What Insurance Do You Need For Bringing On an Owner Operator?

Hey guys, I'm Hunter with Nelson Insurance. I'm going to go over what kind of coverage you guys need. If you are a motor carrier with owner wrapper is coming onto your authority. So I get a lot of people ask me about this, what kind of coverage do you need and what does it do, why do you need it and all this sort of stuff. So I'm going to just go over this here real quick. When you guys are a motor carrier here, you guys are going to have al auto liability and MTC motor truck cargo. If you guys use this slang with your insurance agent, they're going to be dang impressed. Okay, so the auto liability is going to follow the MC number. And so even if there are owner operators leasing onto your authority, the authority holder, the motor carrier is still going to be required to have that auto liability because it's following their coverage. Your guys MC numbers on the bill of lading, all that type of stuff. And I'm just going to throw on here real quick. GL&GL is general liability not required. MTC motor truck cargo and auto liability are the ones that are required. And so that's why I threw those on first. And then the same thing goes to the cargo. The cargo needs to be under the motor carrier's authority. And so there are all sorts of ways to do this. But the motor carrier needs to have these coverages here. And you know, people are keeping percentage of revenue, some people are billing the owner operate for the insurance, all that type of stuff. And so the owner wrapper is going to be on two different insurance policies. And you got to think about how this all comes into play here. So the owner operator now what kind of insurance do they need? They're going to need NTL non trucking liability, otherwise referred to as bobtail insurance. And then you have the physical damage. Since the owner raptor is not going to own that truck most of the time, then the owner wrapper is going to go get physical damage because it's going to be their truck. Right? I suppose you can, you can figure out some way where if you guys own the truck, whatever, but the physical damage is going to be by the owner rapper because it's their name on the loan for the truck, all the type of stuff, it's their bank or need the insurance and so you'll get the physical damage. And so hopefully that quickly just kind of summarizes the insurance there on who's requiring what and who needs what. So I'll get into this here real quick. The physical damage is obviously not required. Just it's all in the owner operator. For all the motor carrier cares. They have it, they don't have it. It's their deal. It pays for their truck, whatever. Right. But why do they need bobtail insurance or non trucking liability? Non trucking liability is going to come into play when they're not on the bill of waiting. That's why it's called bobtail insurance. It comes into play when the load's done. They're running the gas station, they're running home, they're doing whatever. And that non trucking liability is going to be way, way cheaper than the auto liability. You're going to be anywhere from 500 to $900 you can get for 450. I've seen it for the non trucking liability versus the auto liabilities can be anywhere from 5 grand to 15 grand. Really just depends on where you guys are at. Right? So that's why you need these two coverages here. And why do you care about this? As a motor carrier you need to have this coverage because it's your guys name on the side of the truck. If they get into an accident and the owner wrapper does not have non trucking liability, they're going to go to the next person in line which which is going to be the motor carrier. So you have to have to have to enforce that. These owner rappers have this insurance. Right. And so one way you could do this, what a lot of people do is they just hey, go find insurance they call progressive. Give the motor carrier COI days done. Right. Only problem is you never know what's going to happen there. It's the same reason you have filings for insurance. What happens if you provide a COI and the insurance cancels? Right? What happens if it cancels? What happens if you know there's a number of things it could non pay, it could be voided, number of different things, right. It could be written incorrectly. If they call an agent who doesn't know what they're doing, doesn't write in the correct policy, it's not going to work out real well. So one way you guys can get around this is called a master policy. And this could even incentivize auto rappers to come out of your plan too. Because there's all sorts of issues of like I just talked about, what happens with what happens if the insurance is not in place. What happens if they can't find something that's cheap? They call it progressive. Progressive is usually not the most competitive on non trucking liability. They can find it for half the price through a master policy through a big agency. And the other thing too is, I