Hotshot trucking plays an important role in logistics and freight delivery in the United States. Hotshot trucks frequently transport items as fast as possible, helping people achieve fast delivery. However, hot shot trucking is a high-risk, high-reward business.
Every year, thousands of commercial truck accidents happen, and sadly, 22% of these accidents result in dangerous injuries to drivers and passengers in other cars. Of these accidents, about 70% result in property damage.
These figures show reasons why you must have hotshot trucking insurance. This insurance protects your company from third-party liability claims, including bodily harm, physical damage caused by you, physical damage to your vehicle, and personal injury.
In this piece, we will show you the cost of this insurance policy and some other relevant information about it.
- How much does hot shot truck insurance cost?
- How much is the average hot shot trucking insurance cost per month?
- What are the factors that affect hot shot truck insurance cost?
- How to reduce your hot shot truck insurance premiums
- Hot shot trucking insurance requirements
- Who needs hot shot trucking insurance?
- Hot shot trucking insurance companies
How much does hot shot trucking insurance cost?
Hotshot trucking insurance policies cost an average of $14,000 on average. Depending on your business and other factors, you can expect to pay between $7,000 to $22,000 per year for your hotshot truck insurance. This includes trucking primary liability insurance, bobtail coverage, trucking physical damage coverage, and truck cargo insurance. Below are the average cost breakdowns for different coverages:
|Hot shot trucking insurance coverages||Average costs|
|Trucking primary liability insurance||$7,000 per year|
|Non-trucking liability insurance||$1,500 per year|
|Trucking physical damage insurance||$2,500 per year|
|Truck cargo insurance||$3,000 per year|
If you have a new trucking business, your insurer might ask that you pay an initial payment of $3,000 to $4,500
The above are average estimates for new companies with single trucks and trailers. In reality, your premium is determined by various criteria, so the amount you pay might vary.
Be sure to shop around with a few companies or work with a top broker like Simply Business, commercialinsurance.net or Smart Financial to have them get several quotes for you to compare and select the cheapest one. You can also get a quote online directly from carriers. However, Progressive is the only carrier offering hot shot trucking insurance quotes online, so it may be worth a try before working with one of these top brokers.
How much is the average hot shot trucking insurance cost per month?
Hot shot insurance is expensive, especially if you are just starting out. The average hot shot trucking insurance cost is $1,170 per month. You can expect to pay from $580 to $1,800 a month. It is a wide range since hot shot trucking insurance cost depends on several factors which we discussed in details below.
The average monthly cost above includes the main trucking coverages that you could need for your hot shot trucking business with the average cost breakdowns by coverages below:
|Hot shot trucking insurance coverages||Average costs|
|Trucking primary liability insurance||$585 per month|
|Non-trucking liability insurance||$125 per year|
|Trucking physical damage insurance||$210 per year|
|Truck cargo insurance||$250 per year|
What are the factors that affect hot shot truck insurance cost?
When it comes to hotshot trucking insurance, no two insurance companies are the same. Usually, your insurance company will bill you based on the perceived risk they feel your company carries.
To determine how risky your business is, the insurer would consider some factors that include the following:
The level of coverage that you want
Keep in mind that hotshot truck insurance is a collection of policies. Therefore, the cost of your premium represents the total value of all hotshot truck policies that you are paying for. Depending on the company, you can adjust the policies and pick the ones you want. But then, there are a few policies that you must have if you want to do business as a hotshot trucker in the United States.
The following are the common policies that might make up a basic hot shot coverage insurance and their cost. The more coverage you add to your insurance, the more expensive it is.
Trucking primary liability coverage
The FMCSA requires truckers to carry at least $750,000 in basic liability insurance. However, for hotshots, this is frequently insufficient. This is because most load brokers and shippers demand $1,000,000 in liability before releasing a shipment. The more liability coverage you need for your hot shot truck, the higher you will have to pay for your premiums.
Truck cargo insurance
Under federal law, the minimum coverage you need is $5,000. As we mentioned earlier, the minimum limits might not provide the necessary coverage you need. Shippers may not release shipments to you in many states except they see you are fully covered to at least $100,000 freight limits.
You may need specific coverage if you carry some loads, like oil or other hazardous materials like gas. If you have many loads on your trailer simultaneously, each bill of loading may demand $100,000 in coverage. Usually, all these extra coverages will cost you more.
Trucking physical damage coverage
This policy protects your truck against harm. Physical damage insurance is an umbrella word for collision insurance (which covers your truck in a traffic collision) and comprehensive insurance (which protects it from theft, fire, flooding, and other non-collision damages). This coverage is essential because most truckers cannot afford to acquire a new dually truck and gooseneck trailer if theirs is damaged.
Learn more at the best trucking physical damage insurance companies
Non-trucking liability insurance
Trucking primary liability insurance covers you only when you are driving for business. When you drive your truck during non-business hours or for your personal purposes, you need to have non-trucking liability insurance coverage to protect you.
Learn more at the best non-trucking liability insurance companies.
Many hotshot trucking enterprises also opt for general liability and workers’ comp insurance which also come at extra cost.
Your deductible refers to the amount you pay by yourself to cover an incident. Usually, a high deductible means you will pay less for your premium since the insurer won’t pay you so much in the event of a covered incident. Therefore, to protect your trucks after an accident, you should set a deductible that you can afford and keep your insurance maximum at a sensible level.
Personal credit rating
Even though you are getting the hotshot truck insurance for your business, your insurer might be interested in your credit card score. People with bad credit scores are considered dangerous because they already have a bad history. So, if you can, make your payments on schedule, and keep track of how much debt you have.
