“Bobtail Insurance coverage” 101 for owner-operators

After my article final month on the best way to keep away from overinsuring your trucking enterprise, Ed requested a query about “bobtail insurance coverage”. The expression itself is slang. It isn’t a authorized identify for insurance coverage or insurance coverage protection. As such, bobtail insurance coverage means various things to completely different folks, relying on their viewpoint. That is the place the confusion that reigns amongst some owner-operators begins.

Most consider bobtail insurance coverage as insurance coverage to get the truck repaired after an accident. Some owner-operators have been led to imagine that bobtail insurance coverage is a type of “industrial common legal responsibility” (CGL) insurance coverage, which was lined partially in final month’s article. Opposite to fashionable perception, the FMCSA doesn’t not require any trucking firm or truck proprietor to have CGL insurance coverage. Whereas it’s advisable for a trucking firm with a bodily office (dispatcher’s workplace, upkeep store, warehouse, and so forth.) to have a CGL coverage, it’s infrequently helpful insurance coverage for a owner-operator of a truck, whether or not leased to a transporter or not.

[Related: Don’t over-insure your trucking business]

Some trucking firms see bobtail insurance coverage as a technique of making an attempt to guard themselves from lawsuits when the owner-operators who’re leased to them drive their vehicles of their spare time. Or, in different phrases, not within the strategy of transport.

When owner-operators employed from a provider say they only need the compulsory bobtail, what we’re asking for is what known as “non-trucking legal responsibility” (NTL) insurance coverage. NTL is the one required a part of any bundle of protection that you just would possibly name “bobtail insurance coverage”. NTL protects us from duties whereas we’re driving our truck in our private time and never beneath the management of the trucking firm we’re employed to. If we trigger harm to somebody or somebody’s property for which we’re accountable, this insurance coverage is what pays for that harm and claims. In different phrases, we had an accident once we weren’t beneath the management of the trucking firm we had been employed to and we had been at fault. (IMPORTANT: NTL is NOT, and by no means acts as, industrial legal responsibility insurance coverage.)

One other insurance coverage protection obtainable for buy with bobtail insurance coverage is what known as “bodily harm” and / or “complete” and “collision”. It’s the insurance coverage that repairs our truck when now we have been concerned in an accident for which we’re accountable. Bodily harm insurance coverage applies to any accident always, together with when it’s beneath the management of the trucking firm we’re employed from and once we are on day without work and never driving for the provider to which we’re employed. It’s the solely insurance coverage protection that may enable your truck to be repaired when you find yourself concerned in an accident for which you’re accountable. The bodily harm is not required by legislation, however extremely advisable for any truck proprietor to guard their funding. Personally, I might by no means purchase a legal responsibility aside from trucking and I might select to not purchase bodily harm.

In some circumstances, bodily harm may even defend a truck proprietor when he isn’t at fault for an accident. This occurs when the opposite driver’s insurance coverage firm denies the declare. If this occurs, the truck proprietor’s insurance coverage firm will pay the declare (truck restore prices) after which search to get better these prices from the opposite driver or the opposite driver’s insurance coverage firm. .

I might by no means reject or refuse “Uninsured” and “Underinsured” motorist insurance coverage as a part of my bobtail insurance coverage coverage. These are life-saving insurance coverage coverages that present us with insurance coverage for bodily damage and property harm when the opposite driver is at fault however doesn’t have insurance coverage or doesn’t have sufficient insurance coverage to cowl the associated fee. of the criticism.

These two covers appear simple sufficient to know, however usually occasions we do not notice their true worth. That is very true with regards to protection for underinsured motorists. Many private automobile drivers select to have solely minimal protection for his or her private car legal responsibility insurance coverage. Protection quantities are written (proven on the coverage) as follows: Per Individual / Per Accident / Property Injury. State minimal legal responsibility coverages vary from $ 10,000 / $ 10,000 / $ 0,000 to $ 50,000 / $ 100,000 / $ 25,000. After we are in an accident and the opposite driver is at fault and solely has a minimal protection of $ 10,000 per individual in bodily damage, what occurs when our medical prices are $ 80,000? ? That is when our underinsured motorist insurance coverage kicks in and saves the day, serving to us keep away from cumbersome and dear lawsuits.

For my part, this protection is essentially the most useful a part of uninsured and underinsured motorist insurance coverage.

To study extra about industrial auto insurance coverage (trucking), discover extra from W. Joel Baker through www.TruckOwnersInsurance.com.

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