1. What is the difference between primary liability and secondary liability (i.e. bobtail, unladen, non-trucking)?
Primary liability coverage is protection for the public and is required by FMCSA to obtain your own authority. Secondary liability coverage is required by your motor carrier and only covers you while under a permanent signed lease with them. Please see our list of coverages for differences between the secondary liability coverages.
2. What is the minimum coverage that I need to get my authority?
FMCSA only requires $750,000 primary liability coverage, but most shippers/brokers require $1,000,000 to load you. The most common request for cargo is $100,000, but this would depend on what you’re hauling and who you are hauling for.
3. What coverage do I need to get my tags?
Primary liability coverage. If you are running under your own authority, you should have this coverage in your name. If you are leased to a Motor carrier, then you should have this coverage through them.
4. What is the purpose of Physical Damage if my truck is parked or there is no leinholder?
Physical damage covers the investment you have made in your truck. It covers a variety of perils other than collision, such as; fire, theft, vandalism, wind and hail.
5. Can I get my own primary liability and cargo when I am leased to a motor carrier?
FMCSA requires the motor carrier whose authority you are running under to obtain the Primary Liability and Cargo coverage. However, the motor carrier can charge you for this coverage. You need to review any lease agreements carefully prior to signing them to determine what fees the motor carrier is charging you for.
6. Can I use bobtail liability to get my tags?
Usually not as most states require proof of financial responsibility, which is the Primary Auto Liability Insurance, not Bobtail Liability. Depending on the day and who is helping you at the DMV, you may get by with using proof of Bobtail.
7. What is my truck valued at and what is the difference between actual cash value and stated limit?
There is no value set on equipment as actual cash value is the cost of your equipment at the time of a loss minus depreciation. A Stated Limit Policy is when the insured places a value on their equipment. In the event of a loss, a Stated Limit Policy will pay either the actual cash value or the stated limit, whichever is less. Insured’s with stated limit policies can risk over insuring or under insuring their equipment.
8. Are there any age restrictions on the passenger accident coverage?
No, refer to the list of coverage’s for more details.
9. What insurance do I need to run under my own authority?
Auto Liability and Cargo insurance are the most important coverage’s required to run under your own authority. Other coverage’s may be required in your contract(s) with your brokers and shippers.
10. Am I required to have higher limits of auto liability and cargo insurance if I am a car hauler with my own authority?
Yes, FMCSCA requires all car hauling operations to carry $1,000,000.00 in Liability, regardless of the fact that the minimum requirements set by FMCSA for general operations are only $750,000.00. Cargo limits are typically higher than the usual $100,000.00 and would need to be determined based on several factors including your broker and shipper requirements, what type of automobiles are being hauled and how many automobiles can be hauled at one time.
11. What coverages do I need if I lease on to a motor carrier?
Any requirements for secondary liability; i.e. bobtail/non trucking or unladen liability, coverage’s should be specified in your lease agreement with the motor carrier. The lease should also list any additional coverage’s the motor carrier requires. Then you will always have the option to purchase additional coverage on your own to protect your equipment.
12. Do I need bobtail liability if I haul under my own authority?
No. If the primary auto liability is in your name or your corporation and you are the owner of the truck, you would not be required to carry bobtail liability.
13. What is the difference between surplus lines and admitted carriers?
Admitted carrier’s are licensed in a particular state to do business and is regulated by each state’s Division of Insurance. The States are required to monitor the finances and market conduct of the admitted carrier companies and all admitted carriers are obligated to contribute to a state fund – or guaranty fund – which is used to pay claims if any of these licensed insurers were to go insolvent. A surplus line’s carrier is not required to be licensed in your state but do need to be licensed in the state in which they are domiciled. The Division of Insurance or some other type of authority monitors the financial condition of the surplus lines carrier to ensure solvency as there is no guarantee fund. OOIDA’s Surplus lines program is reinsured through Lloyds of London, which is the largest, oldest insurance company in the world.
14. What can I, the insured, do to ensure I am getting the lowest rates possible?
Be honest with your agent about your operation and your records – including work history and your MVR. By doing your due diligence in operating your business in a professional manner and remaining loss free, you should receive better rates. Make sure when you are looking at premiums you are also comparing coverage. Not all policies are just alike. Another important aspect is what type of service you will receive. If you insure for lower rates, but that company can’t provide good timely service, the lower premiums will not help you out at all when you can’t get loaded due to problems with your insurance.