Hotshot Insurance For Car Haulers – How To Get The Most Competitive Quotes

It doesn’t matter if you’re just starting off your hotshot operation or if you’ve been in business for years now, insurance is a big portion of your expenses and every business owner owes it to their company to make sure they are getting the most competitive rates.  

The insurance market is constantly evolving, new data is always emerging and rates fluctuate just as much as the markets do.  Some states are more competitive than others and rates vary, below are some things you can do to make sure you’re leaving as much profit as you can in your pockets, not in the insurance companies balance sheet!

How do I make sure I’m getting the most competitive rates?

The very best way to ensure that you’re getting the most competitive insurance rates as a car hauler is to work with a qualified insurance agent.  Oftentimes, business owners will go with their personal insurance agent that they have partnered with for a long time and while we’re certain they appreciate the loyalty, it doesn’t necessarily make them experts in the insurance space.

Hotshot insurance, especially for auto haulers, is a niche insurance and should be placed with an agency that understands the current state of the market, has very strong relationships with their underwriters and has great premium finance companies that they can refer you to.

Our agency has access to over 20 markets, both for hotshot business and tractor business and we are licensed in over 25 states.  Our core focus is commercial insurance for the trucking space and it absolutely includes insurance for hotshots. We work on a daily basis with new venture companies who are just trying to activate their authority with the DOT, as well as with established companies who are cautious with the insurance company they place their business with.  When you have a large fleet, every dollar you spend on insurance counts, but you also want to make sure that the insurance company is just as viable and strong as yours. Give us a call today, or submit your information online, and we’d be happy to fight for the best rates in the market.

What is hotshot trucking?

Commercial insurance for the trucking space is readily available, and while every insurance company has their own set of rules and guidelines for the type of transportation company they will insure, a smaller percentage of companies will accept hotshot trucks.  What do they consider hotshots? It’s essentially a type of trucking that carries and delivers time sensitive loads to accessible locations.  “Time sensitive” is the part that concerns underwriters the most as meeting these sometimes strict deadlines is what causes a higher accident rate leading to more bodily injury and property damage claims to the insurance company. 

Hotshot insurance requirements for auto haulers

While there are probably a few different types of insurance you will want to have, the only federally mandated insurance that would be required of you is the Commercial Auto Liability coverage.  Since an automobile can be considered hazardous material for the little gasoline it carries in the tank, the minimum required for car haulers is $1M in coverage. You must meet these minimums to get your authority active and have the ability to start hauling loads.

While the Auto Liability is the only mandated insurance, you will not get loads from your shippers by only carrying this coverage.  Nearly all shippers will require you to have $100K of Cargo insurance to protect against any damage that occurs to their vehicles during transit.  For auto hauling, most shippers will accept $100K, but others that are more cautious may request up to $150K. These limits may increase further should you decide to transport exotic vehicles such as Ferraris, Lamborghinis, and Porsches.

How much does hotshot insurance cost for car haulers?

This is probably one of the most difficult questions that we get asked on a daily basis because there are many variables that go into each and every quote.  There are no two quotes that are alike, however, there are commonalities. The average cost for hotshot insurance for auto haulers is between $10,500 and $19,000 per year per truck for the liability, cargo and physical damage coverage.$1M of liability coverage generally falls between $7,000 and $12,000 per truck per year. 

As mentioned above, Cargo Insurance protects the automobiles you haul against any damage that can occur during transport.  In the figures above, we assumed that you would only need $100K of cargo coverage that has a premium range between $1,000 and $3,000 per truck for one daily delivery.  If you make multiple deliveries then the premium could increase further.

Another line of coverage you’ll really want to consider is Physical Damage coverage, also known as Comprehensive and Collision coverage which protects your vehicle if it gets stricken by another vehicle or an act of nature, or anything in between.  Premium for Physical Damage on a pickup truck is usually set as a percentage of the value of the truck, in this example we valued the pickup truck at $40,000 since they tend to hold their value well. Premium for Physical Damage coverage ranges between 6 – 10% of the value of the truck, in this example, a pickup truck worth $40,000 would have a premium of $2,400 to $4,000.

To recap:


$1M Commercial Auto Liability $7,000-$12,000

$100K Cargo coverage (Autos) $1,000-$3,000

$40K Physical Damage $2,400-$4,000

Total: $10,400-$19,000

Why is there such a big range in pricing?

As we mentioned above, it’s rare that any two quotes are ever the same, so why is there such a large variance in pricing even if two companies had the exact same vehicles.  There are several factors that an insurance company takes into account when quoting your hotshot business, the most important ones of which are within your control.

Credit score – This hasn’t always been the case but in the last few years actuaries have correlated a high credit score with profitability and conversely a low credit score with claims, losses and unprofitability.  The higher you can maintain your credit score, the lower your premiums should be. Not every insurance company will take this into account, but having a credit credit score is a good thing anyway, so why not work towards getting it as high as possible.

Driving record – for a hotshot operation whose livelihood depends on it, keeping a clean motor vehicle report (MVR) is essential.  For some insurance companies having just one violation on your record could cost you thousands of dollars in premium, adding an at-fault accident will add on another few thousand dollars, if you get a quote at all.  

Our agency really cautions the owners of trucking companies to find stellar drivers with squeeky clean MVRs who also pass a drug test.  Just one large claim on your loss history report could cause your insurance rates to climb so high that it would make more sense to close down your operations.

Commodities – it’s always best practice to keep a narrow focus of commodities you’ll be transporting.  Insurance companies get nervous when they see a company who transports autos but then also wants to transport refrigerated goods, as an example.  This constricts the number of markets available to you and is sure to raise your premiums.

Out of state drivers – finding drivers who are licensed in your domiciled state is easiest and least costly, but as your company becomes more “seasoned” and continues to grow then you’ll have more flexibility in the number of out-of-state drivers you have.  It’s hard to oversee, train, and manage your contractors when you rarely ever see them.

We can help!

If you’re looking for a reputable agency to help you navigate your insurance needs we’d love to hear from you.  Whether you are a new company looking for insurance for the very first time or a seasoned company with 100+ trucks, we have the markets, relationships and most of all the experience to guide you through the process and locate the most competitive rate in the market.  Call us today!