Commercial Truck Insurance: What Every Owner Operator Needs to Know

Disclaimer: This guide is for educational purposes only. Insurance requirements vary by state and operation. Always consult a licensed insurance agent who specializes in commercial trucking for coverage specific to your situation. Regulations, minimum coverage limits, and state-level requirements referenced here were current as of early 2026 but are subject to change.

Why Insurance Is the Cost That Makes or Breaks New Carriers

Insurance is the single biggest fixed cost for most owner operators in their first two years. Before you book your first load, before you pump your first gallon of diesel, you will write a check for insurance that can easily hit $12,000 to $20,000 for the year. That is not optional. Without proof of insurance on file with the FMCSA, your authority is worthless. Brokers will not tender you a load. Shippers will not let you on their property.

The problem is that most new operators do not understand what they are buying. They get a quote, wince at the number, pick the cheapest option, and move on. Then something goes wrong -- an accident, a cargo claim, a gap in coverage they did not know existed -- and a $15,000 annual premium turns into a $200,000 problem that ends their business.

This guide explains every type of trucking insurance you need to understand, what it actually covers, what FMCSA requires, how much it costs, and how to avoid the mistakes that catch new carriers off guard. If you are starting a trucking business, treat this as required reading before you sign any policy.

FMCSA Minimum Coverage Requirements

The Federal Motor Carrier Safety Administration sets the floor for insurance coverage. These are federal minimums under 49 CFR Part 387¹. You cannot operate a commercial motor vehicle in interstate commerce without meeting them.

Primary Liability Minimums by Cargo Type

Cargo Type	Minimum Liability Coverage
General freight (non-hazmat)	$750,000
Household goods	$750,000
Oil (non-bulk)	$1,000,000
Hazardous materials (as defined in 49 CFR 173)8	$5,000,000
Other hazmat and certain large-quantity hazmat	$1,000,000
Freight vehicles under 10,001 lbs GVWR (non-hazmat)	$300,000

These limits come from 49 CFR 387.9² and the corresponding table in 49 CFR 387.9(a). The $750,000 minimum for general freight has not been updated since 1985, and there have been ongoing legislative discussions about raising it to $2,000,000 or higher. As of early 2026, the $750,000 minimum still stands, but you should be aware that this number could change.

What "Minimum" Really Means in Practice

Here is where the gap between regulation and reality shows up. The FMCSA minimum of $750,000 is just that -- a minimum. Many brokers and shippers require $1,000,000 in primary liability before they will work with you. Some large shippers and high-value freight contracts require $2,000,000 or more. If you carry only $750,000 in coverage, you will meet the federal requirement, but you will also lock yourself out of a meaningful percentage of available loads.

Most insurance agents who specialize in trucking will recommend $1,000,000 in primary liability as the practical starting point. The premium difference between $750,000 and $1,000,000 in coverage is often modest -- sometimes only $500 to $1,500 per year -- and it opens up significantly more freight opportunities.

Your insurance provider must also file a Form BMC-91 (for policies) or BMC-82 (for surety bonds) with the FMCSA on your behalf³. Until that filing is processed and shows as active on your FMCSA record, your authority is not valid for operations. This filing takes anywhere from a few days to a couple of weeks. Plan accordingly.

Coverage Types Explained

Commercial trucking insurance is not a single policy. It is a collection of coverage types, each protecting against a different category of risk. Here is what each one covers, who needs it, and what it costs.

Primary Liability (Auto Liability)

What it covers: Bodily injury and property damage you cause to others in an accident while operating your commercial motor vehicle. This is the big one. If you rear-end a minivan and injure four people, primary liability pays their medical bills, lost wages, pain and suffering, and vehicle repair or replacement.

Who needs it: Every motor carrier operating under its own authority⁶. This is the coverage that satisfies the FMCSA minimum. If you are leased on to a carrier, the carrier's primary liability policy covers you while you are under dispatch.

