the losses. Underwriting is the primary way a truck insurance company defines the risk. A truck insurance underwriter determines the risk the truck insurer can take and the exposure of the truck insurance carrier. The underwriter is responsible for protecting the truck insurance company against high risk candidates who would need to pay more for coverage vs. low risk candidates. Some underwriting criteria include: pass loss history, driver turnover, area where the truck carrier is located, individual driving record history of each employee, the type of cargo the truck carrier is hauling, the distance in miles the truck carrier travels and the size and type of vehicles used are all considered. The truck insurance premium is determined by the law of averages as calculated by truck insurance company actuaries. Truck insurance companies have become major suppliers of capital, and they rank among the nation's largest institutional investors because truck insurers invest premium payments into a wide range of investments.

Common Types of Truck Insurance

Primary Truck Insurance Liability Coverage is a mandated truck insurance coverage on the state and national level which protects the public from injury or damage as a result of a truck accident by mandating certain limits of liability and property damage coverage to claimants of accidents. Physical Damage Coverage protects the truck carrier by repairing or replacing the truck or trailer asset. Motor Truck Cargo Coverage protects for the transporter for his responsibility in the event of damaged or lost freight. Trailer Interchange Coverage protects the legal liability of truckers for damage or loss to non-owned trailers and equipment which a truck carrier possess under a written trailer interchange agreement. Non-Trucking Liability Coverage provides limited truck insurance liability for owner operators who are permanently leased to an ICC regulated carrier.

Truck Insurance

Truck insurance liability premiums have increased in recent years and seem to now have leveled off. In the wake of these high premiums many truck carriers have gone out of business, sold or had their trucks reposed, have gone without insurance or declared bankruptcy. Truckers are paying for insuring bad risks and the bad decision made by these truck insurance companies in trying to just increase their premium without following good underwriting practices. Insurance companies place blame on law firms, who they say have brought unreasonably law suits to court, a trend that has become so common in the U.S. that legislation has proposed to limit these lawsuit awards. Catastrophic hurricanes, earthquakes, wildfires, tsunami's and flooding have also strained many truck insurance company's reserves.