Why Owner-Operators in California Need Commercial Truck Insurance: A Comprehensive Guide

Thang Truong
Thang Truong
Updated on:

Operating a commercial truck in California comes with many risks, including accidents, theft, and damage to cargo. As an owner-operator, protecting yourself and your business is crucial. One of the most effective ways to do this is by investing in commercial truck insurance. In this comprehensive guide, we’ll explore why owner-operators in California need commercial truck insurance and the various types of coverage available to them.

What is commercial truck insurance?

Commercial truck insurance is a type of insurance policy designed to protect commercial truck drivers and their businesses. This insurance policy provides coverage for damage to the vehicle, theft, liability for bodily injury or property damage, and cargo damage. Depending on the policy, it may also cover medical expenses for injuries sustained by the driver or passengers, legal fees, and other expenses associated with a trucking accident.

Owner-operators need commercial truck insurance because they are responsible for their vehicle and the goods they are carrying. Without adequate insurance, they could be held liable for damages in the event of an accident. This could lead to significant financial losses for the business and potentially even bankruptcy.

California commercial truck insurance requirements for owner-operators

California has specific requirements for commercial truck insurance. In the state, all commercial vehicles must carry liability insurance with a minimum of $750,000 in coverage. For vehicles carrying hazardous materials, the minimum liability insurance limit is $5,000,000.

If an owner-operator fails to carry sufficient insurance coverage in California, they may face fines, penalties, and even the revocation of their commercial driver’s license. They may also be held personally responsible for any damages or injuries that occur in an accident. 

Factors affecting owner-operator commercial truck insurance rates in California

Several factors can affect the cost of commercial truck insurance in California. Some common factors include the driver’s age and experience, the type of cargo being transported, the distance of the trip, and the vehicle’s age and condition. Other factors that can impact insurance rates include the driver’s safety record, the location of the business, and the insurance provider’s policies.

Owner-operators can take steps to lower their insurance premiums by maintaining a good driving record, installing safety features on their vehicles, and shopping around for the best insurance rates.

How much does commercial truck insurance cost for owner-operators in California? 

On average, an owner-operator commercial truck insurance policy cost $875 per month, or $10,500 per year, in California. This includes primary liability, trucking physical damage, bobtail, cargo, and occupational accident coverage. Below is the cost breakdown for different coverages: 

Owner-operator commercial truck insurance coverage Average costs in California 
Liability coverage $525 per month
Trucking physical damage $170 per month
Cargo insurance$120 per month
Bobtail coverage $35 per month
Occupational accident coverage $25 per month

Keep in mind that these are just the averages. Your final rates will be different. Be sure to work with several carriers or a good broker like Smart Financial or Simply Business to compare several quotes to find the cheapest one for your trucking business. 

Types of commercial truck insurance coverage available to owner-operators in California

There are several types of commercial truck insurance coverage available to owner-operators in California. These include:

Liability insurance

  • Trucking liability coverage is required by law in California and provides protection against bodily injury and property damage claims made by third parties as a result of an accident.
  • Owner-operators can choose between different liability limits, with higher limits offering more protection but also resulting in higher premiums.

Physical damage insurance

  • Trucking physical damage coverage protects the owner-operator’s vehicle against damage caused by collisions, theft, vandalism, and other covered events.
  • The coverage includes two parts: collision insurance, which covers damage caused by collisions with other vehicles or objects, and comprehensive insurance, which covers damage caused by theft, vandalism, natural disasters, and other non-collision events.

Cargo insurance

  • Cargo coverage protects the owner-operator’s cargo from loss, damage, or theft while in transit.
  • Different types of cargo require different levels of coverage, with more valuable cargo requiring higher levels of coverage.

Occupational accident insurance

  • Occupational accident coverage provides benefits to owner-operators who are injured while on the job, including medical expenses and disability benefits.
  • Occupational accident insurance is an alternative to workers’ compensation insurance, which is not typically required for owner-operators in California.

Non-trucking liability insurance

  • Non-trucking liability coverage provides protection for owner-operators when they are driving their truck for personal reasons, rather than for work.
  • Non-trucking liability insurance covers damages and injuries that occur while the driver is not under dispatch or carrying cargo, such as during personal use or while driving to and from a job.

Bobtail insurance

  • Bobtail insurance provides coverage for owner-operators when they are driving their truck without a trailer, typically after dropping off a load.
  • This coverage is designed to protect owner-operators from liability claims if they are involved in an accident while driving without a trailer.
  • Bobtail insurance is not required by law in California but may be required by some motor carriers or shippers.
  • It is important for owner-operators to review their motor carrier agreements or contracts to determine whether bobtail insurance is required.
  • Even if not required, bobtail insurance can provide valuable protection for owner-operators, particularly those who frequently drive without a trailer.

