Trucking Insurance Tips for New Carriers
ntroduction
hi guys welcome back today i want to talk to you about insurance because let’s face it without insurance you don’t have a trucking business insurance can be a huge problem in this industry especially for newbies so i want to share what i have learned and what i continue to learn every day about insurance ready let’s go
Get Your DOT Number
number one get your dot number even if you’re not ready to get your cdl yet no i’m not kidding if you know for sure that one day you want to be under your own authority just get the dot number and let it age because dot numbers age like fine wine you see insurance companies are not just iffy about new drivers with new cdls they’re just as nervous about ensuring new authorities or they call it new ventures progressive in california for example has no problem ensuring new drivers that have absolutely no cdl experience but they have a very big problem and actually will not ensure a company that has a dot that is less than one years old so to save any potential headache in the future just get a d.o.t number let it sit there marinate in its glory and blossom into a money making or money saving tool that you can use in the future
Check the Insurance Rating
number two check the insurance rating believe it or not getting any insurance just for the sake of being insured just doesn’t cut it especially if you want to get loads pretty much every insurance company is rated on a grading system so a means it’s very good b means it’s okay and as you go down the list it becomes worse so what do these grades mean well an insurance company that has an a rating it means that it’s financially stable enough to be able to pay out the claims of its policy holders on the other end of the spectrum an f rated insurance company has a terrible credit history of paying out claims so why does this matter because when brokers give you their loads they want to make sure that your insurance company in case they have to file a claim against you that the insurance company will actually pay if you have an a rated insurance company they feel safe but if you have an f rated or an unrated risk retention group insurance that means they don’t know what to expect if they file a claim will the insurance pay or not so how do you check the rating of the insurance company well it’s pretty easy you just go to am best.com type in the name of your insurance company and it will give you a rating now if there is no rating that means that this company might be a risk retention group which you should also avoid
Get the Right Liability Insurance Amount
number three get the right liability insurance amount so there’s a federal requirement on one hand and on the other hand there’s what the broker requires the fmcsa requires you to get 750 000 in liability insurance in order for you to be able to legally operate the commercial motor vehicle great so you go out get yourself 750 000 in liability insurance start booking loads and get rejections across the board from all brokers what the hell happened well brokers have their own requirements for insurance ninety-nine percent of brokers require one million dollars in liability insurance a hundred thousand dollars in cargo and if you’re operating a reefer most brokers also require that you have reefer breakdown insurance so yes legally you’re required to have 750 000 in general liability insurance but if you actually want to start making money and transporting loads you have to have that one million dollars in liability and a minimum of a hundred thousand in cargo
Don’t Overlook the Radius of Operation
number four don’t overlook the radius of operation new carriers will go out get an amazing insurance quote for their operations without realizing that they’re limited to a 250 mile radius what does this mean well it means that you cannot run your truck beyond the 250 mile radius oh you were planning to travel from baltimore maryland to the state of washington not washington dc huh yes this can happen and it nearly happened to me when i was first starting out that’s why i’m here to tell you if you’re planning to do interstate operations meaning you’re traveling from state to state make sure to tell your insurance agent that you are operating beyond a 500 mile radius yes the price of insurance will increase but so will your earning potential
Ask About Growth Potential
number five don’t forget to ask about growth if you’re someone who wants to eventually start growing your fleet you have to make sure that your insurance provider allows it some insurance companies will not allow you to add more than two trucks a year to your fleet while others have unlimited expansion potential i believe that in order to plan for your future you have to have as much information as possible today so when you talk to your insurance agent just ask is there a limit on expansion and listen to what they tell you
Disclaimer: Policies Are Changing
now before i leave you i want to give you a little bit of a disclaimer recently insurance companies have been changing their policies and lately it seems like they’re changing them on a daily basis why because they’re being burned by rising claims and they are deciding to minimize their risk in any way possible now just to give you an example in july of 2021 i was looking to renew my insurance now we are a reefer carrier we only operate reefers and one of the insurance providers that gave me a great quote was progressive they knew that we operate reefers and they gave us an amazing quote i decided to pass on them for reasons i won’t mention in this video in september just one and a half months later i reached out to progressive again on behalf of an acquaintance of mine trying to get him insurance for his reefer operations their answer to me was we no longer insure reefers because of the amount of claims so my point is insurance companies are changing their policies with what seems to be the speed of light so you have to be prepared for the future
Conclusion: Prepare for the Future
the best way to be prepared as i mentioned in my first point get a dot number and let it age the second thing you can do is even if you’re not ready yet just go ahead and get your cdl and also let it age because both the dot number and the cdl age like fine wine and will become instrumental in your ability to get good insurance rates in the future i hope you enjoyed this video and i will see you in the next one
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