Bobtail Insurance vs Non-Trucking Liability Insurance (2022): An Overview
Do you own a trucking business or are you looking to start a motor carrier company in the New Year 2022? If you have set your sights on entering the trucking sector or you already run a trucking company, then make sure you read this article completely. In this insightful article, we will discuss bobtail insurance vs non-trucking liability insurance comprehensively and analyze the similarities and the differences between these two policies.
The trucking industry is an important foundation of US supply-chain management. According to JW Surety Bonds, trucks are responsible for transporting more than 70 percent of all goods in America. Hence, no further testament is required to justify the role that the trucking sector plays in the US economy.
However, this also means that the trucking sector has to deal with a heavy workload and work around the clock. In short, trucks are always exposed to catastrophic accidents and prone to suffering huge losses at all times. Therefore, you have to ensure that your trucks are covered at all times, even when they are not involved in any commercial activity.
As a trucking business owner, it is pivotal that you get policies like bobtail insurance and non-trucking liability insurance to protect your vehicle even when it is not operating commercially.
So, what is bobtail insurance? Why is non-trucking liability insurance imperative for every trucking business? Let’s delve deeper into understanding these coverage policies more comprehensively.
Did you know that the average cost of loss incurred as a result of an accident related to fleet vehicles like trucks is $70,000?
Understanding Bobtail Insurance and Non-Trucking Liability Insurance
Most trucking business owners and operators often seem to assume that bobtail insurance and non-trucking liability insurance are the same and are interchangeable. While these policies do have some similarities, there are some fundamental differences that you need to understand as a business owner.
Bobtail insurance is a liability policy that covers your truck when you are driving without a trailer, also known as bobtailing. A trucking vehicle is mostly involved in transporting cargo and has a trailer attached to it for commercial operations. However, there could be instances where you may have to drive your truck without having a trailer attached to it.
If you meet with an accident and cause damages to the other party while driving without a trailer, bobtail insurance can come in handy. Additionally, if you drive a trailer-less truck under someone else’s trucking authority, bobtail insurance is important as well.
Who Needs Bobtail Insurance?
Bobtail insurance is specifically designed to cover the circumstances where you need to drive your truck without a trailer. Hence, if you are a trucking business owner, whose trucks have to bobtail frequently, this policy is meant for you.
However, there is a crucial point that you need to understand before buying bobtail insurance. Bobtail insurance does not cover you if your truck is involved in any commercial activity like pulling a trailer or delivering cargo.
Another pivotal policy rule that you need to be clear about is that bobtail insurance is a liability-only policy. This means it will cover the liability costs if you cause any damage to the other party. However, this policy will not cover the physical damages of your own truck. The next section will cover the coverage options included in bobtail insurance in more detail.
For now, let’s look at some possible situations where bobtail insurance can come to your rescue.
- If you often drive without a trailer after dropping off a cargo at a point and move to a different location or return. If you meet with an accident in such a scenario, the bobtail insurance will cover the liability costs.
- In case you drive a trailer-less truck under someone else’s trucking authority.
- Lastly, if you have to travel to pick up your first load and you meet with an accident on the way there.
What Coverage Options are Included in Bobtail Insurance?
Moving on, let’s understand the coverages under bobtail insurance. As mentioned earlier, bobtail insurance is a liability-only policy that will not cover the physical damages to your truck.
However, third-party liability costs can also quickly end up in hefty bills. Therefore, a bobtail insurance policy will ensure that you are covered from such liable expenses.
These are the coverage options in a bobtail insurance policy:
- Third-party property damage
- Third-party bodily injury
- Medical fees of the third party
- Legal fees and expenses
An added benefit that comes with bobtail insurance is that, even if you are using the truck for personal reasons. Hence, this is another advantage of this policy.
How Much Does Bobtail Insurance Cost?
Bobtail insurance costs depend on a lot of factors like driving history, frequency of driving without a trailer, claims frequency and history, business history, the number of trucks you own. Etc.
On average, bobtail insurance costs around $20 to $30 per month. The rates can vary depending on the carriers as well. Therefore, make sure you compare enough quotes.
Non-Trucking Liability Insurance (NTLI)
Non-Trucking Liability Insurance (NTLI) is also a liability coverage policy that covers you when you are driving your truck for your personal reasons. As the name suggests, non-trucking liability insurance covers the liability expenses incurred if you meet with an accident while driving your truck for personal errands.
Non-trucking liabilities are not covered by normal commercial coverage policies as such policies only cover accidents during commercial operations.
A truck driver is mostly busy in commercial activities like transporting cargo and freight. However, some drivers also use their trucks for personal recreational activities. They use their trucks outside of business hours for personal purposes as well. Operations that do not involve a commercial line of work are covered by commercial trucking insurance.
However, accidents come unannounced and there is no guarantee that nothing unfortunate will happen while driving a truck for personal reasons. Depending on the damages caused to the third party you can be equally liable even if you are driving for your own work. The worst part is, unless you have non-trucking liability insurance, you will have to pay for the liability costs out of your own pockets.
Who Needs Non-Trucking Liability Insurance?
Although Non-Trucking Liability Insurance may seem like a simple coverage policy, it can protect you from hefty expenses. Driving a truck for personal reasons or during personal time does not mean that you are immune to accidents.
