Other

Kosov Dmitry

YARS Logistics LLC

(Miami, Florida, USA)

https://www.doi.org/10.25313/2524-2695-2025-9-01-46

COMPARATIVE ANALYSIS OF COMMERCIAL TRUCK INSURANCE COSTS BY STATE FOR GENERAL FREIGHT OPERATORS

Summary. This paper presents a comparative analysis of commercial truck insurance premiums across state, including state laws, regional discrepancy, and cost reduction approaches, to facilitate understanding the nuances of commercial truck insurance and make more informed decisions.

Operating commercial trucks naturally involves significant risks, ranging from accidents to cargo damage and theft, so commercial truck insurance is a must for all carriers. Without adequate insurance coverage, one may jeopardize all the business operations and financial stability.

Moreover, commercial truck insurance is a legal obligation in most jurisdictions. Supervisory entities impose strict mandates on carriers to make sure they have sufficient insurance coverage to protect against liability from accidents or damages involving equipment and employees. Nonetheless, commercial truck insurance costs and requirements may vary from state to state.

Key words: commercial truck insurance, interstate freight, state risk index, vehicle miles traveled, insurance premiums, regulatory updates.

Introduction. Insurance represents one of the largest recurring expenses for commercial trucking companies in the United States. Premium rates are not uniform; they vary greatly by state and even county due to multiple factors including accident rates, highway density, traffic exposure, weather patterns, and liability environments. Understanding these variances is critical to financial planning and operational strategy of any carrier engaged in freight hauling either local or throughout the entire country and abroad. This paper compares average commercial truck insurance premiums across U.S. states, analyzing local (in-state) and national (interstate) rates.

State Laws and Regional Discrepancies affect insurance allocations.

Any new transportation company while planning its operational cost is willing to know how much the insurance expenses would be. Intrastate carriers are subjugated to their particular state minimum coverage. Interstate carriers shall comply with the FMCSA requirements which demand 300,000$ insurance coverage for non-hazardous freight moved only in vehicles weighing under 10,001 lbs, $750,000 – $5,000,000, depending on commodities transported by vehicles with GVW over 10,000 lbs and 5,000,000 for transporting hazardous materials. In other words there is no comprehensive universal rate.

Companies differ one from another not only by their size, safety score, credit score and numerous other parameters but by the place of their registration too. This seemingly insignificant fact is able to affect carrier’s insurance premium significantly.

For instence, in Mississippi, the median local insurance rate is $3,551, and the average national premium rate is $4,664, while a carrier in neighboring Alabama have to deal with an average local premium rate of $10,284 and an average national premium rate of $14,216. Insurance rates differ even depending on a country within a state.

Some states have riskier roads, flood zones, weather factors which practically means more strict insurance requirements and potentially higher rates. Since a higher population density translates into an increased traffic congestion which in turn increases the risk of accidents. Transportation companies registered in heavily populated areas typically face higher insurance expenses.

Producers, shippers, warehouses, transportation hubs etc. are not evenly spread over the country territory. So there is a number of areas and cities that experience more common hazardous materials movings. States with high density of industrial facilities are prone to the higher risk of sinister occurrences. Thus the elevated risk stemming from hazardous materials transporting largely leads to stiffer insurance policies and as a result to greater insurance outlays.

Here it’s important to underline the significance of the carrier’s credit score for obtaining a lower insurance rate. The logic behind this assertion is that an insurer believes the clients with higher score are more likely to pay their duties.

Any Insurance company proceeds from the fact that a carrier stores its equipment in a certain place. So the extent of protective measures, installations, structures and arrangements available at such place affect the final amount of the insurance premium. A truck parked in a garage has a lower risk of being damaged by severe weather conditions, stolen or hit by another vehicle then a truck parked in an open parking lot. A carrier paying attention to such things is more probably to be eligible for a competitive rate.

Comparative Data as to Discrepancies in Insurance Premiums by States.

