When you are an owner-operator, the insurance bill comes out of the same pocket as the truck note, fuel and tires. A payment plan can make that bill easier to live with, but "payment plan" can mean a few different things. Here is how they work and how to tell them apart.
First: whose authority are you running under?
- Your own authority. You generally need primary liability and the federal filing in your own name. For a for-hire interstate carrier hauling nonhazardous property in a vehicle of 10,001 pounds GVWR or more, the federal minimum is $750,000 (49 CFR 387.9). Physical damage and cargo are often quoted too.
- Leased on to a carrier. The carrier may provide primary liability, and you may need coverage such as non-trucking liability, physical damage or occupational accident. Your lease spells out what is yours to buy, so read it and go over it with your agent.
The main ways to pay over time
| Option | Who you pay | What to check |
|---|---|---|
| Insurance company payment plan | The insurance company | Whether it is offered on your policy, the first payment, and any installment fees |
| Premium financing | A premium finance company, like NatPrem | The down payment, finance charge, APR and due dates, all shown on your agreement |
| Paying in full | The insurance company or your agent | Whether you still have enough cash for fuel and repairs |
| Credit card or line of credit | Your card issuer or lender | The interest, and how much of your available credit it ties up |
How premium financing works for an owner-operator
- Your agent quotes the coverage you need.
- You ask to finance the premium with NatPrem.
- You review and sign a premium finance agreement showing the amount financed, finance charge, APR, payment amounts and due dates.
- You make your down payment, and the agreement is reviewed. Not every policy can be financed.
- Once accepted, the premium goes to the insurance company, and you repay in monthly installments until the balance is paid.
The policy is the collateral. That means if you stop paying, the policy can be canceled. Read what happens if a trucking policy cancels so you know what is at stake.
Making the payments fit how you get paid
- Settlements and slow-paying loads. Your income may come in uneven amounts. Set money aside from every settlement instead of hoping the right check lands on the right day.
- Automatic payments. Payments can be set up to come out of your bank account on each due date, so make sure the account will be funded.
- Slow seasons. The installment does not stop when freight does. Budget for your lean months up front.
- Call before you are late. If a tough stretch is coming, call us first at (214) 586-3155.
When a payment plan may not be the right call
- You can comfortably pay in full. That avoids the finance charge.
- Your insurance company offers a plan with a lower total cost. Compare it first.
Questions to ask your agent
- What is the total I will pay over the term under each option?
- What happens if I add or remove a truck or trailer during the term?
- What happens if I switch from my own authority to a lease, or the other way around?
- What is the minimum earned premium? (More in why your down payment is so high.)
Talk to us
Have questions about financing your policy? Call (214) 586-3155 or contact us. Hablamos español.
NatPrem finances insurance premiums. We do not sell insurance. If you still need a trucking insurance quote, our sister agency, Protec Consulting Group, can help.