12 Fatal Mistakes to Avoid When Buying Insurance for Your Truck

12 Fatal Mistakes to Avoid When Buying Insurance for Your Truck

A new pickup truck is a big investment, so it’s important to get the right insurance for it. This article will help you avoid common mistakes in buying insurance for your pickup truck car.

1. Getting the wrong kind of insurance.

Do you know that there are three types of truck and commercial vehicle insurance? First, we have general liability. This covers your legal responsibility to others for bodily injury and property damage. It also includes product-related claims and completed operations (like if a contractor that you hired negligently did something that damaged someone’s property).

The second type of commercial auto insurance is called truckers’ cargo insurance. This covers vehicle damage or loss or damage to your load due to collision, fire, theft and other causes. The third kind of coverage is called trucks combined single limit, which covers you for third-party legal liability as well as physical damage to the covered “auto” (i.e., the truck).

2. Buying insurance from a low-cost provider without considering your individual needs and risk tolerance.

Premium rates vary, so it is important to consider the company’s claims-paying ability and financial stability when you compare costs of different insurers. Also make sure that you understand all policy terms like sub-limits, riders, and exclusions.

3. Not comparing several quotes.

When you buy insurance for your truck, make sure that you compare quotes from different insurers to find the lowest cost (premium) possible. A difference of $10 or even $20 per month can mean an average annual savings of nearly a thousand dollars on a typical truck policy.

4. Not knowing the insurance requirements for your trucking business in your state.

Almost all states have a set of commercial auto insurance laws that apply to all businesses with one or more vehicles in their fleet, regardless of whether they are used in intrastate or interstate commerce. You need to know these rules before you can determine what types of coverage you need.

5. Not considering the type of use when buying insurance for your truck.

When you buy a policy that covers a number of autos, it is a good idea to check your coverage limits if your business grows or shrinks in the future and the number of covered autos changes accordingly. This can easily be accomplished by writing to your agent or insurer with changes in fleet size.

6. Buying insurance only for the truck, instead of the “auto.”

Many people make a fatal mistake by buying a commercial auto policy that insures their truck but not the cargo inside it. This is because some states have very specific legal requirements on what must be insured. While liability coverage is usually required even if the load is not covered, it would be a very bad idea to leave your cargo out of a commercial truck insurance policy.

7. Not knowing whether you have comprehensive and collision coverages on your auto or not.

If you have some form of physical damage protection on your own vehicle, then it may be wise to extend that coverage to your commercial vehicles. However, extended physical-damage coverages often come with a high deductible, so you need to weigh the value of this against the premium you are being asked to pay for the same protection under the commercial policy.

8. Not checking your credit score when buying insurance for your truck.

Most of the companies that offer commercial truck insurance are allowed to check the credit histories of small business owners. If you have a sub-prime FICO credit score, then your premium will naturally be higher than it is for others with better scores. However, there are some insurers who may charge you less even with a poor score if you pay for your truck insurance annually instead of monthly.

9. Not shopping around for the best deal before you buy insurance for your truck.

The sad thing about many people’s approach to buying commercial auto insurance is that they do not shop around unless they have a major claim. However, this behavior can cost them dearly in terms of premium dollars, since there are many ways to cut costs without sacrificing coverage.

10. Not making sure your agent is licensed or certified in the state where you reside.

Every state has licensing requirements for insurance agents who sell trucking insurance, so make sure that your agent is properly licensed if you buy your policy from him or her. Your insurer can also tell you whether your agent is properly licensed.

11. Not knowing if you can legally drive your truck in the state where you reside, even if you do not plan to operate there regularly or at all.

There are many quirks that come into play when determining what it takes to be legal to drive a commercial vehicle in any given location. For example, in some states, if your commercial truck is equipped with a trailer, then you must have certain types and amounts of commercial insurance even if the truck itself is not driven in that state.

12. Waiting until renewal time to see what type and amount of coverage your insurer will offer you for a particular price.

Business owners who want to cut costs should not wait until their annual policy renewal to tell their insurer that they are looking for a better price. The insurer may have other plans in the works, which could result in your being offered something you do not want or cannot afford.

What is a commercial truck insurer?

A commercial truck insurer is someone who will provide you with insurance for your fleet. It’s important to make sure they know exactly what type of coverage you are looking for because there are many options out there besides the standard liability policy.

What does “non-trucking” coverage mean?

If your insurance policy states that it includes non-trucking coverage, you are paying for additional types of protection that are not related to owning or driving a commercial vehicle. For example, you may find that your policy includes non-trucking accidental death and dismemberment (AD&D) coverage in case your employees die when they’re not operating the company’s trucks.

What’s a “fleet”?

The definition of a fleet varies by company, but generally it refers to one or more commercial vehicles owned by the same business entity.

Can I switch companies after I buy coverage?

You can switch companies at any time, but know that your insurer may not allow you to transfer your policy over. It depends on how long it has been since you purchased the old policy and whether or not you have a claim against them currently in the process of being resolved.

What if I don’t know much about commercial truck insurance?

Prior to buying a policy, brush up on the types of coverage and how to buy insurance for your truck. If you need help, contact a professional who specializes in commercial trucking insurance such as AIS Insurance Brokers Ltd.

If I have poor credit, can I still get good insurance rates?

Yes, there are companies and agents who will look at more than just credit when determining your premium. However, there are others who may penalize you for this reason alone, so be sure to shop around.

So It Seems

I hope this list will help you make a better decision when it comes to truck insurance. Comment below and let me know what thoughts popped into your head as you read through the list of 12 mistakes that can be avoided.

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