How to Save Money on Truck Insurance
Truck insurance costs are increasing, but fleet owners can save money with some simple strategies. Learn useful tips and advice to help lower your insurance premiums and manage your expenses.
By Alan Schmadtke | For The Inside Lane
Few things in life are more mysterious than insurance rates, and commercial truck insurance is no exception. And while the complex recipe for premiums contains a multitude of data points, fleet owners can lower their costs by following a short list of suggestions.
But even insurers acknowledge that owners can only do so much. They can’t control the bigger marketplace, which reacts to trends from across the country, especially the lawsuit landscape.
Insurance costs for truck owners grew by 12.5% in 2023 — to $0.099 per mile — after three years of post-COVID-19 steadiness in the market, according to the 2024 Operational Cost of Truck report from the American Transportation Research Institute. In fact, insurance was the largest driver of increased operational expenses across the industry — more than fuel costs, more than toll prices and more than loan and lease payments.
The recent insurance spike, along with continued news of large truck-related lawsuit verdicts, has owner-operators worried about next year’s rates and beyond.
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“Trucking is already a very, very tight profit-margin business,” said Lewie Pugh, vice president of the Owner-Operator Independent Drivers Association, a Missouri-based trucking advocacy group.
“I don’t know if it’s going to drive small business carriers, who make up 95% of the motor carriers out there, out of the business. But add this in with everything else, they will get out of the business.”
Insurance rate hikes stun small companies
Rate hikes hit the smallest trucking companies the hardest, ATRI reported.
LTL carriers, many of which put 100 to 1,000 or more trucks on the road a day, often self-insure their fleets and paid an average of $0.045 per mile on premiums, ATRI said. Fleets with zero to five trucks, five to 25 trucks and 26 to 100 trucks were the hardest hit.
In real dollars, premiums for commercial trucks run from $5,000 up to $40,000 a year, with most vehicles landing in the $15,000 to $20,000 range, said Terri Moran, chief underwriting officer for Paul Hanson Partners, a national trucking insurer.
Determining that number depends on location, driving history, driver training, company accident history, credit rating and many other pieces of information.
“There's a lot of information out there [about drivers, trucks and fleets]. We can get it, whether they give it to us or not,” Moran said.
“The data doesn't lie. To me, the big deal is that these guys need to manage that.”
“Manage,” as in:
- Hire drivers with solid driving records
- Train your drivers (and document the training)
- When drivers have incidents or accidents, retrain them (again, document it)
- Weed out poor drivers
- Understand what your CAB report shows and work to reduce your violations
- Put cameras inside cabs
Wait, cameras? What driver wants a camera on them non-stop? What person in any job wants a camera on them at work?
“Some people say, ‘Why would you do that? Isn't it going to prove a problem [when a lawsuit comes up]?’ ” Moran said.
“Cameras will help you if you’re not at fault and hurt you if you are at fault. Like they say, the camera doesn’t lie. But I also think they would make the whole process go faster, and that should save everybody money. Besides that …that’s probably where we’re heading anyway long-term.”
Some risk factors, owner-operators can’t touch.
Location, for instance. Trucks that frequent bigger cities have higher insurance rates. Bigger cities mean more traffic, which means more risk of an accident, which means higher rates.
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The more miles a truck logs, the more it costs to insure. Again, more miles equal more time on the road, which affects driver tiredness. And the more a truck is running, the greater the odds of an accident.
Insurers acknowledge that this is a short list of items to focus on – and that they have access to much data to run through their risk calculators.
They rely on electronic logging devices (ELDs), which monitor everything about a truck, and reports from the Central Analysis Bureau (CAB), which provide near-real-time data about motor carriers, their safety record, finances, reliability and other information.
Insurers make no apologies for it. In fact, they offer a reality check: data is here to stay, and there’s probably more coming.
Truck insurance minimums
A less visible but important cost-cutting strategy is to get states to dial back on their mandatory insurance minimums for trucks. Coverage varies from state to state, but the federal minimum requirements are:
- $300,000 in protection for trucks weighing under 10,001 pounds not carrying hazardous materials
- $750,000 for trucks over 10,001 pounds not carrying hazardous materials
- $1 million for private drivers hauling oil
- $5 million for drivers carrying hazardous materials other than oil
However, on July 1, the liability minimum for New Jersey truck owners doubled, from $750,000 to $1.5 million. It was a stunning escalation for truckers, who say they had virtually no notice about the legislation before the New Jersey legislature passed it and Gov. Phil Murphy signed it in January.
“I don’t know if other states are considering anything similar,” Pugh said. “I think many of them are going to sit back and see if New Jersey gets sued, see if what happened stands.”
The New Jersey Motor Truck Association did not respond to emails or voicemails from The Inside Lane.
Have a question or comment about this article? Email Bianca Prieto at editor@theinsidelane.co
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