In hopes of protecting our assets, both privately owned or otherwise, we may tend to overlook a few things when it comes to choosing an insurance plan. This is perfectly understandable considering that there are a variety of risks that we can face every day.
What this means though, is that we could potentially be paying too much or not enough for the kind of coverage we actually need.
Pay too much, and you’re wasting money. Pay too little, and the coverage might not be enough.
So what does it mean to be able to choose the right kind of insurance plan, especially for a commercial truck? Why can’t we just choose from the available packages? Let’s break down a few details.
Table of Contents
Why does commercial trucking insurance matter?
First, we need to establish why this is something we should be talking about.
Consider this: with all the necessary items to keep our present way of life going, transportation of goods has become one of the most important industries today. The majority of the transportation in any given location will be done on land.
With that said, you can expect most trucking businesses to be lucrative ventures. The problem really begins when the wear and tear of the daily usage of these trucks starts to show.
Commercial vs. Private vehicles
With the aforementioned consideration in play, it stands to reason that this kind of business necessitates a level of coverage for your assets.
Unlike a privately owned vehicle, your trucks will be traveling longer distances at a much higher rate. Of course, specific businesses will have their own area of operations and this will be factored in.
Another thing to keep in mind is how your trucks will be stored. Privately owned vehicles will, of course, be safe at home.
Commercial trucks, on the other hand, will most likely be parked in the vicinity of the business. The environment of the trucks will be a big factor in their safety and maintenance. Basically, anything that may affect the lifespan of the truck should be factored in.
Commercial trucks left outside, uncovered, will be going through much worse conditions than a commercial truck in an enclosed venue. The particulars of one’s commercial truck insurance will largely depend on a combination of these factors.
Working with a Budget
With what we’ve discussed so far, we can see how things can get expensive fast. That’s because there’s a load of things for the insurer to keep track of. Remember, they have to make sure that they will make a profit too.
This is why it’s important to know what kind of insurance policy you want for your vehicles. Determining your needs earlier on will ensure that you never pay more than you really need to.
Cost of Deductibles
The deductible in any kind of insurance policy should be something to think about. An increase in the cost of your deductible would be a factor in lowering your insurance premium, but of course, this balances out with a higher deductible.
Determining a safe balance for yourself should be easy after some research on the insurer. Try to figure out how much you’re most likely to pay should you need to make a claim.
Whether it be installments, lump-sum payments, or a combination of the two, there ought to be a payment option that suits your business’ finances. Your chosen insurer should address the issue. You can take time shopping around for options.
Of course, this will be another balancing act. A lump-sum payment may mean lower premiums, if any, although that would entail paying for the entire year. Alternatively, paying the premium might be more approachable for now but will most likely result in higher expenses.
What Do These Plans Cover?
Now to the bit people are most interested in. The level of coverage that will be made available to you will also depend on the insurer. Learning how to see which of them is a comprehensive truck insurance policy will give you the advantage at this point.
General liability coverage is the basic coverage expected of commercial operations. This type provides third-party coverage for employees and assets, such as vehicles of the company. Any lawsuit coming your way might be alleviated by the policy.
This covers a wider range of issues when compared to other coverage types. You can think of this coverage as something that focuses on businesses and companies.
While general liability provides security for more general scenarios, physical damage coverage tackles situations wherein the insured’s property and/or truck are damaged. This includes fires, theft, vandalism, and other similar events.
Additionally, any physical damages on the truck, even those as small as scratches and dings, should be included in this. Make sure you can clarify that point with the insurer.
This coverage is arguably one of the most important when it comes to the commercial trucking business, to the point where it is required in most cases by the law. This coverage will focus on any physical injuries and damages that may result from an accident.
Given how frequently the trucks will be used on trips, you can expect this coverage to be useful at one point or another.
For commercial trucking businesses, the cargo is technically the primary product of the company. Steps must then be made to ensure that the cargo you will be transporting is protected. You can expect to shell out some additional cash for this purpose.
There are two main categories under cargo insurance:
On average, perishable cargo, such as food, costs higher than non-perishable goods. This is due to the fact that the declared cargo has a chance of going bad during the actual trip. This could be the result of delays, breakdowns, and the like during the trip.
Non-perishable cargo, such as electronics, is expected to last much longer. To this point, the average cost for insuring these types of cargo should be lower. Of course, this is not assured as some non-perishables have such a high value.
One thing that people forget to check is the credibility of the insurer. This could have been the result of being distracted by such amazing rates that we forget to check whether it is worth trusting the insurer in the first place.
Each insurer will have different perspectives on different assets. pickup truck insurance, for one, ends up being more costly than your average car insurance and can be up to 67% more expensive than your cheaper truck insurance.
This perspective and expertise will be a huge factor in the kind of coverage you can expect to get as well as the expenses that will be tied to it.
Another thing that the credibility check will show you is how trustworthy the insurer is. Have they ever failed? Have they ever promised more than they could actually provide?
We can break this down even further with the following factors to consider:
Insurers should know how to treat their customers. Nevertheless, examples exist of people experiencing downright deplorable customer interactions and services.
The best way to go about this is to do some desk research on your own. Some easy-to-access sources of these types of information are online review sites. These sites will host opinions from various customers of the insurer.
This way, you are able to gain insight from the experiences of previous customers. This helps you:
- Get first-hand information
- Understand the processes and steps that previous customers had to take
- Understand why they stayed or changed insurer
While these may not look so important now, you’d be surprised at how big of an effect this will have on your experience as a business owner.
How Easy is it to Make a Claim?
Of course, we can’t forget about the ease of making a claim. You should be able to get an idea of this from those aforementioned online reviews.
To add, it’d be wise to do a thorough check on the insurer’s website so that you can compare notes of their published claims versus the actual experience of previous customers. This is important for two main reasons.
The ease of making a claim will determine how quickly you can address problems with your business.
Say a truck breaks. Leaving it too long before getting it repaired then negatively impacts your business since a.) you will not be able to make deliveries with that truck, and b.) the damages to the truck could be exacerbated over time.
At the end of the day, a huge portion of the responsibility will obviously be yours as the business owner. Learning the various pieces that make up the totality of your operations will give you the kind of detail that will ensure an appropriate amount of coverage.
Additionally, this will also mean that you avoid overspending or basically being fooled by any insurer with malicious intent. After all, you’ll want the peace of mind of knowing that your money is going where it needs to go.
Do you have much experience with looking for the right commercial truck insurance? Sharing insights between customers and future-customers alike will only have positive outcomes. Let us know down below in the comments to help develop the discussion.