3 Cost Saving Insurance Tips For New Owner-Operators
Are you ready to set off on your own, driving a truck under your own operating authority? Starting a trucking business is one of the most exciting things any driver can do, but it's also a complex and technical process. Hauling freight as your own trucking company is more than just changing jobs or careers; it's a fundamental change in your daily life.
As a new owner-operator, insurance will be one of your primary operating expenses after the cost of your truck. The more money you can save on your insurance rates, the easier it will be to turn a profit in your first few years as an operator. While some insurance costs are unavoidable, these three tips will help you understand your premiums and save as much money as possible.
1. Know Your Risk Factors
Insuring your business isn't the same as insuring your private vehicle. The risk factors for a commercial semi-truck can differ greatly from a commuter car, and insurance companies assign premiums accordingly. However, there are a few similarities. For example, insurance companies will look closely at your driving record and experience operating commercial vehicles and semi-trucks.
Keeping your driving record clean should be a top priority if you plan on launching your trucking company soon. Accidents or traffic violations can have a surprisingly large impact on your insurance commercial insurance premiums, potentially raising your bar for profitability by much more than you might expect.
2. Carefully Define Your Operations
Part of your business plan should include your area of operations and the cargo you intend to haul. The farther afield you operate, the more you should expect to pay for your commercial insurance. Likewise, certain cargoes will be much more expensive to insure than others. These factors can mean the difference between relatively affordable premiums and much higher rates.
If you only operate regionally and handle non-hazardous or lower-value cargo, you can expect to pay less on your premiums. When working with an agent to purchase insurance, carefully define your operations to avoid purchasing more insurance than you need.
3. Consider a Cheaper Rig
As with personal vehicle insurance, your truck's age, model, and overall value will impact your premiums. Financing a brand-new, expensive truck will result in higher overall premiums. Your monthly operating expenses may be uncomfortably high when combined with the monthly payments for a newer rig.
However, insurance companies also factor in modern safety features found in newer trucks. As a result, the sweet spot is often a less expensive rig that's still relatively modern. By choosing a truck that's a few years old, you can save on your startup costs while also potentially reducing your monthly insurance premiums.
For more information on semi-truck insurance, contact a professional near you.