Is Your Commercial Vehicle Insured to Cover Its Current Value?
There are two ways an insurer values a commercial truck when it’s in an accident. The first is the truck’s stated value as listed in the policy. The second is the actual current cash value of the vehicle. Insurance carriers will pay the lesser of these two amounts. For owner-operators in trucking, this is business-critical information.
If the stated value in the policy hasn’t been updated to current market conditions, your truck may be underinsured. That means in case of a covered accident, you may have to cover part of the costs to repair or, in the case of a total loss, replace your truck out of pocket.
The infographic below illustrates some important trends and things to consider to ensure your commercial trucks are insured to their current value.
COMMERCIAL TRUCKING INSURANCE
Is Your Commercial Vehicle Covered to Its Current Value?
Class 8 Truck Values Continue to Fluctuate
The number of vehicles on the road has more than doubled over the past 20 years.*
- More Class 8 trucks on the nation’s roadways increases the likelihood of damages.
- Poor roadway infrastructure can affect wear and tear.
- Repair, replacement, technology and specialized labor costs can fluctuate.
An Underinsured Commercial Vehicle Could Cost You a Truckload.
- A total-loss accident could cause devastating blow to your bottom line.
- Your claim payment may be capped at either the stated value on your policy OR the actual cash value of your truck – whichever is less.
- If you haven’t updated your truck’s stated value in the last year, your claim payment may not cover the entire cost to replace your truck.
Stated Value on Your Policy: $52k
Current Replacement Cost: $110.5K
Your Potential Out-of-Pocket Cost: $58.5K
These examples are being provided for illustrative purposes only.
When should you review your fleet’s current value and reevaluate your level of coverage?
- Policy renewal
- New business gains
- New endorsements
- Registration renewal
- Tax season
- Recent claim settlements
- Regular check-ins with vehicle dealers
Contact your agent today.
*https://www.census.gov/programs-surveys/vius/data/tables.html
Northlandins.com
This material does not affect the provisions or coverages of any insurance policy issued by Northland, nor does it imply that coverage does or does not exist for any particular claim or loss under any such policy. Coverages depend on the facts and circumstances involved in the claim or loss, all applicable policy provisions, and any applicable law.
Availability of coverage referenced in this document can depend on underwriting qualifications and state regulations. Texas Customers: Effective 11/1/23, insurance is provided by Consumers County Mutual Insurance Company, and is administered by Northland Insurance Company.
Copyright 2024 The Travelers Indemnity Company. All rights reserved. BNLIN.0002 Rev.8-24
Keep your business insurance up to date. Contact your agent today.
