Commercial Auto

Let’s jump into the world of Commercial Auto Policies:

1. Commercial Auto Policy with Massachusetts (MA) Minimums: In Massachusetts, commercial vehicles are required to carry certain minimum insurance coverages. These include:

  • Bodily Injury Liability: $20,000 per person and $40,000 per accident.
  • Property Damage Liability: $5,000.
  • Personal Injury Protection (PIP): $8,000.

2. Difference between Combined Single Limit (CSL) and Split Limits:

  • Combined Single Limit (CSL): This is a single number that represents the maximum amount your insurance will pay for all claims resulting from one occurrence. This limit applies to any combination of bodily injuries or property damage in an incident.
  • Split Limits: This policy provides separate maximum dollar amounts an insurer will pay for bodily injury per person, bodily injury per accident, and property damage per accident. For example, a split limit policy might be written as 25/50/25, which means $25,000 for bodily injury per person, $50,000 for bodily injury per accident, and $25,000 for property damage.

3. Department of Transportation (DOT) Requirements: Companies that operate commercial vehicles transporting passengers or hauling cargo in interstate commerce must be registered with the Federal Motor Carrier Safety Administration (FMCSA) and must have a USDOT Number. You are required to obtain a USDOT number if you have a vehicle that:

  • Has a gross vehicle weight rating or gross combination weight rating, or gross vehicle weight or gross combination weight, of 4,536 kg (10,001 pounds) or more.
  • Is designed or used to transport more than 8 passengers (including the driver) for compensation.
  • Is designed or used to transport more than 15 passengers, including the driver, and is not used to transport passengers for compensation.

4. When 750k Liability or 1M+ Liability Limits are Required: The FMCSA requires commercial auto liability insurance. According to the FMCSA, they require insurance between $750,000 and $5,000,000, depending on the type of cargo being transported. For example, non-hazardous freight transported in vehicles weighing under 10,001 lbs requires a minimum of $300,000 in liability insurance. For private and for-hire carriers transporting oil or certain types of hazardous materials, a $1,000,000 to $5,000,000 policy may be required. It’s always best to check with the FMCSA or a knowledgeable insurance agent to determine the appropriate level of coverage for your specific situation.

For our Commercial Trucking Friends:

5. Apportioned Plates: Apportioned plates are the type of license plate you receive when you register under the International Registration Plan (IRP). They are used for trucking businesses that plan to travel in more than two jurisdictions under the IRP and exceed a certain weight limit. The fees for apportioned plates are based on the portion of miles traveled in each state. Without these plates, your fleet cannot travel interstate, and your company would have to register in every single state. A carrier could receive big-time fines if a vehicle travels interstate without plates.

6. Commercial Auto Policies for Trucking: Commercial auto insurance for trucking businesses is designed to cover the unique risks associated with the trucking industry. This includes coverage for the trucks themselves, the drivers, and the cargo they carry. The policy can be customized to match the specific needs of your business.

7. Trucking Liability: Trucking liability insurance, also known as auto liability insurance, is mandated by law for trucking companies. It serves as a shield, protecting motor carriers from legal liabilities stemming from the ownership, maintenance, and use of insured vehicles. It covers both property damage and bodily injuries. While the minimum coverage limit set by state and federal regulations is $750,000, many freight brokerages and shippers often require a higher coverage of $1 million. This higher limit not only meets these requirements but also offers enhanced protection, especially since a single accident can result in claims surpassing these amounts.

8. Cargo: Motor truck cargo insurance, often referred to as cargo insurance, provides coverage on the freight or commodities hauled by for-hire truckers while it’s being transported. It covers your liability for cargo that is lost or damaged due to reasons covered by a policy such as a collision or fire. Cargo insurance specifically focuses on protecting the vehicles being transported. It covers damages or losses that may occur during transit, providing comprehensive coverage to ensure your vehicle arrives safely at its destination.

Navigating the complexities of commercial auto insurance can be daunting, but it’s an essential part of doing business. It’s not just about what you want—it’s about meeting your clients’ requirements and providing proof of coverage on your certificates. At Green Insurance Agency, we understand the intricacies of these policies and are committed to making this process as simple as possible for you. We’re here to help you get accurate, tailored coverage that fits your unique needs. Remember, the right insurance isn’t a luxury—it’s a necessity.