Underinsured Motorist Coverage in Trucking: What It Actually Covers

 

Occasionally a motor carrier reviews their trucking quote or policy and notices something missing. Underinsured motorist coverage. The first reaction is usually concern. If a truck is hit by someone with very low insurance limits, shouldn't the trucking policy step in?

A lot of car insurance policies carry the bare bones state minimum coverage ranging from $5,000 to $100,000. This range is not always enough to pay for damages to your equipment. In commercial trucking, underinsured motorist coverage works very differently than most people expect.

What Underinsured Motorist (UIM) Covers

Underinsured motorist coverage protects you when you are not at fault for an accident AND the at fault driver does not carry enough liability insurance to cover the injuries they caused. If another driver causes an accident and their policy limits are too low to cover the bodily injury damage, underinsured motorist coverage can help make up the difference.

In trucking, this would apply to injuries to the driver operating the truck, not damage to the equipment. The point is that underinsured motorist coverage is meant to address injuries to people, not damage to equipment. That distinction matters a lot in trucking.

UIM Usually Applies to Bodily Injury Only

When underinsured motorist coverage appears on a trucking policy, it is usually written for bodily injury only. (UMBI) That means it may help pay for injuries to the truck driver. What it normally does not cover is damage to the truck itself.

If you carry physical damage coverage on your equipment, underinsured motorist property damage coverage (UMPD) is typically excluded. This does vary widely depending on the state you’re based in and the insurance carrier you are insured with.

Damage to the Truck Goes Through Physical Damage Coverage

If a truck is damaged in an accident caused by an uninsured or underinsured driver, the repairs usually go through your physical damage coverage. This does help get you back on the road faster because you are not waiting for the other carrier to determine whatever it is they do, go back and forth with your carrier, etc.

In most cases the claim falls under the collision portion of the policy, which means the deductible still applies and this will show up on your loss runs. The insurance company will usually try to recover the money for damages or your deductible from the at fault driver later through subrogation.

This is one of the reasons physical damage deductibles matter so much in trucking. Even when another driver causes the accident, the truck owner may still be responsible for the deductible on the repair.

Why Many Trucking Insurers Do Not Offer UIM

Not every state requires insurers to offer underinsured motorist coverage on commercial auto policies. When the coverage is not required by law, you can bet many trucking insurers will choose not to include it in their commercial programs.

Commercial trucking policies are designed primarily to protect the public from liability caused by the truck. The required auto liability limits exist so there is coverage available if the truck causes injury or damage to others on the road.

Driver injury exposures are typically handled through other insurance programs such as workers compensation or occupational accident coverage. Because those coverages already exist to address driver injuries, many insurers do not build underinsured motorist coverage into their trucking policies unless the state requires it.

As a result, it is not unusual to see trucking policies renewed year after year without underinsured motorist coverage ever appearing on the policy.

Truck U Take

If you are reviewing your trucking policy and notice underinsured motorist coverage missing, it does not always mean something is wrong with the policy. In many cases the coverage is not offered in that state or the trucking insurer does not include it in their commercial program.

If you want a second set of eyes on your coverage, we are happy to review it with you and explain what is actually protecting the driver versus the equipment.

Call or text 254-294-7798 or email info@trucku.biz if you want us to review your trucking insurance program.

 

 

 

 

Disclosure

This post is for educational purposes only. It is not legal advice, insurance advice, or a substitute for calling your agent. Truck U is good, but we are not psychic. Policies vary, laws change, and courtrooms get weird. Do not make decisions based solely on something you read on the internet unless it is from us, in writing, with your name on it.

All opinions are our own and do not represent the views of any carrier, employer, or underwriting department that occasionally wishes we were quieter on LinkedIn.