Typical cost range:

• New authority (0-2 years): $8,000 - $14,000/year for $1M coverage
• Established carrier (3+ years, clean record): $5,000 - $9,000/year

Primary liability is the most expensive component of your insurance package and the one where authority age hits hardest. A brand-new MC number can push your liability premium 40-60% higher than what a carrier with five years of clean history would pay for the same coverage level.

Physical Damage

What it covers: Damage to your own truck and trailer from collisions, rollovers, fire, theft, vandalism, and weather events. This typically includes two sub-coverages: collision (damage from hitting something) and comprehensive (damage from everything else -- theft, fire, hail, falling objects).

Who needs it: Anyone with a truck loan or lease -- your lender requires it. Even if you own your truck outright, physical damage coverage protects your most expensive business asset. Going without it is a gamble that one bad day could wipe out a $50,000-$150,000 investment.

Typical cost range:

• Based on truck value, typically 3-6% of the vehicle's stated value per year
• $40,000 truck: $1,200 - $2,400/year
• $80,000 truck: $2,400 - $4,800/year
• $150,000 truck: $4,500 - $9,000/year

Deductibles on physical damage policies usually range from $1,000 to $5,000. A higher deductible lowers your premium, but make sure you can actually afford the deductible if something happens.

Cargo Insurance

What it covers: Loss or damage to the freight you are hauling. If your load of electronics gets damaged in a rollover, or a refrigerated load spoils because the reefer unit failed, cargo insurance pays for the value of that freight.

Who needs it: Every owner operator with their own authority. FMCSA does not set a federal minimum for cargo coverage, but 49 CFR 387.301 requires that carriers have financial responsibility for cargo they transport⁴. Most brokers require $100,000 in cargo coverage as a minimum, and many require $250,000.

Typical cost range:

• $100,000 coverage: $400 - $1,200/year
• $250,000 coverage: $800 - $2,000/year

Cargo insurance is relatively inexpensive compared to liability. The key details to watch for are exclusions and commodity restrictions. Some policies exclude certain types of freight (alcohol, tobacco, pharmaceuticals, live animals) or impose sub-limits for high-value goods. Read the policy language carefully, and make sure your cargo coverage matches the types of freight you actually haul.

Bobtail Insurance

What it covers: Liability protection when you are operating your truck without a trailer for business purposes. Driving to pick up an empty trailer, heading to a repair shop, or repositioning for the next load -- these are all bobtail situations. If you cause an accident during these movements, your primary liability policy may not cover you because you are not actively hauling freight.

Who needs it: Owner operators with their own authority who have gaps between loaded and unloaded movements. This coverage fills the holes that primary liability does not.

Typical cost range: $300 - $800/year

Non-Trucking Liability (NTL)

What it covers: Liability protection when you are using your truck for personal purposes, not under dispatch or performing any business-related driving. Driving home from the truck stop, running personal errands, heading to church on Sunday.

Who needs it: Owner operators who are leased on to a motor carrier. While you are under dispatch, the carrier's insurance covers you. When you are off duty and using your truck personally, NTL fills the gap.

Typical cost range: $400 - $1,200/year

The critical distinction between bobtail and NTL is purpose. Bobtail covers business use without a trailer. NTL covers personal use. Buying the wrong one leaves you exposed. Talk to your agent about which one fits your operation.

General Liability

What it covers: Claims that arise from your business operations but not from driving your truck. If a client visits your office and trips on a loose step, or if a shipper claims your employee damaged their dock, general liability covers those claims. It is sometimes called commercial general liability (CGL) or premises liability.

Who needs it: Any trucking operation with a physical location, employees, or regular interaction with shipper and receiver facilities. Some brokers and shippers require proof of general liability before they will contract with you.

Typical cost range: $400 - $1,500/year for a single-truck operation

Occupational Accident Insurance

What it covers: Medical expenses, disability income, and accidental death benefits for the truck driver. Think of it as a workers' compensation substitute for owner operators who are classified as independent contractors rather than employees.

Who needs it: Independent owner operators who are not covered by a carrier's workers' compensation policy. If you are leased on, your carrier may offer occupational accident coverage, but the terms and costs vary. If you have your own authority, traditional workers' compensation may be required by your state, or occupational accident coverage may serve as an alternative.

