Commercial Truck Insurance

Insurance Glossary
Plain English

30 key terms every owner-operator and fleet manager needs to know — from MCS-90 to bobtail, cargo coverage to the Carmack Amendment.

Bobtail Insurance

Coverage for a semi-truck that is being driven without a trailer attached. Applies when the truck is not under dispatch — for example, driving home after dropping a load.

💡 Often confused with non-trucking liability. Bobtail specifically covers the tractor without any trailer; NTL covers personal use broadly.

BMC-91 / BMC-91X

FMCSA financial responsibility forms filed by freight brokers and freight forwarders. The BMC-91X is the surety bond form; BMC-91 is the insurance form. Brokers must file one to obtain and maintain their operating authority.

💡 Brokers need a $75,000 BMC-91X surety bond under FMCSA rules as of 2013.

BOC-3

A FMCSA filing that designates a process agent in each state where a carrier operates. The process agent accepts legal documents on behalf of the carrier. Required for interstate operating authority.

💡 Filing a BOC-3 is a one-time step when establishing DOT authority. Process agent services typically cost $20–$50.

Carmack Amendment

Federal law (49 U.S.C. § 14706) that governs motor carrier liability for cargo loss or damage. Under Carmack, carriers are presumed liable for cargo damage unless they can prove one of the five Carmack defenses.

💡 This is why Motor Truck Cargo insurance is essential — Carmack makes you legally liable for freight in your care regardless of fault.

Cargo Insurance (Motor Truck Cargo)

Coverage that protects the freight a carrier is hauling against damage, loss, or theft while in transit. Covers the carrier's legal liability for goods entrusted to them, not the shipper's interest in the goods.

💡 Most freight brokers require $100,000 minimum MTC coverage before assigning loads. High-value shippers often require $250,000+.

Collision Coverage

Part of Physical Damage insurance that pays for damage to your truck caused by a collision with another vehicle or object, regardless of fault.

💡 Required by virtually all lenders financing commercial trucks. Deductibles typically range from $1,000 to $10,000.

Comprehensive Coverage

Part of Physical Damage insurance that covers non-collision losses to your truck — fire, theft, flood, hail, vandalism, falling objects, and animal strikes.

💡 Often bundled with collision in commercial truck policies under the term "Physical Damage."

CSA Score

Compliance, Safety, Accountability score assigned by the FMCSA based on roadside inspection results, violations, and crash data. Higher scores mean more safety risk and can trigger FMCSA intervention.

💡 Insurers check your CSA score during underwriting. High scores in the HOS, Driver Fitness, or Crash Indicator categories can make coverage harder to obtain or more expensive.

DAC Report

Driver Application for Consent (DAC) report — a background report on CDL drivers used by carriers and insurers. Shows previous employment, accidents, drug/alcohol violations, and termination reasons.

💡 A negative DAC record can affect both a driver's employability and an owner-operator's insurance rates. Drivers have the right to dispute errors under the FCRA.

Deadhead / Deadheading

Driving a truck with an empty trailer (not a loaded one). Different from bobtailing, which means driving without any trailer at all.

💡 Deadheading is covered under most primary liability policies, but you should confirm your policy covers empty-mile operations in your coverage declarations.

Deductible

The amount you pay out-of-pocket before your insurance coverage begins on a claim. Higher deductibles lower your annual premium but increase your out-of-pocket cost per claim.

💡 Raising your deductible from $1,000 to $2,500 typically saves 8–12% on Physical Damage premium. Avoid deductibles you couldn't pay in a cash emergency.

DOT Number

USDOT identification number assigned by the FMCSA to companies operating commercial vehicles in interstate commerce. Required to obtain operating authority and file insurance with the FMCSA.

💡 Any truck with a GVWR over 10,001 lbs operated across state lines requires a USDOT number. Intrastate requirements vary by state.

ELD (Electronic Logging Device)

A GPS-enabled device that automatically records Hours of Service (HOS) data for CDL drivers. Required by FMCSA for most drivers who previously used paper logs.

💡 Installing an ELD can earn a 5–15% insurance discount from carriers that offer telematics pricing programs.

FMCSA

Federal Motor Carrier Safety Administration — the U.S. government agency that regulates commercial motor vehicles, sets minimum insurance requirements, assigns DOT numbers, and administers operating authority.

💡 The FMCSA's minimum liability requirement for most interstate carriers is $750,000. Hazmat carriers may need up to $5,000,000.

General Liability

Coverage for bodily injury and property damage that occurs during non-trucking business operations — loading and unloading incidents, premises liability at your terminal, and personal injury claims not covered by auto liability.

💡 Primary Auto Liability covers on-road accidents. General Liability fills the gap for incidents at your facility, during loading/unloading, and off-road operations.

