Hotshot Trucking Insurance Guide

Written By Charlotte Insurance on March 14, 2022. It has 0 comments.

a yellow truck insured with hot shot trucking insurance

You’ve invested in a heavy-duty pickup and a good trailer. You’ve got all your tie-downs and other equipment. You’ve got clients lined up, ready to call on you.

You’re ready to be the go-to guy for companies that need small deliveries made in a pinch. You’re fast, reliable, and ready to build your business.

Your hotshot trucking business is more than your truck, trailer, or cargo. It’s also about protecting against risks – to yourself and to other drivers on the road. One serious accident can put you out of business.

That’s why hotshot trucking insurance is an integral part of your business. Some coverage is even required.

Don’t think of insurance coverage as a box to check off and then forget about. Think of it as what it is – an investment in your hotshot trucking future and financial security for yourself and your company.

Here’s what you need to know about hotshot trucking insurance coverage.


What is Hotshot Trucking Insurance?

It’s a commercial auto insurance policy designed specifically for businesses or individuals transporting cargo using a pickup truck and trailer.

If you’re looking to get into the hotshot trucking business, you’re going to need insurance. Most brokers and shippers won’t work with you if you don’t have it, and the Federal Motor Carrier Safety Administration (FMCSA) requires it.


Who Needs Hotshot Trucking Insurance?

If you’re using your pickup truck to deliver less-than-loads (LTLs) on tight deadlines, usually to single customers, you’re a hotshot trucker. It doesn’t matter if you’ve also got a big rig that you use for traditional trucking, in state or across state lines. Hotshot trucking is its own category.

There are three types of trucks used in hotshot trucking:

  1. Class 3 (10,001–14,000lbs): Includes GMC Sierra 3500, Ram 3500 and Ford F-350
  2. Class 4 (14,001–16,000lbs): Includes Chevrolet Silverado 4500HD, Ford F-450, and Ram 4500
  3. Class 5 (16,001–19,500lbs): Includes Chevrolet Silverado 5500HD, Ford F-550, Peterbilt 325, and Ram 5500

Beyond your pickup, you also need a trailer. Hotshot truckers tend to use specific types of trailers. These are the most common:

  • 20 to 40-foot gooseneck trailers (common)
  • Dovetail trailers (common)
  • Deckover trailers
  • Lowboy trailers

If you’re using your truck and a trailer to make smaller deliveries faster than traditional trucking allows, you’re probably a hotshot trucker. Protect yourself with the right insurance coverage.


What’s Covered in Hotshot Trucking Insurance?

The coverage you get all depends on what you choose to include in your policy. In general, your insurance coverage needs to protect three things:

  • Truck
  • Trailer
  • Cargo

Hotshot insurance will often cover property damage as well as medical injuries and liability. Your trailer will also be covered by fire, theft, and vandalism.

For your cargo, the coverage needs to match your hotshot freight. Look for policies that offer flexibility to match the value of your cargo, especially if you’re hauling multiple less-than-load (LTL) loads with multiple Bills of Lading (BOL). Each load should be insured for up to $100,000.

Once you purchase your truck and your trailer, the biggest expense in hotshot trucking is often insurance. Think of it as an investment in your business and your future. If something goes wrong out on the road, one accident could ruin you financially. With the right insurance, you’re covered and, more importantly, you can recover and get back on the road.


Forms of Hotshot Trucking Coverage

The more coverage you purchase, the more protected you’ll be. Talk to your independent insurance agent about the following coverage to include in your hotshot trucking insurance policy:

Liability Insurance

Standard to any auto insurance policy, liability coverage pays out when you’re at fault for an auto accident. It covers the other drivers’ medical payments and property damage. While the FMCSA requires a certain amount of liability coverage, it’s always better to purchase more than the minimum.

Cargo Insurance

Coverage for your cargo protects against fire, theft, vandalism, and other losses. Federal law requires a certain minimum but most brokers and shippers will want you to have much more coverage than the minimum, at least $100,000 per load.

Comprehensive Insurance

Just like any other personal or commercial auto policy, comprehensive coverage is available for hotshot trucking insurance, too. This protects you when damage to your truck and trailer occurs due to theft, vandalism, fire, or other physical causes of loss that aren’t tied to an accident with another vehicle.

Collision Insurance

Collision should also sound familiar as well. If you’re involved in an accident with another vehicle or stationary object or you experience a rollover, collision coverage pays the claim. When you have both comprehensive and collision coverage, it’s often referred to as “full coverage.” You’ve seen how people drive on the roads – these two should be easy-adds to any hotshot policy.

Towing and Storage Insurance

When your truck or trailer is damaged in an accident, you’re likely going to need a tow and a place to house both until the repairs can be made. Towing and storage coverage covers the cost for this, up to your policy limit.

Loading and Unloading Insurance

You work hard to arrive to pick up a load and drop it off on time. You’re known for being fast and efficient. But the cargo is vulnerable during loading and unloading. This coverage covers the cost if the cargo is damaged during either of these times.

Earned Freight Insurance

Earned freight is a form of business income loss coverage for hotshot truckers. Whether you’re in an accident or the cargo was damaged while being loaded, if you’ve got a covered peril and made a claim, your lost income can be covered when the cargo can’t be delivered.

Bobtail Coverage Insurance

Bobtail coverage provides extra liability for your truck and your trailer. It covers your truck in those times you’re driving it without the trailer (bobtailing). It also covers the tractor when it’s not hitched to a trailer, whether your truck is under dispatch or not.