Typical cost range: $100 - $250/month ($1,200 - $3,000/year)

This is the coverage that many new operators skip because it does not feel urgent -- until they slip on ice at a truck stop and break their back. Without occupational accident or workers' comp coverage, a serious injury means zero income and potentially hundreds of thousands in medical bills with no safety net.

What Does a Full Insurance Package Cost?

For a new owner operator with their own authority, running a single truck with a $1,000,000 primary liability policy, here is a realistic total cost estimate.

Coverage Type	Annual Cost Range
Primary Liability ($1M)	$8,000 - $14,000
Physical Damage ($80K truck)	$2,400 - $4,800
Cargo ($100K)	$400 - $1,200
Bobtail	$300 - $800
General Liability	$400 - $1,500
Occupational Accident	$1,200 - $3,000
Total	$12,700 - $25,300

The wide range reflects how much individual factors affect pricing. A 45-year-old driver with 15 years of CDL experience, zero accidents, and a clean CSA record will land near the low end even with a new authority. A 25-year-old with two years of driving experience and a speeding violation on their record will be at the high end or may struggle to find coverage at all.

Use our Insurance Premium Calculator to estimate your costs based on your specific profile, truck value, and operating radius.

How Insurance Companies Quote Your Premium

Understanding what drives your premium helps you manage it. Insurance underwriters evaluate your application based on several key factors.

Authority Age

This is the single biggest factor for new carriers. An MC authority that is less than two years old signals high risk⁶. The industry-wide failure rate for new carriers is roughly 30% in the first 24 months, and accident rates for new authorities are statistically higher. Expect your premiums to be 40-60% higher than established carriers until you pass the two-year mark.

After 18-24 months with a clean record, you should see a meaningful drop at your first renewal. Some carriers see 20-30% reductions. By year three, you are in a much better position to shop your coverage competitively.

Driving Record and Experience

Underwriters pull your MVR (Motor Vehicle Report) and PSP (Pre-Employment Screening Program) report. They look at total years of CDL experience, accidents in the past three to five years, moving violations (especially speeding, reckless driving, and DUIs), and your CSA scores. A driver with 10 clean years behind the wheel gets better rates than one with three years and a preventable accident.

Cargo Type

What you haul affects your premium. General dry van freight is the lowest risk. Flatbed operations carry more liability exposure because of securement issues. Refrigerated freight adds spoilage risk. Hazmat, oversize, and specialized freight push premiums higher because the potential loss values are greater and the regulatory exposure is more complex.

Operating Radius

Local operations within a 100-mile radius pay less than regional (500 miles) or long-haul (over 500 miles). More miles on the road means more exposure to accidents, and crossing more state lines adds regulatory complexity.

Equipment Value and Age

The value of your truck directly affects your physical damage premium. A 2018 Freightliner worth $45,000 costs less to insure than a 2025 Peterbilt worth $180,000. Older trucks with higher mileage may see lower physical damage premiums but could face higher liability costs if the insurer considers maintenance reliability a risk factor.

Location

Where you base your operation matters. Carriers domiciled in states with high litigation costs (Florida, Texas, California, New York, Louisiana, Georgia) pay more than carriers in lower-risk states. Urban operations cost more than rural ones because of traffic density and accident frequency.

Safety Technology

Trucks equipped with dashcams (forward and driver-facing), collision avoidance systems, lane departure warnings, and other telematics can earn discounts from some insurers. This is a growing area, and more carriers are leaning on technology to both improve safety and document what actually happens in an incident.

Tips for Reducing Your Premiums

Insurance costs will always be a major expense, but there are concrete steps you can take to bring them down. For a deeper breakdown of each strategy, see our guide on lowering insurance premiums.

Build a Clean Record and Protect It

Nothing lowers your premium more effectively than time and clean miles. Every month you operate without an accident or violation improves your insurability. Drive defensively, do your pre-trip inspections, and fix problems before they become DOT violations. A single preventable accident can increase your premium by 20-40% at renewal and take three to five years to fall off your record.