Hired & Non-Owned Auto (HNOA)

Coverage for vehicles you use in your business but do not own — rental trucks, employee-owned vehicles used for business errands, or vehicles temporarily in your custody.

💡 Common for carriers that occasionally rent or borrow trucks. Does not replace primary liability on vehicles you regularly operate.

Hours of Service (HOS)

FMCSA regulations limiting how many hours a CDL driver may drive and be on duty in a given period. Violations are recorded on roadside inspections and impact CSA scores.

💡 HOS violations are among the most common CSA citations and can directly increase insurance premiums by signaling driver fatigue risk.

MCS-90 Endorsement

A mandatory endorsement attached to your commercial truck insurance policy by the FMCSA. It guarantees that your insurer will pay claims up to the federal minimum limits even if the policy would otherwise exclude coverage.

💡 The MCS-90 is not your policy — it is a guarantee of last resort for the public. If it pays a claim, your insurer can seek reimbursement from you. It does not expand your actual coverage.

MVR (Motor Vehicle Record)

Official state record of a driver's license history, traffic violations, accidents, and license suspensions. Insurers pull MVRs during underwriting to assess driver risk.

💡 Most insurers look back 3–5 years on MVRs. Major violations (DUI, reckless driving, serious speeding) can make a driver uninsurable with standard carriers.

Named Perils vs. All-Risk

Named perils policies only cover losses from specific causes listed in the policy (fire, theft, collision). All-risk policies cover all causes of loss except those specifically excluded.

💡 All-risk cargo policies offer broader protection but cost more. Named perils are common in budget policies — read exclusions carefully before a claim occurs.

Non-Trucking Liability (NTL)

Coverage for a leased owner-operator when operating their truck outside the scope of their lease — personal use, bobtailing after a delivery, or driving to a maintenance facility not under dispatch.

💡 If you are leased to a carrier, their policy covers you while under dispatch. NTL covers the gaps. Required by most carriers as a condition of the lease agreement.

Occupational Accident Insurance

An alternative to Workers' Compensation for independent owner-operators who are not employees. Covers medical expenses, disability, and accidental death resulting from work-related injuries.

💡 Owner-operators are often excluded from state Workers' Compensation requirements. Occ/acc fills this gap at lower cost than a full WC policy.

Operating Authority (MC Number)

FMCSA-issued authority that allows a carrier to transport regulated commodities for hire in interstate commerce. Commonly called an "MC number." Required before a carrier can haul freight commercially.

💡 Insurance must be filed with the FMCSA before authority is granted. New authority triggers higher insurance rates for the first 12–18 months.

Physical Damage Coverage

Insurance that covers damage to your own truck from collision (hitting something) or comprehensive perils (fire, theft, weather, vandalism). Does not cover cargo or liability to others.

💡 Required by lenders on financed trucks. For paid-off older trucks, weigh the premium against the truck's market value — sometimes dropping PD on older units saves money.

Primary Auto Liability

The federally mandated coverage that pays for bodily injury and property damage you cause to other people and their property in an accident. Required by the FMCSA for all interstate carriers.

💡 Federal minimum is $750,000 for most commodities. Industry standard is $1,000,000. Hazmat requires up to $5,000,000 depending on commodity class.

Reefer Breakdown Coverage

An endorsement added to a Motor Truck Cargo policy that covers spoilage of temperature-sensitive cargo if the refrigeration unit malfunctions. Standard MTC policies exclude mechanical breakdown losses.

💡 Essential for refrigerated carriers. Specify whether it covers mechanical failure alone or also power failure and operator error, as policies vary.

Trailer Interchange

Coverage for physical damage to a non-owned trailer you are operating under a trailer interchange agreement — a contractual arrangement between carriers to use each other's trailers.

💡 Physical damage on your own trailer is covered by your PD policy. Trailer interchange specifically covers borrowed trailers under a written agreement.

Umbrella / Excess Liability

Coverage that kicks in after your primary liability limits are exhausted. A $1M primary policy + $4M umbrella gives you $5M total liability protection.

💡 Hazmat carriers, large fleets, and carriers moving high-value freight often need umbrella coverage. A single catastrophic accident can exceed $1M in damages.

Uninsured / Underinsured Motorist (UM/UIM)

Coverage that protects you if you are hit by a driver who has no insurance or insufficient coverage to pay your damages. Pays for medical expenses, lost income, and vehicle damage.

💡 With 12–14% of US drivers estimated to be uninsured, UM/UIM is an important but often skipped add-on. Costs are typically low relative to the protection provided.

Workers' Compensation

State-mandated coverage that pays for medical expenses and lost wages when an employee is injured on the job. Requirements for trucking companies vary by state and employee count.

💡 Owner-operators with no employees often use Occupational Accident insurance instead. Carriers with W-2 employees are typically required to carry Workers' Comp.

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