Generally, truck drivers follow a progression in the industry. At first, they work as company drivers, then become owners/operators, and at last, they acquire their own authority. With every step comes greater responsibilities and needs. As a result, they are also subject to additional regulation and insurance coverage. The purpose of this guide is to explain how you can get your own authority in the trucking industry.
Using Owner Operator Insurance with Owner Authority
Owner-operators are required to obtain a specific type of commercial truck insurance. There are two factors that determine what type of commercial truck insurance an owner-operator needs. It is possible for them to be leased to a motor carrier, or they can work on their own authority.
When an owner-operator works with a separate company, that company will usually provide primary liability insurance as long as they are both signed to a lease. But for a trucking company, that is not enough. A higher level of insurance is necessary in these situations.
A truck owner-operator may have to obtain non-trucking liability, physical damage, and trailer interchange coverage based on the extent of their trucking business.
The following coverages are usually included in commercial truck insurance for those with their own authority:
When a truck under the company’s control causes damage to other people or property, liability insurance pays for the damages. Generally, trucking liability insurance covers two things: property damage and bodily injury.
Bodily damage liability coverage, for example, will cover medical bills, hospital bills, nursing care costs, work loss compensation, rehabilitation, therapy, and treatments, compensation for pain and suffering, and other similar costs, depending on the limits.
The liability insurance for property damage, on the other hand, will cover maintenance and repair costs for items that have been damaged, such as cars, houses, buildings, or lampposts, depending on the policy limits.
Trucking insurance covers physical damage to vehicles or parts during accidents, such as repairs and replacements. It usually covers physical damage when the vehicle crashes into another object or overturns.
Physical damage insurance might also pay when the vehicle is stolen, depending on the policy’s extent of coverage.
Motor Truck Cargo
Owner-operators of motor trucks are able to protect their freight with motor truck cargo insurance. The insurance policy covers liability if the freight is lost or damaged in an accident, fire, or flood.
It is possible to get insurance that covers the costs of cleaning up freight that is disposed of in waterways or on roadways. Owner-operators can also ask their agents if legal expenses for claims, settlements, and freight charges can be included in coverage.
While this type of coverage is a valuable addition to commercial truck insurance, it does have some limitations as well. It is generally not possible to insure items such as explosives, art, contraband, shipping containers, jewelry, and other similar items.
Motor Truck General Liability
It’s also important for owner-operators to include motor truck general liability in their policy to ensure the protection they need for their business. The coverage will pay for property damage or injuries caused by accidents that are not directly related to the operations of a trailer or truck.
This type of commercial truck insurance covers damage to property due to mistakes in delivery, libel or slander issues, and injuries sustained by customers on the premises.
Frequently Asked Questions
What is the process for getting your own trucking authority?
You can obtain your own authority from the Federal Motor Carrier Safety Administration (FMCSA). With your own authority as a carrier you can transport freight. Owner-operators can achieve this through the following seven steps:
- Your business entity should be established and you need to decide if you will be a sole proprietorship, partnership, corporation, limited liability company, or limited liability partnership.
- Visit the FMCSA’s website to acquire a US Department of Transportation (DOT) number.
- Make sure that you have a Motor Carrier number (MC).
- If any US state initiates legal proceedings against you, you will be represented by a BOC-3 Process Agent.
- Ask an agent for help in getting Commercial Truck Insurance.
- Pay the UCR fee and complete the Unified Carrier Registration.
- Show your authority by putting decals on your trucks. It is crucial that the signage includes the business’ legal name along with the USDOT number assigned.
What does it cost to get your own trucking authority?
One must pay $300 to the FMCSA for the actual authority to possess its own authority. There are, however, other expenses to be paid. The following are usually the things that an owner-operator must prepare for:
- State-specific baseplates costing between $1,500 and $2,000
- Total cost of the insurance policy that will be determined by the extent of the coverages
- Depending on the state, business registration costing $250 to $800 annually
- 76 dollars for Unified Carrier Registration
- A $35 fee, required for Process Agent registration
- Depending on the states you choose, international registration plans costing $200 to $2,000
- Tax on heavy-duty vehicles – $100 to $550 a year
- Depending on the state, vehicle inspections costs of $50 to $100
Your Owner Authority is waiting for you
The right insurance policy is essential for your trucking business. The experts can help you find the best insurance policy for your needs! With these guidelines, you can better understand how to get your own authority in trucking.