An overview of the US trucking industry shows a rise in owner-operators, boosting the sector.
Operating your own truck brings challenges, excitement, and risks.
More independent owner-operators are joining, requiring careful planning, financing, and credit to transition from a company driver.
A significant cost in obtaining your own authority is the insurance for a DOT number, vital for safety monitoring.
Check and ensure compliance with US DOT number requirements. Self-payment of liability insurance is a major expense during this process.
Clarify early on the risks and necessary insurance as an independent owner-operator. Truck authority insurance covers various components.
Liability Insurance:
In the event of accidents, liability insurance safeguards against injuries to individuals or property damages.
Typical coverage ranges from $750,000 to $1,000,000, with a recommended minimum of $5,000,000 for hauling hazardous materials.
This component is often one of the most expensive in commercial truck insurance and is mandatory for all commercial trucks, as driving without primary liability insurance can result in significant fines.
Cargo Insurance:
Navigating the complexities of cargo insurance is essential, as different shippers may have varying rules and requirements.
Coverage amounts depend on the nature of the transported goods, and it’s crucial to ensure that frequently transported items are adequately insured.
Policy selection is significant, as certain shippers may prefer specific cargo policies, influencing their association decisions.
Usual limits for cargo insurance hover around $100,000.
Physical Damage Insurance:
Protecting against unexpected damages on the road, this insurance covers damages occurring during transit or due to accidents.
Costs typically range from 3-5% of the value of the goods being shipped.
Expanding Coverage Horizons:
Additional coverages to consider for a comprehensive authority insurance policy include:
General Liability: Basic insurance to protect the public against losses and physical injury during accidents.
Bobtail: Covers liabilities when the truck is not transporting goods.
Trailer Interchange: Covers damage to non-owned trailers under an interchange agreement.
Umbrella: Offers protection for unforeseen circumstances where primary liability coverage may be insufficient.
Occupational Accident: Includes coverage for medical, disability, death, and dismemberment in case of accidents.
Workers’ Compensation: Mandatory insurance for many trucking companies, providing coverage for medical expenses, low wages, rehabilitation costs, death benefits, and more.
Factors mentioned for choosing an insurance company:
- Area of operation
- Driving record
- Garaging location
- Credit rating
- Criminal record
- Age
- Equipment condition
Also read: Commercial Truck Insurance Mississippi
Understanding US DOT and Its Impact on Your Business
MCS-150 Form and Cargo Disclosure:
- The MCS-150 form, a vital part of US DOT filing, specifies your vehicle and cargo details.
- Disclosure of hauling hazardous or publicly-limited substances, passengers, etc., expedites border checkpoint travel.
FMCSA Awareness and Verification:
- FMCSA becomes aware of your business through the MCS-150 form, emphasizing cargo type disclosure.
- Fleet size, vehicle mileage, and other details in the form facilitate verification with just a US DOT number.
- Simplifies inspections and compliance checks for authorities without causing prolonged cargo stops.
US DOT Number Requirement:
If your company operates commercial vehicles, it is legally mandated to display a US DOT number on your vehicle.
Therefore, ensure that all your vehicles are appropriately tagged with the US DOT number.
Importance of Biennial Update:
Fleet operators must file US DOT updates once every two years, irrespective of whether the vehicles are operational or not.
Subsequently, failing to file the biennial update may lead to DOT number confiscation and fines up to $10,000.
Furthermore, the last two digits of your DOT number indicate the filing year and month, providing a clear guideline for timely updates.
US Dot E-filing Considerations:
US DOT filings play a crucial role in calculating safety scores, including CSA scores for compliance, safety, and accountability.
Consequently, ensuring accuracy in filings is essential to prevent performance score reductions. It is imperative to note that filing must be done every two years, adhering to time limits and avoiding penalties.
Who Requires a US DOT Number:
Compulsory for companies holding permits in the Hazardous Material Safety, Motor Carrier Operation, and Intermodal Equipment Provider categories.
Additionally, businesses heavily reliant on interstate commerce should obtain a US DOT number if they fall under categories such as hauling passengers, owning vehicles over 10,000 lbs, or transporting hazardous substances or pharmaceuticals.