If you're starting a trucking business in Texas or already operating one, you've probably realized that insurance isn't just recommended—it's legally required. But here's what catches most people off guard: the amount you need depends on whether you're crossing state lines, what you're hauling, and how heavy your trucks are. Get it wrong, and you could face fines, lose your operating authority, or worse, be personally liable for a multi-million dollar accident.
This guide breaks down exactly what Texas requires for trucking and transportation businesses, from the basic liability minimums to workers' comp rules and licensing requirements. We'll cover both state-specific Texas regulations and federal FMCSA requirements so you know precisely what coverage you need to stay compliant and protected.
Understanding Texas vs. Federal Insurance Requirements
The first thing you need to understand is whether you're running intrastate or interstate operations, because it completely changes which insurance requirements apply to you. Intrastate means you're only hauling loads within Texas—Houston to Dallas, Austin to San Antonio, El Paso to Amarillo. Interstate means you cross state lines, even once.
For intrastate operations, Texas law requires a minimum of $500,000 in combined single limit liability coverage under the Texas Administrative Code. That's your baseline if you're hauling general freight only within Texas. However, if you're transporting household goods with trucks under 26,000 pounds, the minimum drops to $300,000. Once your household goods trucks exceed 26,000 pounds, you're back to needing $500,000.
Interstate carriers face federal requirements set by the Federal Motor Carrier Safety Administration. For trucks over 10,001 pounds carrying non-hazardous materials, you need $750,000 in liability coverage. Hauling oil or operating hopper-type vehicles? That jumps to $1 million. And if you're transporting hazardous materials requiring placarding, you need $5 million in coverage. Yes, five million.
Licensing and Registration Requirements
Before you can even get insurance, you need the right operating authority. For intrastate operations in Texas, you must register with the Texas Department of Motor Vehicles and obtain a TxDMV number. This applies if you operate commercial vehicles over 26,000 pounds gross weight, transport hazardous materials requiring placards, or operate vehicles designed to carry more than 15 passengers including the driver.
The registration process requires you to first obtain insurance, then provide your insurance company with your Unique Identifier Number so they can file proof of insurance electronically with TxDMV. You must keep a current insurance cab card in every commercial vehicle at all times—law enforcement can request to see it during any traffic stop or inspection.
For interstate operations, you need a USDOT number from the Federal Motor Carrier Safety Administration, which applies to all vehicles over 10,001 pounds. If you're hauling loads across state lines for hire, you also need MC authority, which costs $300 and takes three to four weeks to process. Processing times for TxDMV intrastate authority are faster, typically three to ten days.
Workers' Compensation: Optional but Risky to Skip
Here's where Texas is different from almost every other state: workers' compensation insurance is not required for most private employers. Texas and South Dakota are the only states with this distinction. However, before you decide to skip it and save money, understand what you're giving up.
When you carry workers' comp, you have legal protection from most lawsuits. An injured driver can't sue you for workplace injuries—the insurance handles their medical bills and lost wages. But if you choose not to carry coverage, you become what's called a 'non-subscriber,' and injured employees can sue you directly for negligence. That means unlimited liability exposure if one of your drivers gets hurt on the job.
As of 2025, the average workers' compensation rate for truckers is about $6.33 per $100 of payroll, which works out to roughly $296 per month for a single driver. That's a relatively small price to pay for protection against a lawsuit that could bankrupt your business. Additionally, if you bid on any government contracts—including Texas Department of Transportation projects—you must carry workers' comp as a contract requirement.
If you do choose to operate as a non-subscriber, you have filing requirements. You must submit Form DWC-005 to the Texas Department of Insurance Division of Workers' Compensation annually between February 1 and April 30, declaring your non-subscriber status. You're also required to post notices informing employees that you don't carry coverage.
Cargo Coverage and Additional Protection
Liability insurance protects you when your truck damages someone else's property or causes bodily injury. But what about the freight you're hauling? That's where cargo insurance comes in. While not always legally required, it's often mandated by your customers or the companies you contract with.
For trucking companies transporting household goods, Texas law does require specific cargo coverage: at least $5,000 to cover loss or damage to a single shipper's cargo, and a minimum of $10,000 for loss or damage to multiple shipper cargo. This protects your customers' belongings during moves and ensures you can compensate them if something gets damaged or lost in transit.
Beyond the legal minimums, most successful trucking companies carry higher limits because shippers and brokers often require it in their contracts. If you want to haul high-value electronics, machinery, or other expensive freight, you may need $100,000 or more in cargo coverage to even bid on those loads.
What's Changing in 2026
If you work with freight brokers or operate as a freight forwarder yourself, pay attention: effective January 16, 2026, new federal rules regarding financial responsibility take effect. While the specifics are still being clarified by the FMCSA, these rules will impact how brokers and forwarders demonstrate financial responsibility and may affect the insurance documentation required when booking loads.
Additionally, all motor carriers registered with TxDMV must certify compliance with federal drug testing requirements, including registration with the FMCSA Drug and Alcohol Clearinghouse. This has been strictly enforced in recent years, and violations can result in suspended operating authority.
Getting Started: Your Action Plan
Start by determining whether you're operating intrastate or interstate—that single decision drives everything else. Then figure out what you're hauling and how much your trucks weigh. Use those answers to determine your minimum liability coverage requirements. Don't just buy the minimum, though. Most insurance professionals recommend carrying higher limits because the difference in premium is often small compared to the additional protection.
Before registering your business, establish your legal entity with the Texas Secretary of State. Then work with a commercial insurance agent who specializes in trucking to get your liability policy in place. Once you have your insurance binder, you can apply for your TxDMV number or USDOT number as appropriate. Make sure your insurance company files the proof of insurance electronically—you can't operate legally without that on file.
Finally, make an informed decision about workers' compensation. If you have employees or plan to hire drivers, seriously consider carrying coverage even though it's optional. The lawsuit protection alone is often worth the investment, and you'll need it anyway if you pursue government contracts. Running a trucking business in Texas has enough challenges without adding unlimited lawsuit liability to the mix.
