50 essential terms every motor carrier should know. Filter by letter or search for a specific term.
Independent credit-rating agency assessment of an insurer's financial strength. A++ (Superior) is the highest; B and below indicate financial weakness. Considered the standard reference for insurance buyer due diligence.
A party (such as a broker, shipper, or equipment lessor) added to your insurance policy to receive coverage for liability arising from your operations. Commonly required by freight brokers via certificate of insurance.
An insurance company licensed by the state to write business there. Admitted carriers must file rates with the state DOI and policyholders are protected by the state guaranty fund if the insurer becomes insolvent.
The maximum total amount an insurer will pay across all claims during a single policy period. Aggregate limits commonly apply to General Liability and Cargo coverages.
Adjustment to your premium based on a year-end audit of actual payroll, mileage, or revenue exposures. Common on workers comp and general liability policies.
Behavior Analysis and Safety Improvement Categories under FMCSA's CSA program. Seven categories: Unsafe Driving, Hours-of-Service Compliance, Driver Fitness, Controlled Substances/Alcohol, Vehicle Maintenance, Hazardous Materials Compliance, and Crash Indicator.
FMCSA endorsement adding cargo liability filing to a motor carrier policy. Required for household goods carriers.
Surety bond (BMC-84) and trust fund (BMC-85) forms used by freight brokers to satisfy the FMCSA $75,000 financial responsibility requirement.
Form filed with FMCSA to prove a motor carrier maintains the required public liability (auto and cargo) insurance coverage.
Designation of Process Agent. Required FMCSA filing identifying agents in each state authorized to receive legal documents on the carrier's behalf.
Document evidencing that insurance coverage is in force. Frequently requested by freight brokers and shippers as proof of coverage.
Loss ratio plus expense ratio. Below 100% indicates the insurer is operating at an underwriting profit; above 100% indicates a loss.
Compliance, Safety, Accountability score maintained by FMCSA. Carriers' BASIC scores directly influence both underwriting decisions and pricing.
The amount the insured pays out of pocket on each claim before the insurance company's coverage applies.
FMCSA compliance review of a motor carrier's records. Often triggered by elevated CSA scores, complaints, or post-crash investigation.
Federally mandated equipment that records hours of service and basic vehicle operating data, replacing paper logbooks for most CMV drivers.
Written amendment to an insurance policy that adds, removes, or modifies coverage.
Non-admitted insurance markets that write risks standard admitted carriers decline. Forms are not regulated by state DOI rate filings.
Coverage that sits above primary auto liability limits, providing additional protection for catastrophic claims that exceed the underlying policy.
Structure where a rated admitted insurer issues policies and reinsures most of the risk to another carrier, MGA-affiliated entity, or capital provider.
Coverage for bodily injury or property damage that arises from your business operations away from the truck — premises liability, completed operations, product liability.
Gross Vehicle Weight (current) / Gross Vehicle Weight Rating (legal max). The legally permitted maximum loaded weight of a truck.
Heavy Vehicle Use Tax. Annual federal excise tax on trucks 55,000 lbs GVW or more. Filed via IRS Form 2290 with a deadline of August 31 each year.
International Fuel Tax Agreement. Quarterly fuel tax reporting program covering 48 contiguous U.S. states and 10 Canadian provinces, simplifying multi-jurisdictional fuel tax filings.
Apportioned vehicle registration program for interstate operators. Registration fees are distributed across jurisdictions based on miles traveled.
Ratio of paid claims to earned premiums. A loss ratio above 70% generally produces underwriting losses for the insurer once expenses are added.
Motor Carrier authority number issued by FMCSA, granting interstate operating authority for hire (Common, Contract, Broker, or Household Goods).
Endorsement attached to motor carrier liability policies certifying compliance with FMCSA financial responsibility minimums ($750,000 for general freight; higher for hazmat).
An entity granted underwriting authority by an insurer to bind business on its behalf, often within a defined program or geography.
Insurance covering the freight you haul for others while in your care, custody, and control — typically the value of the load minus a deductible.
The person or business listed on the policy declaration page as the primary insured party. Has full rights and duties under the policy.
FMCSA designation for motor carriers in their first 18 months of operation. Subject to a safety audit during that window.
Insurer not licensed in a state but allowed to write certain E&S risks via a surplus lines broker. Not protected by state guaranty fund.
Also called bobtail liability. Covers an owner-operator when driving the truck without a load and not under dispatch (e.g., commuting home).
FMCSA-granted permission to operate as a for-hire interstate motor carrier. Issued in four types: Common, Contract, Broker, and Household Goods.
A trucker who owns their truck and operates either under their own MC authority or by leasing on to a motor carrier.
Contract between an owner-operator and motor carrier defining responsibilities, including who provides which insurance coverages.
Maximum amount the policy will pay for a single claim or accident.
Coverage for damage to your own truck and trailer — collision, comprehensive (theft, fire, vandalism, weather), and specified perils.
Time frame during which the policy is in force. Usually 12 months for commercial trucking policies.
Amount the insured pays the insurer in exchange for coverage during the policy period.
Coverage that pays for bodily injury and property damage caused to third parties by your truck. Federally mandated for interstate motor carriers via the MCS-90 endorsement.
Insurance entity owned by its members and organized to provide liability coverage to a specific industry. Several trucking-focused RRGs exist.
Similar to a deductible but the insured handles claims and defense within the SIR amount before the insurer's involvement.
Insurer's contractual right to pursue recovery from a third party who caused a loss the insurer paid on behalf of its insured.
Vehicle-mounted technology — ELDs, dash cams, GPS — that captures driving behavior data used in insurance underwriting and pricing (e.g., Progressive Smart Haul).
Coverage for damage to a non-owned trailer being pulled under a written interchange agreement with another carrier.
Annual federal-state registration program based on fleet size. Required for interstate motor carriers with deadline of December 31.
Unique identifier issued by FMCSA to each motor carrier operating commercially in interstate commerce. Required for trucks 10,001+ lbs.
State-regulated insurance covering medical costs and lost wages for employees injured on the job. Required in nearly every state for businesses with employees.
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