Trucking Insurance Terms,
Plain and Simple

The current market value of your truck or trailer at the time of a loss — what it's worth today, not what you paid for it. ACV accounts for depreciation.

An insurance company that is licensed and approved to sell insurance in a specific state. Admitted carriers are regulated by the state's insurance department, which provides consumer protections including guaranty fund coverage if the carrier becomes insolvent.

Operating authority granted by the FMCSA that allows a trucking company to transport regulated commodities in interstate commerce. Your authority is tied to your MC number.

Federal forms filed by your insurance carrier with the FMCSA to certify that you have the minimum required liability insurance. The BMC-91 is for general freight carriers; the BMC-91X is for carriers transporting household goods. Without this filing on record with the FMCSA, you cannot legally operate.

Insurance that covers a truck (without a trailer attached) when it's being driven for non-business or personal purposes — off dispatch. Also called Non-Trucking Liability (NTL). If you lease to a carrier, the carrier's insurance typically only covers you while on dispatch.

A temporary insurance contract that provides proof of coverage until a formal policy is issued. A binder confirms that coverage is in force and can be used to satisfy requirements immediately after binding.

A company or individual that arranges the transport of freight between shippers and carriers. Freight brokers typically require proof of cargo insurance and primary liability before dispatching loads to you.

Insurance that protects the freight you're hauling while it's in your care, custody, and control. Covers losses from theft, collision damage, fire, and other covered perils. Required by most freight brokers and shippers.

A formal request made to your insurance carrier asking for payment or coverage for a loss or damage covered under your policy.

Part of physical damage coverage. Pays for damage to your truck or trailer from causes other than collision — including fire, theft, vandalism, weather, and hitting an animal.

Part of physical damage coverage. Pays for damage to your truck or trailer when it collides with another vehicle or object, regardless of fault.

A single dollar limit that applies to both bodily injury and property damage liability for a single occurrence. Most trucking policies use CSL (e.g., $1,000,000 CSL) rather than split limits.

The amount you agree to pay out-of-pocket before your insurance coverage kicks in for a covered claim. Higher deductibles = lower premiums. Common deductibles for truckers range from $1,000 to $5,000 for physical damage.

The U.S. federal agency that oversees transportation safety. The DOT number is assigned to commercial motor vehicles and is used to track a carrier's safety record. Your DOT number is different from your MC number.

The summary page of your insurance policy that lists the named insured, policy period, coverages, limits, deductibles, and premiums. Often the first thing a shipper or broker requests as proof of coverage.

A device required by the FMCSA that records a driver's hours of service (HOS) electronically. ELD compliance can positively impact your insurance rates as carriers see it as a risk management measure.

An amendment or addition to an insurance policy that modifies the terms, conditions, or coverage. Common trucking endorsements include the MCS-90, reefer breakdown, and trailer interchange.

Additional liability coverage that kicks in once your primary liability limit is exhausted. Provides an extra layer of protection for catastrophic accidents.

Interstate commerce means transporting goods across state lines, which triggers federal FMCSA regulations and minimum insurance requirements. Intrastate operations stay within a single state and are subject to that state's regulations, which may differ.

A report from your current or prior insurance carrier showing your claim history over a specified period (typically 3–5 years). Loss runs are required when shopping for new coverage and significantly affect your rates.

Coverage that pays for bodily injury and property damage you cause to others while operating your commercial truck. This is the core, mandatory coverage for all interstate truckers and is what the FMCSA requires on file via the BMC-91.

A unique identifier issued by the FMCSA to motor carriers operating in interstate commerce. Your MC number is required for interstate hauling and must be displayed on your truck.

A mandatory federal endorsement attached to a trucking liability policy that guarantees the insurance company will pay at least the federal minimum liability limits, regardless of any other policy exclusions. Required for all FMCSA-regulated carriers.

The formal policy name for cargo insurance covering freight in your care. Protects against theft, damage, or loss of the goods you're hauling.

A report that shows a driver's license history, including violations, accidents, and license status. Insurance carriers pull MVRs during underwriting to assess driver risk.

The person or business entity specifically listed on the insurance policy as the primary policyholder. The named insured has the most rights and responsibilities under the policy.

Coverage for physical damage to a trailer that you don't own but are using. Typically added as an endorsement to your physical damage policy.

See Bobtail Insurance. Covers you when driving your truck for personal use, not under dispatch to a motor carrier.

An alternative to workers' compensation designed for independent contractors who don't qualify for traditional workers' comp. Covers medical expenses, disability income, and accidental death benefits if you're injured while working.

A self-employed truck driver who owns (or is purchasing) their own truck and operates either under their own authority or leased to a motor carrier. Owner-operators are responsible for their own insurance coverage.

Covers your truck and/or trailer for damage from collision, fire, theft, vandalism, and weather. Consists of two parts: collision and comprehensive. Often required by lenders if you have a truck loan.

The amount you pay for your insurance policy, typically billed annually, semi-annually, quarterly, or monthly.

The first-dollar liability coverage that responds when you're at fault in an accident while operating your truck for business purposes. This is the main, federally required coverage for commercial truckers.

An endorsement on a cargo policy that covers spoilage of perishable goods caused by a breakdown of the refrigeration unit — not just an accident. Essential for owner-operators hauling temperature-sensitive freight.

The continuation of an insurance policy for another term after the original period expires. Carriers re-evaluate your risk at renewal, which may result in premium increases or decreases based on your claims history.

An agreed-upon value for your truck or trailer, stated in the policy. At claim time, the insurer pays the lesser of the stated value or the actual loss — which can still be subject to depreciation in some policies. Not the same as "agreed value."

The legal process by which your insurance company, after paying your claim, steps into your shoes to recover that payment from a responsible third party. Common after accidents where another driver was at fault.

A coverage endorsement that pays for physical damage to a non-owned trailer in your possession under a written trailer interchange agreement. Required if you participate in drop-and-hook operations or use trailers owned by another carrier.

A short-term registration or operating permit that allows a truck to travel in a state where it is not registered. Some insurance carriers offer trip-specific coverage options.

A commercial auto policy specifically designed for trucking operations. Unlike a standard business auto policy, a trucking policy is designed to meet FMCSA filing requirements and includes endorsements specific to motor carriers.