What is Owner Operator Insurance?

Truck driving is one of the most secure employment fields in America, and these opportunities are growing every day. The benefits of becoming an owner operator go deeper than just financial stability. These professionals also have the flexibility to make their own schedules and the opportunity to see America. However, the owners of big rigs are also required to have far more coverage than the drivers of small cars. Fortunately, it’s rather easy to acquire owner operator insurance from a qualified carrier once you understand the laws..

What is Owner Operator Insurance?

Owner operator insurance actually falls into two categories and drivers should only be concerned with one type. Premium liability insurance actually protects the public from any damage caused by the tractor-trailer while it’s on the road. This is the insurance that’s carried by the driver at all times so long as he or she owns and operates a rig. There’s also secondary liability insurance which is carried by the company with whom the driver is contracted. Even though owner-operators are independent contractors, the companies contracting them will typically have secondary insurance for each truck.

Are there Different Insurance Requirements for Each State?

The trucking industry is closely regulated by the Federal Motor Carrier Safety Administration (FMCSA). This governing body requires the same coverage of all drivers regardless of their states of origin. It’s important to remember that these drivers regularly cross state lines so it’s best to regulate them on a state level. However, there are governing bodies for companies that only haul within one state. Yet in still, both surplus lines and admitted carriers are regulated by the FMCSA.

How much Coverage do Drivers Need?

All owner-operators need at least $750,000 in coverage to acquire their tags. This is liability insurance to pay for property damage and hospital bills if need be. Most companies will require at least $1 million in coverage before they’ll let the owner-operator haul for them. There are some companies that will let drivers haul with the minimum, but they’re typically lower paying operations.

Do Drivers Have to Insure the Cargo?

The company that ships the cargo is responsible for its insurance. However, the company may pass the fee of the insurance onto the driver. It’s up to the driver to read the agreement before signing because paying for cargo insurance can be expensive.

Do Drivers Need More Insurance to Haul Cars?

The FMCSA requires at least $1 million in coverage for drivers who are hauling cars. This is some of the most expensive cargo on the roads and the additional insurance protects the drivers and the owners of those vehicles.

What is Bobtail Liability Insurance?

This is insurance for owner operators that are insured by the company for whom they’re driving. Some operators have their trucks insured by one company because this company is the sole client. However, the company’s insurance only covers the truck while it’s hauling a load. Bobtail insurance provides coverage for the truck when there’s no load on board. Drivers who have insurance in their own names (or the names of their own companies) aren’t required to carry bobtail insurance. This is also known as running under your own authority, and these drivers also need auto liability and cargo insurance. There may also be other requirements from the party paying for the shipment.

Understanding the owner operator insurance Laws are just as important as knowing how to operate the vehicle. Drivers are in the field to earn a living so they don’t want to pay for too much coverage. However, an even worse mistake would be taking to the roads with too little coverage.