Getting the Cheapest Semi Truck Insurance - Where To Go and How To Get It

It’s definitely no secret, insurance is a big expense for transportation companies and making sure you have the cheapest semi truck insurance the market will offer can mean the difference between a thriving, growing business and one that crashes and burns.  Insurance for semi trucks can get outrageous, especially if you’re a new company who hires newer drivers and has a history of claims, it can cripple your business. 

We see some clients who get extremely favorable rates, sometimes as low as $4k - $5k/year, and we also see others pay as much as $30k per truck and struggle to make their payments because insurance eats away at all their profits.  So how do you ensure that you’re getting the cheapest rates for semi truck insurance? Here’s where to go to get the most competitive rates in the market:

Find the right agent

We really don’t like to admit this, but insurance agents are a dime a dozen.  Many will take any kind of business that comes at them, but they don’t have a specialty.  Commercial trucking insurance is a specialized niche and it requires an agent who understands the state of the marketplace, who has strong relationships with his underwriters, and who can use leverage when needed. 

Additionally, the back end policy servicing can be intense at times as transportation companies are constantly adding and removing vehicles and drivers, have billing questions, claims issues, and certainly need insurance certificates to be issued in just a few short minutes.  

Agencies without a focus tend to be slow with changes to the market, lack access to certain insurance companies and aren’t sure which coverage items or exclusions to look for in a niche policy.

Our agency has an exclusive focus in the transportation and commercial trucking niche and we don’t venture outside of that.  We want to make sure that we have access to the most competitive insurance markets for our clients, without sacrificing broad coverage.  We believe that finding cheap semi truck insurance shouldn’t mean losing out on coverage.

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Here are a few things you’ll want to do to ensure you get the cheapest truck insurance rates:

From an insurance standpoint, the commercial trucking space has been tightening up over the last few years.  Underwriters are looking through submissions with a fine tooth comb and are much more cautious about preserving the capital that they commit to insurance policies.  That doesn’t mean that the insurance markets have completely closed down for truckers by any means, but it does mean that you should do everything you can to make yourself look good on paper.  Here are some things you’ll want to consider:

State of Incorporation

In the recent past, trucking companies have incorporated in other states and used virtual addresses where their vehicles are not garaged.  Using a virtual address in another state can save you a lot of money if the other state has more favorable rates.  

The issue arises when the state that issued your drivers license does not match the state in which you incorporated your business.  This draws up a red flag for underwriters as they believe that the vehicle is truly garaged in the state where your license is issued, but they aren’t getting the premium to match the risk.

To avoid these types of complications, it’s always best that the state you incorporate in matches the state that issued your license.  If not, you’re limiting the number of insurance carriers that will actually provide a quote, and your insurance premiums will likely be higher than it otherwise would have been.

Out of state drivers

For transportation companies less than five years in business, it’s best to hire drivers who have licenses in your home state.  In some cases, carriers will make exceptions for out of state drivers within a 250 mile radius, however, this is likely for only 1 or 2 drivers.  If the majority of your drivers are located out of state then underwriters would likely decline to quote.

Why would insurers take this stance?  Similar to the point directly above, if drivers and their vehicles are physically located in different states then the insurers don’t have the opportunity to properly rate for the additional exposure.  Additionally, there is a concern that management will have a challenge maintaining a certain level of vehicle standards.  

By hiring drivers in your home state, you are opening up the number of insurance markets that will feel comfortable providing you a competitive quote.  When you restrict access to markets, your company is forced to accept insurance rates that can seriously eat away at profits.

Know Your Commodities

There are few things that scare an insurance company more than a trucking company that transports anything and everything.  This is because each niche has its own nuances and its own set of risks. All insurance companies have their appetites and sweet spots, anything outside of that quickly turns into a declination.

Many companies haul general freight such as dry goods, canned goods, paper products, plastics etc which is relatively benign and within most insurance company’s appetite, but as soon as you start hauling automobiles, as an example, or flatbed building material, as another example, you gradually start restricting markets.

We’ve had clients who start off hauling general freight but shortly after decide that they want to haul for the UIIA only to realize that there are specific UIIA markets available.  In the end, they end up switching carriers for another who can accommodate.

Loss Runs

What could be a better glimpse into the future than what has recently occured in the past?  Loss runs give the underwriters a picture of the way you run your company, checks and balances you have in place for inspecting your vehicles and the process you go through in selecting your drivers.  

Before an underwriter will release a quote insuring your semi trucks, they’ll want to see your losses for the last three years, closely analyzing the frequency and severity of your losses.  Based on your losses they’ll determine if your claims were a one-off scenario or potentially recurring.

We stress to our insureds that selecting the right drivers is one of the most critical parts of their business.  Checking their motor vehicle reports (MVRs) to make sure they have a clean record is critical along with a satisfactory drug test.  If you don’t take the time to choose the right drivers, the consequences can be irreversible. We’ve seen clients who have had two or three years of clean loss runs only to choose the wrong driver who caused several large claims.  They were large enough where insurance premiums went so high that the small profits didn’t make sense. Ultimately they closed their doors.

Get multiple quotes in under 24 hours

If you’re in the market for quotes for your trucking company and you want to see how much insurance costs then give us a call or submit your information online.

Our agency has a focus on transportation companies and we have markets for new ventures, well established companies, hard-to-place companies, hot shots, UIIA and many more.  We will discuss the information with our underwriters and fight to get you the cheapest insurance quotes on the market, all within 24 hours.

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