The hot shot industry is a segment of the trucking business that is focused on speedy delivery. Freight is usually transported by individual customers. The expedited nature of the work helps ensure that delivery arrives on time , and also prevents interruption of operations or services.
Hot Shot Insurance Requirements
Insurance for commercial vehicles is required by law and when it comes to hot shot trucking, the requirements for insurance coverage are more stringent. Freight brokers and clients will have certain limits that your business’s hot shot trucking must comply with.
To be able to cover your costs and satisfy the requirements of your client You must have:
- CargoA at least $100,000 of coverage for cargo. The insurance covers your commodities and the freight you transport. The FMCSA will require at minimum $5,000 of cargo coverage, however brokers and shippers will need to have more coverage. It is also possible to carry specific endorsements if you’ll transport hazardous materials or oil.
- Haftung: A minimum of $1 million of liability insurance. In the FMCSA is requiring $750,000 of liability insurance. However, brokers and shippers will require additional coverage for hot shot trucking.
- Physical DamageCovers the damage caused to your vehicle. It covers collision (protects from accidents in the roadway) in addition to comprehensive (protects from flood, fire and theft.) insurance.
- Bobtail Insurance: If you’re driving a big truck, this coverage can cover the gaps in your standard insurance policy for liability.
Additional coverage can also be included in a complete hot shot trucking insurance plan, for example:
- downtime Offers daily reimbursement in case your truck is damaged by an accident.
- The gap between a loan or leaseWill pay off your loan if have more debt than the vehicle is worth.
- Loss MitigationAlso better known under the umbrella of sue and labor this policy will pay for necessary expenses to stop future damage to the cargo.
- Medical Pay:Will cover the cost of medical expenses should you be injured by accident and require medical attention.
- Family emergency expensesWill pay for your family’s travel expenses in the event that you sustain injuries away from home.
- Storage and Towing:Covers the cost of storage and towing of damaged equipment.
- Clean-up of Debris:Covers the cost of taking away debris after an accident.
- Earned FreightProvides insurance if you ship goods , but you aren’t fully or only partially compensated for the delivery as the shipment is damaged.
Requirements for Obtaining Insurance
To be able to get an insurance plan, you might need to meet certain criteria for example:
- A MC number If you wish crossing state boundaries. The minimum coverage you need will vary based on the state you reside in.
- BOC-3 and MCS-150 files are required.
- HTML0 is an International Registration Plan (IRP) for your vehicle and permanent trailer Identification (PTI) on your vehicle.
- A Commercial Driver’s License (CDL). A lot of states require policy holders to possess valid CDL. This is beneficial for you because having an CDL can lower the cost of insurance.
Insurance companies will have different needs, so bear this in mind while shopping for insurance.
How Much Does Hot Shot Trucking Insurance Cost?
Insurance isn’t about compromise. You require the appropriate kind of insurance and the proper minimum levels of coverage. Brokers and shippers will not allow loads to be released if you do not have sufficient insurance coverage.
The higher requirements for coverage will be accompanied by a higher price. Costs for insurance premiums can vary dramatically, ranging from as low as $6,000 per year up to $19,000 annually. However, most policies will fall within the $12,000 to $14,000 price range.
Before you can secure the policy and begin with monthly installments, it is necessary to require a 25% down amount. It is recommended to put down about $3000. Monthly payments should be about 1,000 dollars per month, however you could end up paying more in the event that you do not look at rates.
The price for your insurance on hotshot trucks will be contingent on many aspects, including:
- Your experiences
- The type of the truck you’re driving
- The kinds of insurance you’ll need
- Limits and deductibles for policies
- Your personal credit
Lowering the Cost of Your Hot Shot Insurance
There’s no way around that – you require insurance protection, and you require the appropriate quantity of insurance. Hot shot insurance can be expensive however there are methods to cut costs.
- Compare quotations and discuss with several agents until discover a policy that meets your budget and requirements.
- Consider increasing your deductible if have sufficient cash reserves. Only do this if you’re certain that you’ll be able to pay the additional deductible.
- You will only get the coverage you require – Nothing more, and nothing less.
- Ask about discounts and how you can benefit from these discounts.
- Make sure you pay your whole policy in the full amount. If you have cash in the bank you could save some cash by paying your annual premium in advance.
The price of insurance hot shot differs greatly based on the company you choose the needs of you and your type of coverage. It’s crucial to evaluate rates and locate the policy that fits your needs and budget. However, most important, you should make sure you are covered at the correct amount of insurance. If you don’t meet the minimum requirements for broker and shipper standards, you’ll be facing difficulty securing deliveries and thriving in your hot shot trucking company.