The cost of commercial truck insurance in the 50 states ranges from a few thousand dollars to over twenty thousand dollars. The premiums can vary significantly based on local factors and risk assessments. Below is a ranking of all 50 states based on the average local premium rate.

• Alabama: The average local premium rate is $10,284 and the average national rate is $14,216.
• Alaska: The average local premium rate is $6,915 and the average national premium rate is $9,326.
• Arizona: The average local premium rate is $6,102 and the average national premium rate is $11,797.
• Arkansas: The average local premium rate is $10,973 and the average national premium rate is $14,922.
• California: The average local premium rate is $11,834 and the average national premium rate is $14,041.
• Colorado: The average local premium rate is $7,294 and the average national premium rate is $12,110.
• Connecticut: The average local premium rate is $16,946 and the average national premium rate is $17,004.
• Delaware: The average local premium rate is $17,351 and the average national rate is $19,670.
• Florida: The average local premium rate is $12,872 and the average national premium rate is $19,480.
• Georgia: The average local premium rate is $15,200 and the average national premium rate is $20,641.
• Hawaii: One can expect to pay $10,000 to $30,000 a year for commercial truck insurance on a semi-truck.
• Idaho: The average local premium rate is $6,887 and the average national premium rate is $9,008.
• Illinois: The average local premium rate is $7,704 and its average national premium rate is at $13,781.
• Indiana: The average local rate is $8,430 and the average national premium rate is $11,141.
• Iowa: The average local premium rate is $5,615 and the average national premium rate is $8,866.
• Kansas: The average local premium rate is $6,645 and the average national premium rate is at $10,160.
• Kentucky: The average local premium rate is $11,555 and the average national premium rate is $15,500.
• Louisiana: The average local premium rate is $19,736 and the average national premium rate is $20,255.
• Maine: The average local premium rate is $9,535 and the average national premium rate is $13,763.
• Maryland: The average local premium rate is $11,112 and the average national premium rate is $16,056.
• Massachusetts: The average local premium rate is $5,447 and the average national premium rate is $17,017
• Michigan: The average local premium rate is $8,910, and the average national premium rate is $13,793.
• Minnesota: The average local premium rate of $9,669 and the average national premium rate of $12,820.
• Mississippi: With a $3,552 average local premium commercial truck insurance rate, Mississippi is the cheapest state for commercial truck insurance. Its average national premium rate is $4,664.
• Missouri: The average local premium rate of $7,646 and the average national rate of $11,757.
• Montana: The average local premium rate is $6,501, and the average national premium rate is $9,492.
• Nebraska: The average local premium rate is $6,259, the average national premium rate is $8,664.
• Nevada: The average local premium rate is $10,681, while the average national premium is $16,912.
• New Hampshire: The average local premium rate is $6,817 and the average national premium rate is $11,390.
• New Jersey: The average local premium rate is $20,763, and the average national premium rate is $20,255.
• New Mexico: The average local premium rate is $7,298 and the average national premium rate is $9,738.
• New York: The average local premium rate is $16,949 and the national premium rate is $17,585.
• North Carolina: The average premium rate is $7,450 and the average national premium rate is $10,630.
• North Dakota: The average local premium rate is $6,456 and the national premium rate is $9,206.
• Ohio: The average local premium rate is $7,094 and the average national premium rate is $9,933.
• Oklahoma: The average local premium rate is $9,376 and the national premium rate is $13,383.
• Oregon: The average local insurance premium rate is $8,484 and the average national premium rate is $11,272.
• Pennsylvania: The average premium for local insurance is $7,536 and the national insurance premium rate is $12,470.
• Rhode Island: The average local premium rate is $14,046, and the average national premium rate is $17,220.
• South Carolina: The average premium for local insurance is $9,390 and the average national premium rate is $13,376.
• South Dakota: The average local insurance premium is $6,689 and the national premium rate is $9,013.
• Tennessee: The average local premium rate is $9,592 and the average national premium rate is $13,773.
• Texas: The average local premium rate is $10,533 and the average national premium rate is $14,497.
• Utah: The average local premium rate is $9,121 and the average national premium rate of $11,110.
• Vermont: The average local premium rate is $6,937 and the average national premium rate is $9,643.
• Virginia: The average local premium rate is $9,957 and the average national rate is $13,119.
• Washington: The average local insurance premium is $8,484 and the average national premium rate is $12,706.
• West Virginia: The average local premium rate is $11,687 and the average national premium rate is $14,638.
• Wisconsin: The average local premium rate is $6,714, and the average national premium is $9,231.
• Wyoming: The average local premium rate is $4,927 and the average national premium rate is $7,149.

