Here’s the Deal
Auto liability insurance is the big one. If you’re running a commercial motor vehicle for hire, the federal government says you must carry it. Period. No auto liability, no authority. No authority, no loads.
This coverage pays for damage you cause to other people — their vehicles, their medical bills, their property. It does not cover your truck. It does not cover your cargo. It covers the other guy when an accident is your fault.
If you remember nothing else from this page, remember this: the federal minimum has not been updated since 1985, and it is not enough to protect you in a serious accident.
What the Federal Minimum Actually Looks Like
The FMCSA sets minimum insurance requirements based on what you haul:
- General freight (non-hazmat): $750,000 Combined Single Limit
- Hazardous materials: $1,000,000 CSL (some classes require $5,000,000)
- Passenger carriers: $5,000,000 CSL
“Combined Single Limit” means one pool of money covers everything — bodily injury and property damage combined. This is different from “split limits,” where you might see something like 100/300/100 (that’s $100K per person, $300K per accident for bodily injury, $100K for property damage). CSL is simpler and generally better for trucking because a single catastrophic injury can blow through a per-person limit fast.
Why $750K Is Not Enough
Let me put this bluntly. The $750,000 minimum was set in 1985. Adjusted for inflation, that would be roughly $2.1 million today. But Congress has not updated it.
Meanwhile, medical costs have skyrocketed. A single traumatic brain injury case can generate $5 million to $10 million in lifetime medical expenses. A fatal accident involving a family? You are looking at multi-million dollar settlements as a starting point.
This is why almost every broker and shipper requires $1,000,000 in auto liability as a minimum to haul their freight. Many require more. The federal minimum gets you legal authority, but it will not get you loads.
Nuclear Verdicts — What They Are and Why They Matter
A nuclear verdict is a jury award that exceeds $10 million. In trucking, these have become disturbingly common over the past decade.
Here is how it works. A plaintiff attorney takes your accident case to trial. They show the jury that your carrier cut corners on safety, that the driver was fatigued, that the company prioritized profits over people. Whether or not that is fully true, it makes a compelling story. The jury gets angry. They award $20 million, $30 million, sometimes over $100 million.
These are not hypothetical. In 2021, a Florida jury awarded $1 billion in a trucking accident case — still the largest on record. That is billion with a B. More recently, in 2024, an Alabama state jury rendered a $160 million verdict against Daimler Truck North America in a product liability case. Even when these get reduced on appeal, the legal costs alone can bankrupt a small carrier.
Texas leads the nation with $3 billion in nuclear verdict judgments in 2024 alone. Florida enacted tort reforms in 2023 that have moderated the trend somewhat, but verdicts remain high. If you run lanes through these states, your premiums will reflect that risk.
What Happens When Your Limits Are Not Enough
Say you carry the $750K minimum and cause an accident that results in $2 million in damages. Your insurance pays $750,000. You owe the remaining $1,250,000.
The plaintiff attorney will come after everything — your truck, your business assets, your personal assets if your business structure does not protect them. A judgment like that can follow you for years.
This is why many experienced owner-operators and carriers carry $1 million to $2 million in auto liability even when it is not required by their broker agreements. The premium difference between $750K and $1M is often surprisingly small compared to the protection you get.
How Claims Work
When you are in an accident:
- Report immediately. Call your insurance company as soon as possible. Waiting makes everything worse.
- Document everything. Photos of the scene, the other vehicles, road conditions, weather. Get the police report number.
- Do not admit fault. Be cooperative with law enforcement, but do not tell the other driver “I’m sorry, it was my fault.” That statement will appear in the lawsuit.
- Your insurer assigns an adjuster. They investigate the claim, negotiate with the other party, and handle the legal defense if it goes to court.
- Settlement or trial. Most claims settle. The ones that go to trial are where nuclear verdicts happen.
Your insurance company has a duty to defend you up to your policy limits. If a claim looks like it will exceed your limits, that is when you need to talk to your own attorney — not the one your insurance company provides.
What Affects Your Premium
Insurance companies look at several factors when pricing your auto liability:
Driving record. This is the biggest one. Clean CSA scores, no accidents, no violations — you pay less. A history of incidents and you will pay significantly more, if you can get coverage at all.
Operating radius. Running local routes under 200 miles is cheaper to insure than long-haul runs across multiple states. More miles means more exposure.
Cargo type. Hauling general dry freight is the baseline. Hazmat, oversized, or high-value loads increase your premium because the potential damage in an accident is greater.
Years in business. New authorities (under 3 years) pay the most. Insurance companies see new carriers as higher risk because they have no track record. Once you get past 2-3 years with a clean history, rates typically improve.
Equipment age and condition. Newer trucks with modern safety features (collision avoidance, lane departure, electronic stability control) can reduce your premium. Older equipment with no safety tech costs more.
Location and lanes. Running through Texas, Florida, Georgia, and California means higher premiums. These states have higher accident rates, more litigation, or both.
Deductible. Higher deductible means lower premium, but you pay more out of pocket when a claim happens. Most auto liability policies have no deductible for the liability portion — the deductible typically applies to physical damage.
The Bottom Line
Auto liability is not optional and it is not something to cheap out on. The federal minimum of $750,000 is a floor, not a ceiling. Most carriers should carry at least $1 million, and if you run through high-litigation states or haul hazmat, consider more.
Get quotes from multiple insurers. Work with an agent who specializes in trucking — a generalist who mostly writes auto policies for sedans does not understand the risks you face. And review your limits every year, because the legal environment for trucking is getting more expensive, not less.
Your auto liability policy is the foundation everything else sits on. Get this one right.