What Insurance Do You Need To Start Your Authority?

In this video I'm going to run through what insurance is required to get you guys authority active. Let's get into it. So to get your guys authority active you the main thing that they're going to need, the FMCSA is going to require is your auto liability. A lot of companies get this confused with general liability. So there's auto liability and general liability. General liability might be required by some brokers. General liability is only going to be really protecting the business sense, which is why it's so cheap in the trucking space versus a contractor who paying 50 grand for their general liability, their big operation. Because truckers are on the road obviously 99% of the time. So auto liability is going to protect the other person or protect you from being sued by the person in an accident if you get an accident with them while you guys are driving. So it's auto liability. Auto liabilities with the FCC requires, which it just said. And to get your authority active you need 750,000. If you're just doing some general freight there's going to be a million dollars in auto liability required. If you're hauling some oil field equipment, maybe some less crazy hazmat stuff or anything on those lines. And then hazmat is going to be 5 million in auto liability that is going to be sent to the FMCSA. So this is called federal filings or the MCS90. When you go get insurance, if you have an insurance agent that knows what they're doing, they should be putting federal filings or the MCS 90 on that insurance policy. And what that is the MCS 90 is going to be an endorsement to the auto liability policy. The insurance company will then send out to the FMCSA proving that you have the auto liability in place to start hauling loads. Pretty much. And yeah, most people be doing 750 if it's anything crazy, you might need 5 million. And then really besides that, the only one that's going to be required with FMCSA to get your authority active will be cargo. If you are a household good mover, if you're household good mover, you're going to need a, you're going to need a cargo policy with a form H which is the endorsement to prove to the FMCSA that you have cargo insurance. Cargo insurance is not required by the FMCSA to get your authority active if you are a general freight trucker, but it will be required by brokers. So I'll kind of get into here what brokers are required because that's A little different than what the FMCSA requires to get your authority. Brokers are almost always going to be looking for 100,000 in cargo insurance. Again not required by FMCSA, but you need 100,000 in cargo insurance if you're hauling general freight. If you're hauling anything kind of crazy, the broker might give you guys something different. Like I know some guys need 150, 250 or hauling autos, anything on those lines. Now this goes back to general liability. This is not as common as cargo. Cargo is always be required basically every time by brokers, maybe a couple few exceptions. But general liability is less required, but it will be required by some and you will need a million dollars in general liability if the broker requests it. And so some things like that general liability is going to cover are going to be if you're throwing a rat strap over and you hit somebody, it's going to cover advertising and personal injury. So if you go and advertise or hurt somebody's name, slander somebody's name, you can be sued for that. Any business operations really that fall under the trucking space. Now there's general liability, something that's not required by brokers. Brokers care less. The FMCSA required or could care less, but that will be required by your lien holder or your bank or your whoever is giving you the loan on your truck or even just you is physical damage coverage. Physical damage coverage is comprehensive and collision. And so what this does is it gives you coverage for your truck because auto liability and none other coverages will give you coverage for your truck or trailer. So what you do with your physical damage coverage is you're going to request it. I hate any compensation on this vehicle, any physical damage, you're going to give the value of that truck or trailer and or to your insurance agent or the representative. And what that value is going to do is not going to mean that hey, I'm going to insure my truck for 100 grand, I'm going to get 100 grand. In the event of a claim, what it's called a state of value. And what that is is they're going to give you the lesser of two. It's kind of ridiculous, but they're going to say, okay, what do you want insure your truck for? I'm going to say $100,000. Let's say you have a claim the next week and adjuster comes out, looks at your truck and they go, looks like we can buy you the exact same truck, same miles and everything for about 40 or for about $80,000. So what they're going to do is going to give you the lesser the 2 of market value or the stated value. So they're going to give you 80 grand if it's worth 80 grand. Now that happens vice versa too. If you insure for 80 grand and it's worth 100 grand, they're going to give you less than 2. They're going to give you the 80 grand that you insured for. So you really want to be as accurate as you can be on that stuff because that's what they give you. There are all sorts of other coverages I'd recommend. Those are the ones to really just getting started off that you're definitely going to need if you're a reefer. If you're, if you're hauling a reefer, you need reefer breakdown. Again, this is not, this is not a situation by everybody. Like you're not gonna, I'm not gonna give you these coverage and say, oh, I don't need anything else because this YouTube video. These are the general guidelines here. There's reefer breakdown. If you got a reefer, there's pollution liability for hauling hazmat or even if you're hauling reefer because some of that stuff can melt and get into the ground or contaminate anything. And pollution is defined as anything where it's not supposed to be. So it could be water and gas tank, be in the stream with fish in it, whatever the case may be. So you got all those coverages. There's umbrella coverage which is going. Which is kind of exactly how it sounds. It's going to be an umbrella over all your different liability policy, your auto liability, your general liability and this and that. That's not a half bad idea if you know, you're a little worried about a million not being enough or just getting sued and things really could go over a million pretty quick, especially if you kill somebody and it was a pretty serious accident. Definitely not a half bad idea. Workers compensation, if you have the employees. Workers Compensation is for W2 employees. Occupational accident is for 1099 or independent contractors. This is also not a half bad idea because it protects them from getting hurt on the job. So those are kind of the baseline coverages. Again, just recap on this thing. You need auto liability to get your authority active through the FMCSA. You're definitely going to need cargo 100,000 at the very least, unless you're hauling grain or something to get accepted by brokers. Physical damage, if you have a loan on your truck or you at all just want your truck insured. Those are kind of the basic coverages there. If you guys have any questions, please let me know. I got a blog on this, and I help people with this all the time, so thanks for watching Sam.