I'm just now starting the process to get my own authority but I would have done so about 6 months ago if I knew what I know now.
Previously I was quoted over $30k/year insurance (I live in FL) for a new authority through progressive. Needless to say I did not take that and it actually stopped me from getting into expediting/hotshot. I sidelined my business plans at that point.
I was a bit frustrated being I've seen several people here on this forum and else where stating their first year was sub $20k some in the $15k range. I looked around but there wasn't much I could find as for a reason on why such the discrepancy in prices.
I finally found out what that discrepancy is. Maybe people with more experience will be like duh that is obvious but I'm sure many others are also wondering..
It's cars.. Do not haul cars your 1st year. When I originally requested a quote I told them I'd be hauling a flatbed trailer with general freight, but also haul vehicles sometimes. Even if you haul 1 car a month on your flatbed trailer you are put into a different classification being a "car carrier" and insurance for car carriers is much more than normal freight.
Basically your 1st year stay the hell away from cars. You can add in being a car carrier after your 1st year at a much more reasonable price. Stick to general freight your 1st year with a new Authority.
The second issue that wont affect me but might affect others is oil fields. I didn't get into detail too much with the agent, but he did say if I was hauling on to oil fields it would require a different policy and it would cost a lot more.
Last.. Pick the right insurance company from the start. After 3 years your insurance for a new authority will drop dramatically but how much of a drop is based on the age of your policy not the age of your MC#. If you start with 1 insurance company then switch after a year to another.. You will not get the same rate drop at the 3 year mark vs if you keep the same policy number. That is the key.. You can make changes to your policy, but you need to have the same policy number to get the biggest price drop in the 3rd year.. After 3 years it shouldn't be as big of a deal to change companies.
Take it for what it's worth I don't have my #'s yet but this is what I've learned while trying to sort out the rate issues on a new MC policy..
For the record, after adjusting my quote to what I've posted here , my new quote from Progressive is now 16k if paid in full or $18.5k/year via payments for a new MC#. Still expensive but nearly half the price I was originally quoted and more in line to what I was expecting.. (if I set the business up in a different state from FL it would be cheaper, FL & TX are 2 of the more expensive states just fyi)
Tip on insurance for new Authority
Discussion in 'Expediter and Hot Shot Trucking Forum' started by crocky, Apr 23, 2019.
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Personally I'm ok with paying a small amount more for them even if I can get it cheaper at a fly by night.. I've had to fight with insurance companies before and I've never had a issue with my private police with progressive. I was T boned in my pick up truck once and they didn't blink an eye to pay for stuff.Last edited: Apr 23, 2019
PE_T Thanks this. -
Interesting, I am a new business and my insurance as a car carrier is $11,700 a year.
Things to note when calling around for insurance... get quotes before your DOT #. Once they have your DOT # they will assume you will exceed the 300+ mile radius and interstate. Once you cross state lines - the rate gets jacked waaaaaay up. -
No state tax but they get you on everything else to make up for it.. I lived in MA before and honest to god it was cheaper to live there in so called Taxachusetts vs FL.. However I suspect a trucking company would be diffrent.
What state are you in btw? -
Another thing that makes a huge difference is when you call yourself a Hotshot, or expeditor. With most insurance companies, those two terms increase the quote substantially. When talking to a insurance company and they hear you refer to yourself as a Hotshot they think rush delivery and a lot of off road oilfield deliveries. When you call yourself a expeditor they think every load is a rush delivery. A new Independent Owner Operator doing rush, and off-road deliveries is more than likely going to have some claims in their first year.
If I’m talking to a insurance company I don’t use those terms, and if they do I tell them no, that doesn’t describe my business. I tell them I’m a over the road, LTL, and lightweight full load carry.
As far as not hauling vehicles for the first year. In my opinion, you’ll be making a big mistake. We move a lot freight only taking up only half or less of our trailer deck space. We use vehicles to fill that empty deck space often. If you get insurance that doesn’t cover a vehicle or two, You’re going to seriously hurt you income potential.crocky Thanks this. -
My problem with vehicles was they said it would then classify me as a car carrier and previously my quote was $30k if I told them I would do cars. Is there some break I can get if I say I will haul no more than 2 cars so it would fall under the basic $100k limit?
I honestly don't like not hauling cars in fact my intended freight was to be able to haul oversized vechiles but the insurance rate was too expensive once they classified me as a car carrier. -
That seems ridiculous to me but That's what they are claiming. -
They can claim what they want it is their business. Truth of the matter is they will be responsible for paying claims. Carrier moves a car with a dent or scratch reciever may have it repaired by filling a claim against the carrier. It is my understanding this happens more with individual owners than dealers. According to my car hauling friends. You need to document every vehicle you pick up. Take pictures anything to prevent a false claim or your insurance will go up.
flatbedcarrier Thanks this.
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