By understanding these various types of commercial truck insurance coverage, owner-operators can make informed decisions about their insurance needs and ensure that they are adequately protected while operating in California.

The types of truck owner-operators in California and the insurance coverage they are required to have

There are several types of truck owner-operators in California, and the specific types of commercial truck insurance coverage they need can vary depending on their operations.

Some of the common types of truck owner-operators in California include:

  • Independent owner-operators who contract with motor carriers to haul freight
  • Owner-operators who lease their truck to a motor carrier
  • Owner-operators who own and operate their own authority

The type of owner-operator can impact the insurance coverage they require. For example, if an owner-operator is leased to a motor carrier, the motor carrier may provide certain types of insurance coverage, such as liability insurance, but the owner-operator may need to purchase additional coverage, such as physical damage insurance or occupational accident insurance.

If an owner-operator operates under their own authority, they will typically need to purchase all required insurance coverage themselves. This can include liability insurance, physical damage insurance, cargo insurance, occupational accident insurance, non-trucking liability insurance, and bobtail insurance.

In addition to the type of owner-operator, the specific operations they undertake can also impact the insurance coverage they need. For example, if an owner-operator hauls hazardous materials, they may require additional insurance coverage to protect against the unique risks associated with hauling hazardous materials.

It is important for all owner-operators in California to carefully review their insurance needs and purchase the appropriate types and amounts of coverage to adequately protect themselves and their operations. Working with a knowledgeable insurance agent can help ensure that all insurance needs are met and that appropriate coverage is in place.

Choosing the right owner-operator commercial truck insurance policy in California

Selecting the best owner-operator commercial truck insurance policy in California can be challenging. Owners-operators should consider factors like their budget, the type of cargo they transport, and the risks associated with their work. They should also take the time to compare different policies and commercial truck insurance providers in California to find the best coverage at an affordable price.

How to file a commercial truck insurance claim in California

If an owner-operator needs to file a commercial truck insurance claim in California, they should contact their insurance provider immediately.

The insurance provider will guide the owner-operator through the claims process and may request documentation, such as police reports or medical bills, to support the claim. The owner-operator should provide all necessary information and documentation promptly to avoid any delays in processing the claim.

During the claims process, the owner-operator should expect to communicate with their insurance provider and potentially other parties involved in the accident, such as other drivers or law enforcement officials. The insurance provider will work to resolve the claim as quickly and efficiently as possible while providing support and guidance to the owner-operator throughout the process.

Common commercial truck insurance claims and coverage scenarios in California

There are several common claims and coverage scenarios that owner-operators may face in California. These include:

  1. Accidents: Accidents can happen for many reasons, including driver error, equipment failure, and adverse weather conditions. Commercial truck insurance can provide coverage for damages and injuries sustained in these accidents.
  2. Cargo Theft: Cargo theft is a significant concern for owner-operators in California. Cargo insurance can provide protection for the goods being transported, including theft, damage, and loss.
  3. Vandalism and Damage: Commercial truck insurance can also provide coverage for damage to the vehicle caused by vandalism or other covered events.
  4. Workers’ Compensation Claims: Occupational accident insurance can provide benefits for drivers who are injured on the job, including medical expenses and disability benefits.
  5. Non-Trucking Liability Claims: Non-trucking liability insurance can provide coverage for accidents that occur when the driver is not under dispatch or carrying cargo.

Commercial truck insurance policies can help protect owner-operators from the financial losses that can result from these types of incidents. By investing in the right coverage, owner-operators can ensure that they are prepared for the unexpected and can continue to operate their business with confidence.


Commercial truck insurance is essential for owner-operators in California. Without adequate insurance coverage, they could be held personally responsible for damages and injuries that occur in an accident, leading to significant financial losses for the business. By investing in the right coverage, owner-operators can protect themselves, their vehicles, and their cargo while operating in the state.

When selecting a commercial truck insurance policy, it’s crucial to consider factors like the type of cargo being transported, the risks associated with the work, and the budget. Comparing different policies and insurance providers in California can help owner-operators find the best coverage at an affordable price.

In the event of an accident or other incident, owner-operators should contact their insurance provider promptly to file a claim and receive support and guidance throughout the claims process. With the right coverage and support, owner-operators can operate their business with confidence and peace of mind in California.

Thang Truong
Thang Truong

Thang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at realtor.com, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

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