Auto Insurance Deep Dive: Insurance Requirements in the Commercial Trucking Industry

Jan 10, 2021

Today’s post continues Coffman Law’s “Auto Insurance Deep Dive” blog series focused on providing our readers with in-depth, yet easy-to-understand discussions of timely auto insurance topics. Our blog today specifically concentrates on insurance requirements for commercial truckers. Given the massive size and weight of most commercial trucks, the federal government has set substantially higher mandatory minimum insurance requirements for commercial trucks than it has for regular drivers – and thanks to pending legislation in Congress, this minimum may more than double in the near future. This post first discusses the heightened dangers and potential litigation expenses posed by truck crashes before providing a general overview of the minimum insurance requirements imposed by the government on commercial truckers.

Why is Insurance Vital to the Commercial Trucking Industry?

As we discussed in a prior blog on truck crashes, large commercial trucks pose significantly higher risks on the road than virtually any other type of vehicle. These trucks can weigh upwards of 70,000-80,000 pounds, and they also typically carry fragile or hazardous materials on roads shared with other cars, motorcycles, bicycles, and pedestrians. In fact, according to the Insurance Institute for Highway Safety (“IIHS”), trucks can weigh up to 30 times more than a typical passenger car. In light of these trucks’ sheer size as well as the long hours typically worked by commercial truck drivers, it becomes clear why truck crashes are not only common but also potentially deadly.

Given the factors discussed above, it makes sense why the federal government would regulate commercial trucking mandatory insurance minimums more vigorously than it does for passenger vehicles. However, outside of the aforementioned issues, commercial trucking companies must also take into account potential litigation costs when purchasing their insurance policies. In the last two years alone, American courts have approved several multi-million dollar settlements in high-profile truck crash cases. For example, in 2018, a Texas jury awarded $101 million to a driver whose car was smashed into from behind by a truck carrying oil (Information on other recent multi-million dollar truck crash settlements can be found HERE). Thus, many commercial trucking companies actually purchase insurance policies that far exceed mandatory minimum requirements in an effort to reduce their liability in the event of a costly crash.

Mandatory Minimum Insurance Requirements for Commercial Truck Drivers

The Federal Motor Carrier Safety Administration (“FMCSA”) requires any driver seeking their Operating Authority (i.e., the driver’s right to operate a commercial vehicle) to meet certain minimum insurance requirements. The FMCSA’s mandatory minimum requirements for public liability insurance are summarized in the following chart:

Type of Freight Mandatory Minimum
Non-hazardous freight moved in vehicles under 10,001 lbs.         $300,000
Non-hazardous freight moved in vehicles over 10,001 lbs.         $750,000
Oil moved by private carriers         $1,000,000
Other hazardous material moved by private carriers         $5,000,000

The State of Illinois also maintains its own minimum insurance requirements for commercial truckers. The state’s requirements for intrastate travel are summarized in the following chart:

Type of Freight Mandatory Minimum
Household goods         $300,000
General freight         $750,000
Oil transport         $1,000,000
Hazardous materials         $5,000,000

For Illinois-based commercial truck drivers planning to engage in interstate transport, they must comply with the state’s rules outlined above in addition to the FMCSA’s mandatory minimum insurance requirements.

Finally, while federal and state governments require truckers to hold certain levels of public liability insurance, there are also other types of insurance that, despite not being mandatory in all states, can still be helpful add-ons to a driver’s baseline policy. Those different types of insurance coverage can be grouped into three categories:

– Physical Damage Insurance covers any damage to a truck or tractor. This type of coverage usually comes into play when a truck is stolen, vandalized, or damaged by natural causes.

– Bobtail Insurance covers the tractor whenever it is not attached to the trailer (driving only the tractor without the trailer is known as “bobtailing”). Bobtail coverage typically applies regardless of whether the driver is on the clock or not.

– Cargo Insurance covers the items being transported in the trailer. Though it is not rigidly required, most interstate cargo companies will not contract with a driver lacking cargo insurance. The usual minimum level of cargo insurance required is $100,000, but this can vary depending on the items being carried.

If you are the victim of a truck crash, do not hesitate to reach out to Coffman Law. Owner and Founding Partner Brian Coffman has handled virtually every type of crash case, and through his experience defending corporate insurers for years prior to founding his own firm, Brian has also come to understand the strategies typically employed by insurance companies in these types of cases. Click HERE to contact our office for a free consultation.


About Coffman Law Offices, P.C.

Coffman Law is committed to providing superb legal representation for people who are suffering from severe personal injuries or are dealing with the loss of a loved one due to negligence or misconduct. Coffman Law is a small, results-driven firm focused on ensuring that clients receive the compassion, attention, and consideration that they need to seek adequate redress for injuries or loss. The firm is led by Owner and Founding Partner Brian Coffman, who has dedicated his career to helping accident victims navigate the legal system and obtain redress for their injuries. If you have been injured or lost a loved one, contact Coffman Law today for a free consultation.