The coverages you actually need (and don't)

Why insurance decides whether your business exists

You cannot bind a load without insurance. Amazon Relay requires $1M auto liability + $100k cargo. Every legitimate broker in the country requires the same. Your MC authority does not go active until FMCSA has your insurance filings on record.

Insurance is also the biggest recurring line item on your P&L — often more than fuel, sometimes 30–40% of gross for a brand-new authority. Underprice yourself and you can't get insured; overpay and your CPM makes you unprofitable.

The six coverages, in order of importance

1. Auto liability — pays for injuries and property damage you cause to others.

• FMCSA minimum: $750,000. Nearly every broker requires $1,000,000.
• Higher limits (up to $5M) available and cheap once you're established.
• Cost: $6,000–$10,000/yr for a new MC.

2. Cargo insurance — pays for damage to the freight you're hauling.

• Standard: $100,000. Some high-value shippers require $250k or $500k.
• Watch for exclusions (theft, water damage, targeted commodities).
• Cost: $800–$1,500/yr.

3. General liability — non-truck-related liability (slip and fall at a shipper, etc.).

• Standard: $1,000,000 per occurrence / $2M aggregate.
• Often bundled with a "business owner's policy" (BOP) or included in a commercial package.
• Cost: $400–$700/yr.

4. Physical damage (collision + comprehensive) — pays for damage to YOUR truck.

• Not required by FMCSA. Required by your lender if the truck is financed.
• Deductible usually $2,500–$5,000 for a new MC (higher deductible = lower premium).
• Cost: $1,800–$3,500/yr on a $50k truck.

5. Non-trucking liability (bobtail) — covers the truck when it's operating NOT under dispatch (personal use, driving home empty).

• Usually $50/mo, worth it.
• Only required if you drive the truck for personal reasons ever.

6. Trailer interchange / trailer physical damage — covers trailers you're pulling that you don't own.

• Not applicable to straight-truck box operators unless you also do drop-and-hook trailer work.

MCS-90 and BMC-91 — the FMCSA endorsements

Two federal filings your insurance agent submits to FMCSA on your behalf:

• BMC-91 (or 91X): proof of minimum $750,000 auto liability.
• MCS-90: endorsement making the insurer primary for environmental / public safety damage.

Both must be on file for your MC to be active. They're free — the agent files them. Confirm your agent has done this by checking your FMCSA SAFER profile 3 business days after you bind.

Coverages that are usually a scam (or unnecessary)

• "Emergency truck breakdown coverage" sold separately ($30/mo) — often already included in your factoring company's benefits or your Ryder / Penske roadside service. Read your existing coverage first.
• "Reefer breakdown" if you don't have a reefer — obviously.
• "Uninsured motorist" at extremely high limits ($1M+) — the marginal cost past $100k is usually not worth it for commercial trucks in most states.
• "Occupational accident" as a substitute for workers' comp — legally insufficient if a state audits you as an "employer" (you as the owner-operator often are one).

Broker-required endorsements — check every rate confirmation

Some brokers or shippers require specific endorsements. Common ones:

• Additional insured — the broker listed as an additional insured on your policy.
• Waiver of subrogation — your insurer won't sue the broker if you cause damage.
• Primary and non-contributory — your insurance pays first, broker's insurance doesn't chip in.

Your agent should be able to issue a Certificate of Insurance (COI) with these endorsements added within 24 hours. If they take longer, you have the wrong agent — see next lesson.

How premiums are calculated (so you can lower them)

Insurance underwriters rate you on:

1. 1Radius of operation (< 100mi, 100–300mi, 300–500mi, > 500mi). Longer radius = higher premium.
2. 2Cargo type (general freight vs. hazmat vs. high-value).
3. 3Driver MVR (motor vehicle record — tickets, at-fault accidents, DUIs).
4. 4CAB score (Central Analysis Bureau — trucking's version of a credit score).
5. 5CSA score (FMCSA Safety Measurement System — hours-of-service, inspections).
6. 6Years in business (0 years = highest premium; year 3+ premium drops 20–40%).
7. 7Truck value (for physical damage) and radius (for auto liability).
8. 8State/ZIP — Florida, Louisiana, and California are notoriously expensive.

Ways to lower premium at renewal:

• Clean MVR for 12 months
• Zero at-fault accidents
• Higher deductibles ($5k vs $2.5k on physical damage saves 15–25%)
• Reduced radius (if you don't need OTR, keep it 300mi)
• CAB / CSA score improvement — most agents will show you your CAB report if you ask

The realistic breakdown — my last renewal

For reference, here's a real 2025 renewal on my second truck (year 3 as MC, clean loss history, 300-mile radius, dry van 26' box):

For a year-1 MC the same policy would be $12k–$14k, and physical damage would come with a $5k deductible.

Action items

• Get quotes from at least 3 agents (next lesson)
• Match apples-to-apples: same limits, same endorsements, same deductibles
• Verify BMC-91 and MCS-90 are filed with FMCSA before you take your first load
• Save your COI as a PDF on your phone — brokers will ask for it constantly
• Set a calendar reminder for renewal date 60 days out

Next: Shopping agents — the questions that separate a good insurance agent from an expensive one.