Owner Operators - Insurance Tips

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When you are leased to a motor carrier, there are only two major forms of coverage in your interest as a leased owner-operator: Non-Trucking/Bobtail Liability Insurance and Physical Damage Insurance.

Non-Trucking Liability is normally required by a motor carrier to show that while you are leased to them, the Leased/Owner Operator has Auto Liability coverage when you are not under dispatch. Remember that the insurance term for "dispatch" is the time when you leave your home until return.

Physical Damage insurance provides protection for your piece of equipment. The motor carrier has no insurable interest in your truck. "Insurable Interest" is a person or entity that has some connection to the property to be insured.

Many motor carriers offer these forms of coverage as part of their group policy. This can be a positive for you, the owner-operator, because of the buying power of the motor carrier''''''''s volume of trucks. The downside comes when you cut your lease. Once you''''''''ve left the motor carrier''''''''s group policy, there is no coverage for your truck. But when you have own your insurance policies, they are portable and you are not married to any one motor carrier. Most insurance companies only require a quick phone call when you change motor carriers.

A new coverage, Deductible Buy-Back, is quickly becoming an asset to leased owner-operators. Deductible Buy-Back is important for this reason: in the event of a claim, some motor carriers withhold escrow or reserve amounts from settlements to pay any deductibles of future claims. This escrow could amount to $10,000 being withheld from the leased owner-operators. To help this situation, insurance companies have created insurance policies in which the Leased/Owner Operator can "buy-back" the deductible. In short, you pay a nominal monthly premium and the insurance company will cover up to 90 percent of your deductibles. If there is a certificate of insurance held by the motor carrier showing proof of the deductible buy-back, the escrow is not withheld.

The above examples and definitions are not intended to give specific insurance coverage advice. Please consult with your trucking insurance agent.

This article has been presented by Commercial Insurance Services LLC, a insurance agency that has been providing insurance placement and other services to the trucking industry since 1977. Contributions to this article were made by Mark Carroll, Trucking Insurance Specialist for CIS. If you would like further information, please contact us at 877-260-2287 or visit our website at www.onestoptruckinsurance.com.