Starting a trucking business is exciting—you've got your CDL, you've scoped out your first few contracts, and you're ready to hit the road. But here's what stops most people cold: insurance. Not just any insurance, but the specific federal filings, coverage types, and minimum limits you need before the FMCSA will even activate your operating authority. Without proper insurance in place, your trucks stay parked. This guide walks you through exactly what you need from day one, when to add coverage as you grow, and the costly mistakes new carriers make so you can avoid them.
Day One: What You Must Have Before You Start
The FMCSA won't activate your authority until your insurance company files proof of coverage. That means you need three things lined up before your first load: primary auto liability, cargo insurance, and physical damage coverage. Primary auto liability is the big one—it's federally mandated. For general freight, you need at least $750,000. Hauling hazardous materials? That jumps to $1 million or even $5 million depending on what you're carrying. Your insurer files Form BMC-91 with the FMCSA to prove you meet these minimums. No filing, no authority, no business.
Cargo insurance technically isn't required by federal law for all freight types, but good luck finding a broker or shipper who'll work with you without it. Most expect at least $100,000 in motor truck cargo coverage. This protects the goods you're hauling if they're damaged, lost, or stolen. If you're moving high-value electronics or perishables, clients may demand higher limits—sometimes $250,000 or more.
Physical damage coverage protects your truck and trailer. It's not federally required, but if you financed your rig, your lender will demand it. This includes collision coverage for accidents and comprehensive coverage for theft, vandalism, fire, and weather damage. Losing a $150,000 truck without this coverage could end your business before it starts.
You'll also need to file Form BOC-3, which designates process agents in every state. It's not insurance, but it's required within 90 days of your authority application being published. Without it, the FMCSA won't issue your operating documents. Most carriers use a BOC-3 service that charges $50 to $150 annually.
What It Actually Costs
Insurance is one of your biggest annual expenses. New carriers typically pay $15,000 to $25,000 per year for a single truck with comprehensive coverage. Why so much? You don't have an operating history. Insurers see you as high-risk, and some won't cover first-year owner-operators at all. Those that do charge a premium for it. Primary liability alone runs $4,000 to $12,000 annually depending on your operating radius, cargo type, and driver experience. Cargo insurance adds another $350 to $1,800. Physical damage varies wildly based on your truck's value—expect $2,000 to $8,000 for a financed rig.
These numbers jumped significantly in 2025. Physical damage coverage increased 18% over 2024, and umbrella liability rose 12%. Soaring claims costs, higher jury awards, and expanded liability definitions are driving premiums up across the industry. Budget conservatively and expect rates to climb as you renew.
When to Add Coverage as You Grow
Your insurance needs evolve as your business grows. Here's when to add or increase coverage. When you add your second truck, update your policy immediately. Don't wait until renewal. Easy oversights like forgetting to add a newly purchased vehicle leave you completely exposed. If that uninsured truck crashes, you're paying out of pocket. Same goes for hiring drivers—add them to your policy the day they start, not when you remember weeks later.
Consider increasing your liability limits beyond the federal minimum once you have steady revenue. A single serious crash can blow through $750,000 fast—medical bills, property damage, legal fees add up quickly. Many established carriers carry $1 million to $2 million in primary liability, then add umbrella coverage for another $5 million to $10 million. That sounds like overkill until you're facing a six-figure lawsuit.
If you start hauling different types of freight, adjust your cargo coverage. Moving from dry goods to refrigerated produce or electronics? You'll need higher cargo limits and possibly temperature-related coverage. If you only carry $100,000 in coverage but regularly haul loads worth $150,000, you're self-insuring that $50,000 gap. One claim and you're writing a massive check or losing a customer relationship.
Add general liability coverage when you expand beyond just driving. This covers injuries or property damage that happen off the road—someone slips at your office, or you damage a customer's loading dock. It's not required, but it protects your business assets from lawsuits unrelated to trucking operations.
Common Mistakes That Cost New Carriers
The biggest mistake? Thinking minimum coverage is enough. It's not. Federal minimums are just that—minimums. They're designed to get you legal, not to protect your business. A serious accident exhausts a $750,000 policy shockingly fast, and you're personally liable for everything beyond that. Your house, your savings, your future earnings—all at risk.
Second mistake: outdated schedules. You buy a new truck, hire a driver, expand your operating radius—but forget to notify your insurer. Your policy doesn't cover what it doesn't know about. Inaccurate schedules where drivers or vehicles aren't listed create massive coverage gaps. One carrier saved 15% on premiums just by correcting their stated operating radius to match reality. Make sure your policy reflects your actual operations, update it when things change, and review it at least quarterly.
Third mistake: ignoring technology discounts. Installing forward collision avoidance systems, dash cams, or electronic logging devices can reduce your premiums. One fleet owner cut 6% off his liability premium just by proving his trucks had collision avoidance installed. Most small carriers never ask about risk management discounts, and underwriters won't offer them unless you bring it up. Ask your insurer what safety technology qualifies for discounts, then install it and document it.
Fourth mistake: shopping on price alone. The cheapest policy is usually cheap for a reason—it covers less, has higher deductibles, or comes from a carrier with terrible claims service. When you need them most, they're impossible to reach or deny valid claims. Work with an agent who specializes in trucking insurance and understands your risks. They'll help you find the right coverage, not just the cheapest premium.
How to Get Started
Start your insurance search before you apply for your MC number. Get quotes from multiple insurers that specialize in new authorities. Traditional insurers often reject first-year carriers or charge astronomical rates, so work with an independent agent who has access to carriers willing to write new ventures. Provide accurate information about your trucks, drivers, operating radius, and cargo types. Lowballing your radius or misrepresenting your freight to save money now creates claim denials later.
Once you select a policy, your insurer files the BMC-91 with the FMCSA electronically. This typically takes 24 to 48 hours to process. File your BOC-3 during the same period. You won't get your authority documents until both are on file and processed. Plan for this timeline so you're not stuck waiting when you're ready to book loads.
As your business grows, review your coverage quarterly. Are you hauling higher-value loads? Operating in new states? Running more miles? Update your policy to match. Building a clean safety record over your first year helps tremendously when renewal time comes. Avoid accidents, moving violations, and DOT violations. After 12 to 24 months of clean operations, shop your coverage again—your rates should drop as you prove you're a low-risk carrier. Treat insurance as an investment in your business longevity, not just a regulatory checkbox, and you'll build a trucking company that lasts.