At startup, newer firms and their truck drivers may have higher premiums. This is because new businesses do not have any record for insurers to predict their behaviour. Plus, new businesses tend to make mistakes that can be potentially dangerous for business. However, your premiums will likely reduce over time if you seldom submit claims and your drivers keep a safe driving record.
The type of truck you have will also contribute to the price of your hot shot trucking insurance. Trucks are classified based on their weight (GVW). The heavier your truck, the more you will pay. Larger trucks are more difficult to manoeuvre and cost more to repair. Plus, heavier trucks tend to carry more goods.
The number of claims you’ve had in a certain period of years, typically 3 years, will also affect the cost of your premiums. A company that has repeatedly made claims for its insurance policies either has bad drivers or fails to follow safety rules. As such, your insurer may ask for more money to cover you.
How to reduce your hot shot truck insurance premiums
The following are some ideas to help you find cheap hot shot Insurance for your business.
Check around for the best prices.
Different insurance firms analyze risks differently. As a result, the price of hotshot truck insurance can vary significantly across firms. So, it might be a good idea to evaluate the plans offered by various providers to obtain the best insurance that provides you adequate coverage at the best price.
Working with a top truck insurance broker like Simply Business, Commercialinsurance.net, or Smart Financial is a good way to get several quotes in one place so that you can compare them easily and choose the cheapest one. You can also get a quote online from carriers. However, Progressive is the only carrier offering hot shot trucking insurance quotes online. Getting a quote on Progressive website should take 10 minutes or less, so you may want to start with that to have a benchmark before working with a broker to compare other quotes.
Pay your premiums at once
You may save money on your insurance premium if you pay it all at once rather than monthly payments. When you pay the complete premium amount at the beginning of the year, some insurers can give you discounts of up to 25%.
Increase your deductible
You may lower your yearly premium by choosing a greater deductible amount. However, remember that the deductible is the amount you will pay from your pocket following an accident. So, while this will result in less premium cost, it might mean you will pay more in the event of an accident.
Adjust your coverage limit
You have the option of requesting a lower limit. The coverage limit refers to the maximum amount that the insurance company will pay you in the event of an accident. A smaller limit will not cover you in a large loss, but it will save you money on the premium you pay. However, as you adjust your coverage limit, you must adhere to your state’s minimal limit restrictions.
Ask for discounts
You may ask your insurance agent about discounts and see if you qualify for any. Many insurers offer safe driver discounts, veteran discounts, discounts for bundled coverage, discounts for putting GPS and other safety equipment in your truck, etc.
Hot shot trucking insurance requirements
Whether this is your first hotshot insurance or you are renewing your insurance, you must fulfil your state’s insurance requirements and the limits required by your brokers and shippers. The following are some of the most often requested documents you will need before you can obtain insurance:
- IRP registration(International Registration Plan) for your truck
- PTI (Permanent Trailer Identification) registration for your trailer.
- A commercial Driver’s License (CDL). This is a plus for you because a CDL will lower insurance costs.
- Most freight brokers will want you to have a minimum of one million dollars in liability coverage for your firm. You may decide to tailor the plans to suit your unique needs.
- Most brokers may require that you have a minimum of $100,000 in cargo insurance.
- If your trucks travel across state lines, you’ll need an MC number and the coverage restrictions that we’ll need to file your MCS 90. (This varies per state).
- MCS-150 and BOC-3 forms are required, especially if your company is new.
Who needs hot shot trucking insurance?
You’re a hotshot trucker if you use your pickup truck to transport less-than-loads (LTLs) on short notice, mainly to single clients. It makes no difference if you also have a large rig for regular transportation inside or across state boundaries. Hotshot trucking is a distinct subcategory that requires its coverage.
In hotshot trucking, three types of trucks are used:
- Class 3 (10,001–14,000lbs): This category includes the GMC Sierra 3500, Ram 3500, and Ford F-350.
- Class 4 (14,001–16,000lbs): This category includes the Chevrolet Silverado 4500HD, Ford F-450, and Ram 4500.
- Class 5 (16,001–19,500lbs): This category includes the Chevrolet Silverado 5500HD, Ford F-550, Peterbilt 325, and Ram 5500.
A trailer is required in addition to your vehicle. Hot shot truckers typically employ specialized trailers. The following are the most common:
- Gooseneck Trailers (20 to 40 feet)
- Dovetail trailers (20 to 40 feet)
- Deck over trailers
- Lowboy trailers
You’re undoubtedly a hotshot trucker if you use any of these trucks and trailers to make smaller deliveries faster than regular trucking permits. Firstly, you should know that driving a commercial truck without Commercial Auto Insurance is unlawful in all 50 states of the United States.
Also, your freight brokers and clients will expect that you have very high insurance coverage limits for your hotshot trucking company. So, to continue doing business, make sure you have adequate insurance coverage.
Hot shot trucking insurance companies
Hotshot insurance is not only necessary in the United States; it is an insurance policy that offers you rest of mind. The policy offers you a range of coverages at reasonable prices. However, finding the right insurance company is still important. With so many insurers in the US today, finding the right insurer may be confusing. To avoid confusion, here is our recommendation of the best 5 hotshot trucking insurance companies that you can use.
- Simply Business: Best for comparing several quotes
- Progressive: Best Overall as the leader in commercial truck insurance
- The Hartford: Best for hotshot truck insurance coverage
- Colonial Insurance Services: Best for specialty trucking insurance
- Commercialinsurance.net: Best for working with knowledgeable agents