Install and Use Dashcams

Forward-facing and driver-facing cameras accomplish two things. First, some insurers offer 5-15% discounts for trucks with active camera systems. Second, camera footage protects you from fraudulent claims and "nuclear verdicts" by documenting what actually happened in an incident. The $300-$500 investment in a quality dashcam system pays for itself quickly.

Use Telematics and ELD Data

If your ELD or fleet management system tracks hard braking, speeding, and HOS compliance, share that data with your insurer. Some underwriters will factor safe driving behavior data into their pricing. This is more common with larger fleets, but the trend is moving toward single-truck operations as well.

Raise Your Deductibles Strategically

Increasing your physical damage deductible from $1,000 to $2,500 or $5,000 can reduce that portion of your premium by 10-25%. But only do this if you have the cash reserves to cover the higher deductible in the event of a claim. A $5,000 deductible you cannot pay is worse than a higher premium.

Bundle Your Coverages

Buying all your coverages from one insurer or through one agency often earns a multi-policy discount. It also simplifies claims and renewals. Ask your agent about package pricing versus a la carte.

Work with a Trucking-Specialist Agent

General insurance agents who sell auto, home, and commercial policies may not understand the nuances of trucking insurance. An agent or broker who specializes in commercial trucking knows which carriers are writing new authorities, which ones offer the best rates for your cargo type, and how to structure your policy to avoid coverage gaps. The National Association of Professional Insurance Agents and the TIA (Transportation Intermediaries Association) can help you find specialists.

Shop Your Policy at Every Renewal

Do not auto-renew without getting competing quotes. The insurance marketplace is competitive, and your risk profile changes every year. A carrier who gave you the best rate as a new authority may not be the best option once you have two or three years of clean history.

Join an Insurance Group or Association

Some trucking associations (like OOIDA, the Owner-Operator Independent Drivers Association) offer group insurance programs that provide members access to rates that individual operators cannot get on their own. The collective buying power of thousands of members gives these programs leverage with insurers.

Common Mistakes New Owner Operators Make with Insurance

After watching hundreds of new carriers go through the insurance process, these are the mistakes I see over and over again.

Buying the Minimum and Nothing More

The FMCSA minimum of $750,000 in liability² meets the legal requirement, but it does not protect your business. A serious accident involving injuries can easily generate claims of $1,000,000 to $5,000,000 or more. "Nuclear verdicts" -- jury awards exceeding $10,000,000 in trucking accident cases -- have become increasingly common. If your policy limit is $750,000 and the judgment is $2,000,000, you are personally responsible for the $1,250,000 difference. That means losing your truck, your business, and potentially your personal assets.

Choosing the Cheapest Policy Without Reading the Exclusions

Not all insurance policies are created equal. A policy that is $2,000 cheaper per year might exclude the type of cargo you haul, have a higher aggregate limit that caps total payouts per year, or include a deductible structure that leaves you exposed. Read the declarations page. Understand your exclusions. Ask your agent to explain anything you do not understand.

Skipping Occupational Accident or Workers' Comp

If you are an independent owner operator with no employer-provided health or disability coverage, occupational accident insurance is the only thing standing between a serious injury and financial ruin. At $100-$250 per month, it is among the cheapest coverages available, and it covers the one risk that can end your career and empty your savings simultaneously.

Not Understanding the Difference Between Bobtail and NTL

Buying non-trucking liability when you need bobtail -- or vice versa -- creates a gap in coverage that you will only discover when you file a claim and get denied. If you have your own authority, you almost certainly need bobtail. If you are leased on, you almost certainly need NTL. Confirm this with your agent and make sure the policy you have matches your actual operation.

Letting the Policy Lapse

A lapse in insurance coverage, even for one day, creates a gap that shows up on your FMCSA record and raises red flags for every future underwriter. Insurers treat lapses as a sign of financial instability, and some will refuse to quote you entirely if you have a lapse history. Pay your premiums on time, every time. If cash flow is tight, talk to your agent about payment plans before you miss a due date.