Downtime Insurance

When your truck or trailer is down for repairs after an accident, you’re out of work until they’re fixed. Downtime coverage pays you for that lost income. In most cases, downtime pays up to $100 per day for 30 days.

Medical Payments Insurance

Liability coverage pays for the other drivers’ injuries after an accident. Medical payments coverage pays for your injuries. Because of the costs of healthcare in general, don’t skimp on this coverage. The last thing you need is to be out of work for injuries and get hit with a $100,000 hospital bill on top of it.

Family Emergency Expenses Insurance

Hotshot truckers usually work close to home, but not always. If you know you could be in an accident far from home, consider family emergency expenses coverage. It pays up to $2,500 for the travel expenses your family will incur to get to you. That way you don’t have to let finances keep your loved ones from being with you in a time of need.

Equipment Coverage

Your trailer isn’t the only equipment you need to get the job done. Equipment coverage takes care of your ramps, chains, tarps, tie-downs, and binders. It will all be protected against fire, theft, vandalism, and collision accidents.

Debris Removal Insurance

Sometimes the only thing hurt in an accident is your fender and your pride. But sometimes precious cargo goes flying across the highway, demolished into thousands of pieces. You’ll likely be responsible for the clean-up. Debris removal coverage pays the “reasonable and necessary” costs for getting the debris picked up.

Broadened Pollution Insurance

Broadened pollution coverage is a form of liability insurance when you’re hauling cargo that can also become a possible pollutant. In an accident, pollution can be added to the environment from your cargo, and you may be held liable for it. This coverage protects you so you’re not paying out of pocket for it.

Loss Mitigation Insurance

You may know this as sue and labor coverage. Loss mitigation pays the costs you incur for preventing damage to cargo.

GAP Coverage

If you have a loan on your truck or you’re leasing it, you definitely need to consider GAP coverage. This pays the difference between what your vehicle is worth and what you actually owe on it if your truck is totaled in an accident. The last thing you need after a devastating accident is to keep paying a lease or loan when you don’t even have the vehicle anymore.

Umbrella Insurance

While not typically included within a hotshot trucking insurance policy, umbrella coverage can be purchased as an additional form of liability coverage. It gives you more protection when you’re responsible for the damages.

For those larger than life, once-in-a-lifetime accidents, your policy may not be enough to pay the full cost. Once you hit a policy limit, you’re responsible for the remaining amount. With an umbrella policy, that remaining amount is covered – as long as it doesn’t exceed your umbrella policy limit.

Thankfully, you can purchase large umbrella policies for much less than you’d expect. Think of it as an extra layer of financial protection when you need it most.


Is Hotshot Trucking Insurance Required?

Because of the risks of auto accidents, as well as catastrophic damage, there are insurance requirements for your hotshot trucking business, as well as requirements for obtaining coverage.

Before you go into business as a hotshot trucker, make sure you meet these requirements.

  • The Federal Motor Carrier Safety Administration (FMCSA) requires a minimum of $750,000 in liability coverage. Brokers and shippers will likely want you to have a minimum of $1,000,000.
  • You’re required to carry a minimum of $5,000 in cargo insurance. Brokers and shippers will want you to have at least $100,000 in coverage.
  • If you cross state lines, you’ll need an MC number.
  • Both MCS-150 and BOC-3 filings are required if you’re new to hotshot trucking.
  • You’ll also need an International Registration Plan (IRP) registration for your truck and a Permanent Trailer Identification (PTI) for your trailer.

In both North Carolina and South Carolina, you’re required to have a CDL if the gross vehicle weight rating (GVWR) of your single vehicle (with trailer and/or cargo) will be 26,001 pounds or greater. Less than that, and you likely don’t need it. Always check with state requirements first based on your specific truck and trailer.

That being said, there are benefits to having a CDL. Having it could help reduce the cost of your insurance premiums, so it may be worth getting, even if it’s not required.


How Much Does Hotshot Trucking Insurance Cost?

The big question everyone wants to know is how much insurance will cost. And the answer is that it depends. We don’t encourage anyone to purchase insurance based on cost. The best protection you can offer yourself and your business is a robust hotshot insurance policy.

There are often things you can do to help yourself pay a little less.

A variety of factors go into the price of a hotshot insurance policy:

  • Deductible and policy limit: Make sure you choose a deductible you can reasonably afford and keep your policy limit at a reasonable level to protect you after an accident.
  • Personal credit score: Pay your bills on time and be mindful of how much debt you carry.
  • Experience in the field: Newer companies and drivers may have higher premiums in the beginning. If you rarely file claims and maintain a safe driving record, your premiums will likely decrease over time.
  • Class of truck
  • Types of coverage you need: The more coverage you add to your policy, the higher the cost.
  • Number of claims you’ve had over a certain number of years (typically 3 years)

Annual premiums can range anywhere from $5,000 per year up to $30,000. One way to save on the total cost is to pay your premiums in full for the year. This can lead to a discount that you’ll really feel.

It’s important to talk to an independent insurance agency like ours who can get quotes from a variety of companies. That way you can choose the best coverage at the best price for your hotshot trucking business.


In Conclusion

Insurance coverage isn’t optional for hotshot trucking but the bare minimum won’t be enough, either. If your business involves being on the road and delivering cargo, the right insurance policy protects everyone involved.

Contact Charlotte Insurance today to discuss your coverage options and to get a free estimate on a hotshot trucking insurance policy. We can answer your questions and provide you with multiple options to help you find the right coverage for your business.

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