How Your Premiums for Commercial Truck Insurance in Texas Are Determined

Commercial truck insurance is critical to running a trucking business in Texas. It is required by law and protects you and your business from the risks of accidents, theft, vandalism, and other unforeseen events. The average insurance cost for a commercial truck is about $20,000 per year. However, this amount can vary depending on several factors, such as the type and use of the truck, driver record, the state, the coverage limits and deductibles, and the type of cargo being hauled.

Understanding what drives your premiums up can help you make smart choices to keep your rates as low as possible.

Driver Factors

One of the biggest factors affecting commercial truck insurance rates in Texas is the driving record and experience of the drivers operating the trucks. Drivers with clean records and years of experience will qualify for the lowest rates. However, premiums are likely to increase significantly for drivers with:

  • Less than 2 years of experience
  • Major violations on driving record (DUI, reckless driving, etc.)
  • Lapses in insurance coverage
  • Multiple minor moving violations and accidents, even if not at fault

The best way to minimize the impact of driver factors is to conduct thorough screenings during the hiring stages. Require all of your drivers to go through motor vehicle record checks before you hire them. Offer the necessary training and education to promote safe driving habits. 

Type and Size of Trucks

The type and size of commercial trucks that must be insured will also impact insurance rates. The value of the commercial truck also plays a role. Older, less valuable equipment generally costs less to insure than newer models. Prioritize routine maintenance and implement technologies like GPS tracking to maximize savings.

Location and Usage

Where and how often your commercial trucks operate affects risk exposure. Trucks getting high annual mileage or traveling long distances will have higher rates. Operating in and around congested urban areas like Dallas and Houston brings added risk. Share the correct usage and location with insurers to avoid issues with coverage gaps or nonpayment of claims.

Cargo Hauled

Insurers see some types of cargo as riskier to haul than others. For example, commercial trucks hauling hazardous materials, electronics, or expensive goods will have higher rates. Make sure to share with your insurers all cargo types that will be hauled. Enforcing extra security and protective measures for high-risk cargo may help offset some of the cost.

Coverage Limits and Deductibles

The amount of liability coverage and the size of deductibles also impact premiums. Texas requires a minimum of $750,000 in liability coverage, but higher limits are recommended for commercial trucks. Higher liability limits and lower deductibles raise rates, and lower limits and higher deductibles reduce costs. Evaluate risks to determine optimal coverage limits and deductibles.

  • Oil, hazardous waste, over 10,001 lbs, interstate or foreign: $1,000,000
  • Non-hazardous, under 10,001 lbs: $300,000
  • Hazardous substance, over 10,001 lbs, interstate or foreign: $5,000,000
  • Household goods, over 26,000 lbs: $500,000
  • Household goods, under 26,000 lbs: $300,000
  • Property (Non-Hazardous), over 10,001 lbs, interstate or foreign: $750,000

Remember these are just the minimum amounts required by law, but truck drivers may choose to purchase higher limits or additional coverages to protect their assets and business. 

Financial Health

Commercial truck insurers view financially unstable trucking companies as riskier to insure. Maintaining healthy revenue, profitability, cash flow, and credit can help show financial responsibility. Be prepared to provide financial statements and business documents to help secure the best rates.

Claims History

Previous claims activity directly impacts premiums. Too many claims for accidents, cargo damage, etc. over a short period will raise red flags. Multiple accidents where drivers are found to be at fault could indicate inadequate training or safety protocols. A period free of claims helps lower rates again over time. Reporting all losses accurately is a must.

Driver Safety Programs

Implementing formal driver safety programs shows an insurer that you are making a proactive commitment to reducing risks. Program elements like driver training and education, drug/alcohol testing, and accident review procedures can help secure discounted premiums with some insurers. 

The cost of insuring a commercial trucking operation in Texas involves many elements. Working closely with an experienced agent is key to understanding how one or all of these factors can impact your rates, securing the proper coverage, and finding the most cost-effective premiums. The team at J.E.B. Insurance Services, LLC takes the time to fully understand your business and drivers, and then work to secure coverage at the best price.

Contact us today and we’ll review your current policies and operations to ensure you get a customized insurance policy that protects your bottom line in Texas, North Carolina, South Carolina, Illinois, Iowa, Nebraska, Tennessee, Georgia & Florida.

David Ott

David Ott