It is worth to notice that the high-risk zone zip code of the carrier registration address leads to a higher insurance rate.

Cost Reduction Practices, Proactive Risk Mitigating and Safety enabling measures.

Adverse safety records inevitably affect insurance, as each recorded accident is expected to elevate the assessed risk category. Given that each accident can substantially upraise insurance premiums and increase the financial vulnerability of a carrier, therefor proactive risk-management strategies are essential. They enhance business sustainability and contribute to the cost reduction policy.

The stepping stone on this way for any carrier is a development of a comprehensive commercial truck driver safety program that consists of general safety training and specialized training specific for a given company. Properly trained drivers are not only able to practice defensive driving techniques, adhere to traffic laws, and follow proper cargo handling procedures, but they are also less likely to engage in risky behaviors that could cause accidents and subsequent insurance premium hikes.

Company’s fleet is yet another source of potential financial losses therefor development and implementation of a stringent and consistent protocol for every equipment unit. This means conducting regular inspections and making any necessary repairs in a timely manner. Not only is this vital for ensuring regulatory compliance, but it can also help reduce risk of experiencing mechanical failures on the road that might lead to accidents.

Advanced tracking and surveillance technologies allowing to gain real time insight into the operating order of the vehicle as well as driver behavior provide a user with the unique opportunity to identify areas for improvement and even get ahead of potential issues, take necessary actions in order to prevent a harmful incident.

Being tuned with the latest regulatory updates is a highly advised practice. By staying ahead of emerging risks and adapting policies and procedures accordingly, a carrier can proactively mitigate potential liabilities and ensure its business remains compliant.

References

1. DAT Freight & Analytics (Sep.24, 2024)” Navigating Commercial Truck Insurance Costs Across States”. www. dat.com
2. Insurance Filing Requirements | FMCSA. www.fmcsa.dot.gov
3. DAT Freight & Analytics. Guide to Commercial Truck Driver Safety Training – DAT. dat.com
4. Geotab (June 5, 2025) “Commercial Truck Insurance Cost: Rates by State + how to save”. www.geotab.com
5. K. Hymel (2013) “Financial Responsibility Requirements for Commercial Motor Vehicles”.(PDF). www.fmcsa.dot.gov
6. IAIS ( December 2024). Insurance Core Principles and Common Frameworks for the Supervision of Internationally Active Insurance Groups. (PDF) iais.org
7. A. Hoel, G. Giuliano, M.D.Meyer (2010) “Intermodal Transportation. Moving Freight in a Global Economy”. www.enotrans.org
8. NAIC (July 22, 2020). “Credit-Based Insurance Scores Aren’t the Same as a Credit Score. Understand How Credit and Other Factors Determine Your Premiums”. https://content.naic.org
9. H. Fisher, F.O. Kist. (June 10, 2001). American Academy of Actuaries Catastrophe Management Work Group. “Catastrophe Exposures and Insurance Industry Catastrophe Management Practices”. www.actuary.org
10. Global Risk Office LLC (August 26, 2024). “Commercial Trucking Insurance and Vehicle Maintenance -How Maintenance Impacts Coverage”. globalriskoffice.com
11. C.Camden, J.S. Hickman, R.J. Hanowski (March 3, 2015). NSTSCE, FMCSA. “Effective Use of Commercially Available Onboard Safety Monitoring Technologies: Guidance for Commercial Motor Vehicle Carriers”. www.fmcsa.dot.gov