Being on the road exposes you to all kinds of risks whether you driving for commercial operations or personal work. Therefore, you have to ensure that you have liability coverage even when you are not doing any commercial work.
For instance, if you hit a car while driving your truck for recreational activities or personal reasons, you can still be held liable. You will have to pay for the damage caused to the other car, their medical expenses, and even legal costs. If you have non-trucking liability insurance, you can drive without any worries of liability expenses.
Here are some possible situations where non-trucking liability insurance is very important:
- If you drive your truck for personal reasons or outside of business hours frequently.
- If the motor carrier requires this insurance in a lease.
- To safeguard yourself from hefty liability costs during accidents outside business hours.
Similar to bobtail insurance, there’s an important policy rule that you must adhere to in non-trucking liability insurance as well. And that is, your truck cannot qualify for this coverage during business hours or accidents during commercial operations.
What are the Coverages in Non-Trucking Liability Insurance?
Being a liability policy, non-trucking liability insurance will not cover the physical damages to your truck. The purpose of this policy is to shield you from hefty liability expenses incurred during accidents. Therefore, you need to be clear beforehand regarding the rules of this insurance policy.
So, let’s quickly look at the coverage provided under non-trucking liability insurance.
- It covers the liability costs of the property damage of the third party.
- Third party vehicle damage liability costs.
- Bodily injury liability coverage of the third party.
- Defense Expenses
- Medical Expenses of the third party
Bobtail Insurance vs Non-trucking Liability Insurance: Understanding the Similarities
As you may have noticed after reading the policy terms and coverage options, bobtail insurance and non-trucking liability insurance look similar. However, although these policies have some similar terms, they differ from each other.
Talking about the similarities, both bobtail insurance, and non-trucking liability insurance covers accidents outside of business activities. In fact, both these insurance policies will not cover accidents for commercial purposes. Only accidents barred from commercial lines of work can qualify for these policies.
Another similarity between the two policies is, bobtail insurance and non-trucking liability insurance, both are liability-only policies. These policies only cover your liability expenses. You will be liable if you damage a third-party property, damage their vehicle, and cause injury to them.
Liability-only policies protect you from the expenses incurred during such unfortunate events. Additionally, it will also cover your legal and defense expenses. Consequently, this also means that such policies will not cover your own vehicle damages. You need to get auto coverage for that coverage.
However, this does not mean that you should undermine liability-only policies. Liability expenses often mount quickly and leave you with heavy losses.
Bobtail Insurance vs Non-Trucking Liability Insurance: How are they Different?
Although bobtail insurance and non-trucking liability insurance seem similar at first glance, they have some major differences. Let’s understand what separates these policies from each other.
The major difference between bobtail insurance and non-trucking liability insurance is the nature of their coverage. Bobtail insurance covers your truck whether you are driving during business hours or during personal hours as long as it does not have a trailer. Also, you have to be driving under someone else’s trucking authority.
On the other hand, non-trucking liability insurance only provides coverage for personal reasons. This policy will cover you even if you have a trailer but it should be empty. This policy restricts commercial activities.
Bobtail Insurance covers broader aspects than non-trucking liability insurance. Therefore, bobtail insurance is more expensive than Non-Trucking Liability Coverage.
Bobtail Insurance and Non-Trucking Liability Insurance: Why are they Important?
Bobtail insurance and non-trucking liability insurance are very important to ensure the ultimate safety of your trucks at all times. While commercial trucking insurance will cover the damages during business operations, it will not cover other losses.
For instance, if you have to drive your truck without a trailer or use your truck for personal work, you need a liability-only policy. Policies like bobtail insurance and non-trucking liability will come in handy in such situations.
Also, some trucking carriers will require you to have bobtail insurance and non-trucking liability insurance as a part of the agreement.
In short, such liabilities policies will fill the void found in some commercial trucking coverage. By getting such policies, you can ensure a safe trucking journey at all times.
So, you can purchase the right bobtail insurance or non-trucking liability insurance to reduce the risks of liability costs.
Bobtail Insurance vs Non-Trucking Liability Insurance: The Bottom-line
We believe that you were able to get important insights about bobtail insurance and non-trucking liability insurance from this article. Combining liability policies and commercial policies can cover your truck in all situations and circumstances.
Trucking is a lucrative business and there is no denying that it is one of the riskiest as well. Hence, as a truck operator or owner, you need to invest in reliable and required insurance policies. Trucking liability costs are not cheap.
So, it is better to stay take the prevention beforehand and invest in proper trucking insurance from companies like Renegade Insurance. Lastly, reach out to us to get more insights related to the trucking sector like the average cost of box truck insurance.
Frequently Asked Questions (FAQs)
Will bobtail insurance and non-trucking liability insurance cover damage to your vehicle?
No, policies like bobtail insurance and non-trucking liability insurance are liability-only policies. This means they will not cover damages to your truck. They will cover the damage caused to the third party.
Will bobtail insurance cover accidents during commercial operations?
No, bobtail insurance will not cover accidents during commercial hours. In fact, you must be driving without a trailer to qualify for bobtail insurance coverage.
What is a liability-only policy?
A liability-only policy is insurance coverage that only covers the damage caused to the third party. Such policies will cover the costs that you are liable for. However, your personal losses are not covered by such policies.
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