Failing to Update Coverage When Operations Change

If you start hauling a new commodity type, expand your operating radius, buy a second truck, or hire a driver, your insurance needs to reflect those changes. Operating outside the terms of your policy can result in denied claims. Keep your agent informed about any material changes to your operation.

For a full breakdown of insurance within the context of all your startup costs, see our new authority insurance guide, which covers the specific challenges of getting covered in your first 12 months.

How to Find the Right Insurance Provider

Not all insurance companies write commercial trucking policies. Among those that do, not all of them are willing to write new authorities. Here is how to find the right fit.

Start with a trucking-specialist agent. An independent agent or broker who focuses on commercial trucking will have access to multiple carriers and can shop your policy across several underwriters. They know which companies are actively writing new authorities and which ones are pulling back from the market.

Get at least three quotes. Do not accept the first number you see. Insurance pricing varies significantly between carriers, and the spread between the highest and lowest quote can be 30-50%. Make sure you are comparing equivalent coverage levels and deductibles.

Check the insurer's AM Best rating. AM Best rates the financial strength of insurance companies. Look for a rating of A- or better. A cheap policy from an insurer with a B rating might save you money until they cannot pay your claim because they are financially shaky.

Ask about claims handling. How does the insurer handle claims? Do they have a 24/7 claims line? How fast do they process claims? What is their reputation among trucking operators? Ask your agent and ask other owner operators in your network.

Understand the payment structure. Most trucking insurance policies offer monthly payment plans, but the terms vary. Some require 25-30% down with the balance spread over 9-10 monthly installments. Others offer 12-month pay plans with lower down payments. Factor the payment structure into your cash flow planning.

Frequently Asked Questions

How long does it take to get insurance for a new trucking authority?

The quoting process typically takes three to seven business days from application to bindable quote. Your agent will need your USDOT number, MC number, driver information (MVR and CDL), equipment details, and a description of your planned operations. Once you accept a quote, the policy can usually be bound within 24-48 hours. The BMC-91 filing with FMCSA³ takes an additional few days to a couple of weeks to process and show as active.

Can I get trucking insurance with a bad driving record?

It depends on what is on your record. Minor violations (a single speeding ticket, a log book violation) are manageable -- expect higher premiums but you will find coverage. Major violations (DUI, reckless driving, multiple at-fault accidents) make you very difficult to insure. Some specialty carriers will write these policies, but premiums will be extreme. A DUI within the past five years can make standard coverage nearly impossible to obtain.

What happens if I get into an accident and I am underinsured?

If a claim exceeds your policy limits, you are personally liable for the difference. In an LLC structure, this could mean losing business assets. In a sole proprietorship, personal assets are at risk too. This is why most experienced operators carry $1,000,000 or more in primary liability even though the FMCSA minimum is $750,000¹². The incremental cost of higher coverage is small compared to the financial exposure of being underinsured.

Should I use the same insurance company for all my coverages?

Bundling with one carrier often earns discounts and simplifies administration. However, not every insurer offers every coverage type, and sometimes splitting between two carriers gets you better rates on individual coverages. Your agent can model both approaches and show you the total cost comparison. Start by getting a bundled quote, then see if splitting any individual coverage with another carrier saves enough to justify the added complexity.

Does my insurance cover hired drivers?

If you hire a driver to operate your truck, your insurance must list them on the policy. Most insurers will want to review the driver's MVR and CDL before approving them. Adding a driver with a poor record can increase your premiums significantly. Some policies require that you notify the insurer before any new driver operates the vehicle -- failure to do so could result in a denied claim if that driver is involved in an accident.

The Bottom Line

Trucking insurance is not optional, and it is not a place to cut corners. It is the financial foundation that protects everything you have built and everything you will build. As a new owner operator, you will pay more than established carriers -- that is the reality of being an unproven risk. But every clean month of operations brings you closer to better rates and more options.

Do three things right from the start: work with a trucking-specialist agent who knows the market, buy enough coverage to actually protect your business (not just meet the minimum), and treat your safety record as a long-term investment in lower premiums. Those three decisions will pay dividends for as long as you are in this business.