mean, yeah, like I said, it could be just tough for them to find insurance and it might be kind of expensive even for non trucking liability. So what you guys can do is get a master policy, incentivize these owner wrappers to come on. Or, you know, if you're an owner operator, go find somebody with a master policy because you might be able to find a larger policy with cheaper rates. I'm gonna give you guys an example here. Progressive, you might be paying 900 to $1,100 or something like that for the non trucking liability, and they might come out with a 8% rate. So I'm gonna do the math here real quick. Let's say you're calling. Say you're calling just like insurance company directly, okay? And they're coming out with the NTL, excuse my bad handwriting here, at 1100 bucks. And then this guy's got a new truck. Let's just say. Let's not even say it's new. It's just a half decent truck here, right? Let's just call it 100 grand. It is not uncommon. Find 100 grand for a truck and they might have an 8% rate is the best I can find. Just because they called the insurance company themselves. They did their little shop in there. They got eleven hundred dollars plus eight thousand. Because it's 8% rate, you're now at 9100 bucks. So this owner rapper now is paying 9100 bucks. He's like, gosh dang, I don't have to worry about that. What if you got him a master policy where everybody's NTO was? We'll call it $600. You probably find it for a little bit cheaper, but we'll just be safe there. Let's see their shoot. They're giving them a 4% rate you could probably find cheaper there too. I'm not. I don't want to go out and give outrageously low numbers here. I want to be, you know, somewhere in the middle here. But These numbers are 100% realistic. 9,100 bucks. 4,600 bucks. Now you can incentivize these guys to come to you. Hey, I've got master policy. I know the rate to be 4%. You have $100,000. Truck do 4,000 bucks. Non truck liability, $600. Now, you as the motor carrier know these guys have insurance. You are the one who's looking at that policy. Seeing who has insurance, you don't need to ask them for a coi. You have to worry about the coverage being canceled. Nothing on those lines and you just saved them $4,500 to come to you. And hey, I'm gonna make an extra 4,500 bucks a year because we got a master policy and be cheaper. So that is how you can incentivize these owner operators to come to you. If you're an owner operator, you kind of know where to go look at and tap that. What coverages are going to be required by who? So you guys know you might need general liability, motor truck, cargo, auto liability. The owner operator is going to have non trucking liability and physical damage. So there's that. You guys could do the same thing with occupational accident. You could have a master policy for occupational accident. Hey guys, I'm going to be covering, you know, some of these guys for occupational accident have vision, dental built in. These guys know they're going to be protected. So it's almost like a work comp policy, but not quite. It's an accident policy. So these truckers and, and shoot, with you're saving this much money, you go through an occupational accident policy, those are typically gonna run. I'll just say ock ack here you might be looking about $140 a month for a dang good occupational accident policy. So here is that 140 bucks a month for a good occupational accident policy. It's not even cheaper than what this was. If they went and shopped on their own, boom. Now you got another incentive. Now you got another deal. Incentivize them to come on because now they're going to be protected. They get hurt in the job. And occupational accident is only for 1099. So those owner operators, if they are employee drivers, you guys are going to go get them workers compensation. And occupational accident is going to be a lot cheaper than workers compensation. Workers compensation has got a little more in coverage, but at least occupational accidents gave a little bit of those benefits, you know. So that is how all that rolls. Hopefully this is not too much of a mess here. Hopefully you guys understand what I'm saying here. But again, I'm Hunter with Nelson Insurance. Appreciate you guys watching. If you guys want to add owner operators wanted to expand your fleet, please feel free to call me. We have three dedicated programs for master policies. I'm not talking, I'm going to go right. Some of the big names, you know, who would do just about anybody. These are master policies built for owner operators. So have good coverage, there'd be a fixed price, typically across the line. And it's just going to keep life really, really easy for you, incentivizing other truckers to come onto your guys fleet and grow your guys company. So, again, if you guys have any questions, please reach out. I'm happy to help. I'm Hunter with Nelson Insurance Agency. We're based out of here, out of Sioux Falls, South Dakota, and we work with a lot of fleets, so thanks.