Transitioning From Driver To Owner-Operator In A No-Fault State? What Insurance Do You Need?
If you have recently decided to become an owner-operator of a semi truck, rather than driving for a company, you're probably excited about the new opportunities that await you. Rather than receiving a per-mile salary from your company, you should be able to keep the total pay (up to $163,000 per year) for yourself. However, this increased income brings with it some additional expenses, including insurance. What type of insurance coverages do you need in a no-fault state -- and how can you best protect yourself without cutting into your profits? Read on to learn more about the various types of coverage offered to semi truck owner-operators from companies like Metropolitan Insurance Service Consultants to help you make your decision.
What types of coverage do independent owner-operators in a no-fault state need?
As with traditional vehicle insurance, there are several layers of liability and collision insurance you'll need for your semi truck, as well as some alternate plans that can cover loss of use and other business expenses associated with your truck.
No-fault states (such as Florida, Hawaii, Kentucky, and New Jersey) are unique in that they do not require collision or medical payment insurance, which would cover damages suffered by another person or vehicle in an accident in which you were at fault. Instead, the other party's own insurance policy will cover any expenses incurred as the result of an accident.
If you live in a no-fault state but routinely travel to other states as an owner-operator, you shouldn't need supplemental coverage -- your primary coverage should be sufficient, even if you're involved in an at-fault accident in a liability state. However, there are a few additional types of coverage you may wish to pursue:
- Loss of use
If you depend on your truck to earn a living -- as most truckers do -- you might consider purchasing supplemental loss of use insurance. This will help compensate you if your truck is being repaired and you are deprived of its use (and its income) for any period of time. Although this coverage may not provide you with the same weekly income you'd receive if you were using your vehicle, it can help defray other expenses that crop up.
- Towing and rental coverage
One unpleasant side effect of being involved in an accident far from home is the hassle involved in getting your rig (and yourself) to a repair shop and then back home. By purchasing towing and auto rental coverage, you can ensure that you'll be able to get your truck repaired and get yourself back home without incurring any additional out of pocket costs.
Are there any other types of insurance you might need?
You might also consider purchasing umbrella insurance to help supplement your primary commercial insurance policy. As the name implies, umbrella insurance acts as a shield to help protect your personal and business assets if you are deemed at-fault in an accident and the total damages exceed your primary insurance limits. Umbrella insurance can also help protect you against non-driving claims, such as slip and fall accidents in your home, or even libel or slander claims by a third party.
Another benefit to umbrella insurance is that it requires certain liability limits on your underlying commercial insurance policy -- so if you were tempted to reduce your primary coverage to help lower your insurance costs, umbrella coverage will help limit your risk by preventing you from doing so. Because umbrella insurance only kicks in when your primary insurance has been exhausted by a claim, it requires fairly high limits for your underlying policy in order to offer its additional coverage at a low cost.