Leased owner operator insuranceLeased owner operator insurance

Owner operators often find it convenient to get all their trucking insurance through their motor carrier. But leased owner-operators may find it more affordable to secure their commercial truck insurance independently.

For leased owner-operators, their biggest insurance needs include Non-Trucking Liability and Physical Damage coverage. They also need Bobtail coverage when their truck isn’t under dispatch.

Non-Trucking Liability Insurance

If you’re a leased owner operator who has signed a permanent lease with a motor carrier that handles your primary liability insurance, you may want to consider non-trucking usage coverage. This policy covers you when you’re driving your truck for personal reasons without a trailer attached. It also includes times when you’re en route to pick up or drop off cargo, or if you’re running errands. This is often known as bobtail insurance, although the difference between the two is important. Bobtail insurance typically covers only the tractor, whereas non-trucking use coverage can include either the truck or the trailer.

For example, let’s say you drive your new Peterbilt to pick up some groceries and are rear-ended by another vehicle. Your motor carrier’s primary auto liability will cover the accident, but you may want additional protection in case you have to repair your truck or pay for medical bills from injuries to other people. A non-trucking policy could help you with these expenses and others that are not covered by the primary auto liability.

Non-trucking policies usually provide Bodily Injury and Property Damage liability coverage up to $1,000,000, depending on the insurer. These policies can also include a collision and comprehensive insurance policy to protect your truck from damage or theft while it’s not attached to a trailer.

Another benefit of a non-trucking policy is that it can be purchased for a short time. So if you’re buying a new truck and will start your permanent lease with a different motor carrier in a few weeks, you can purchase a temporary non-trucking policy to give you the flexibility you need until then.

If you’re a hot shot driver, a non-trucking policy can be a good idea as well. This type of coverage can protect you when you’re helping a friend move or transporting your own goods to and from the store. It can even be used for recreational purposes, like going to a ballgame or visiting friends on your days off. This type of coverage is less expensive than primary auto liability, and can be combined with it if desired.

Physical Damage Insurance

When you drive a vehicle, it can be damaged in a variety of ways. You may hit another truck or an object like a tree or a pole. It could also be stolen or destroyed by fire or vandalism. If your leased owner operator insurance includes physical damage coverage, you can be compensated for these expenses.

Physical damage insurance is typically divided into two types: comprehensive and collision. Collision covers the cost of repairing your truck after a collision with another car or an object such as a light post or a fence. Comprehensive coverage pays for repairs or replacement if your truck is damaged by something other than a collision, including theft, fire, weather-related damage, glass breakage and even animal contact. Many lenders and lease holders require that leased or loaned trucks have collision and comprehensive coverage as part of their leasing and loan agreements.

The cost of physical damage insurance varies depending on the value of your vehicle and your driving record. A number of add-ons are available to make this type of owner operator insurance more comprehensive, including roadside assistance, rental reimbursement and full glass protection. Combined physical damage policies are available that include both collision and comprehensive coverage in one package.

As with other types of owner operator insurance, you can secure these types of specialized coverage through your motor carrier or independently. It is increasingly common for leased owner operators to take control of their own insurance needs and purchase these specialized policies in their own name. This can help them get more competitive quotes and allows them to switch between carriers without interruption should they choose to do so.

When choosing your policy, it is important to remember that the value of your vehicle will depreciate over time. In the event of a total loss, your insurance will pay you the actual cash value of your vehicle, which may be less than the replacement cost. To offset this potential shortfall, some drivers buy gap insurance coverage to cover the difference. To find out more about obtaining physical damage insurance for your leased owner operator truck, contact an independent agent who specializes in trucking insurance.

Occupational Accident Insurance

Occupational accident insurance, or OAI, is an additional policy for truckers that provides medical expense and disability benefits for accidents occurring while the policy holder is working. It’s similar to a workers’ compensation package but is much more affordable, making it an attractive option for leased owner-operators. While OAI policies vary in coverage options and amounts, they usually include accidental death benefit, accidental dismemberment, survivor’s benefit, accident medical expenses, hernia, and passenger accidental benefits.

Like the other types of insurance mentioned, it’s important for leased owner-operators to engage in due diligence when selecting OAI policies. They should review a range of quotes to ensure they’re getting the best possible coverage for their budget. It’s also a good idea to discuss the details of OAI policies with their insurance agent to ensure they’re fully aware of what the policy offers.

While it’s often easier to secure all of the above types of insurance through a motor carrier, more and more truckers are finding it’s in their best interest to obtain their own non-trucking liability, physical damage, and occ/acc coverage. That way, they’re in control of the coverage and can switch carriers if needed without interrupting their work or suffering financial hardship.

Another reason to obtain OAI is that it bridges the gap between full-time employees who are covered under a state’s Workers Comp laws and independent contractors (owner-operators leased on to motor carriers). It can be challenging to draw the line between these two categories. However, OAI can provide a safety net for contractors who are injured on the job.

Additionally, occ/acc policies can help protect the motor carrier against legal action from contractors who believe they should be entitled to workers’ comp benefits. This is particularly important in states where the law regarding contractor versus employee status can be confusing. Contingent liability is an add-on to many OAI policies that helps protect the company against costly litigation if a contractor attempts to sue for workers’ comp benefits and loses. For more information, talk to a trusted independent agent in the Trusted Choice network.

Bobtail Insurance

Bobtail insurance is a type of non-trucking liability coverage that helps leased owner operators protect their truck when they are not hauling a load. It is also sometimes referred to as non-trucking liability, but it is different from the aforementioned policy because it only covers trucks that are not attached to any trailer. While the differences between these two policies may seem minor, bobtail insurance can make a big difference when you need to use your truck for personal reasons.

Those who drive for a living know that the work can be hectic and at times, you may have to leave your truck unattended while you take care of personal business or attend to family needs. It is during this time that you can find yourself in the middle of a traffic accident or even worse, a theft. Having this non-trucking liability coverage can help you to save your commercial truck and your livelihood in the event of a catastrophic accident or theft.

Many people confuse bobtail insurance with non-trucking liability insurance and mistakenly believe that they are the same thing, but this is not the case. Non-trucking liability insurance is a type of primary liability insurance that covers owner-operators when they are not under dispatch and is generally required by a Motor Carrier’s lease agreement. Bobtail insurance, on the other hand, is a type of secondary liability coverage that only applies when you are not hauling any kind of load.

The costs of a bobtail policy will vary depending on several factors including your driving history, your coverage limits and how often you bobtail. It is important to discuss your specific situation with an experienced broker to make sure that you are getting the right coverage for your unique situation.

If you are a leased owner operator who is unsure which type of non-trucking liability and bobtail insurance to get, consider contacting a company that specializes in trucking coverages like Liability Insurance Agency. They have a dedicated department for trucking coverages and can provide the security you need to continue your journey as an independent driver.