First off it is important to understand that hotshot trucking is a vital component in commercial trucking.
The drivers are usually single vehicle owner-operators that work freelance for the freight industry. They transport smaller loads and usually operate in a smaller radius than the class 8 long haul drivers. Hotshot haulers transport items such as vehicles, boats, freight and other equipment to a single customer that doesn’t have the time or need for a big rig to haul the freight.
An interesting side note…the term hotshot came decades ago in the Texas oil fields where drilling operators needed equipment hauled to the different oil wells in a hurry.
The most common question we get at the agency is “What is the minimum amount of insurance I’m required to have to operate as a hotshot trucker?” Department of Transportation (DOT) states that the minimum amount of insurance is $750,000 combined single limit (CSL). However, most freight operators will require you to carry $1,000,000 CSL. Also, the DOT doesn’t require operators to carry cargo insurance, but in our experience, the majority of freight operators require hotshot truckers to carry a minimum of $100,000 in cargo coverage.
If you are required by your freight operator to carrier cargo insurance (which I highly recommend even if they don’t require) you must ask them the amount of coverage required needed. Most freight operators will require $100,000, but lower and higher coverage amounts are available. Much like liability insurance, cargo insurance costs vary depending on the different rating factors. We recently wrote a hauler with with two rigs and two refrigerated trailers with an unlimited radius for $2,345,. but this was a class 8 hauler with previous insurance and a great loss record. On the other hand, we wrote a new venture hotshot with no prior insurance with $100,000 of cargo coverage for $6,000. Again it’s important to work with an agency that has specialists that works in commercial auto and trucking insurance. They will have a larger network of insurance carriers that specialize in commercial trucking and cargo insurance.
Of course the biggest question comes down to cost.
There are hundreds of factors that determine an insurance premium. We’ve written clients as low as $1,200 per year for a liability only policy and as high as $5,000. It all depends on the radius of operation, vehicle year, and home state, just to name a very few.
Now that you have a better understanding of hotshot trucking and the coverage options available for hotshot insurance, we need to dive into the regulations placed by the Department of Transportation. Hotshot operators may be required to file different paperwork and carry different insurance coverages depending on the gross vehicle weight rating (GVWR). The GVWR will also affect the type of license required…meaning Commercial Driver License (CDL). It’s important when determining your GVWR you add the weight and capacity of the trailer minus the transfer weight. It’s alway a good idea to consult the DOT website to help determine GVWR.
|Class||License Type||Gross Vehicle Weight Rating (GVWR)||Example|
|Class 1||Class E – Non-commercial||0 – 6,000 lb||Dodge Dakota|
|Class 2||Class E – Non-commercial||6,001 – 10,000 lb||Ford F-150|
|Class 3||Class E – Non-commercial||10,001 -14,000 lb||GMC Sierra 3500|
|Class 4||Class E – Non-commercial||14,001 – 16,000 lb||Ford F-450|
|Class 5||Class E – Non-commercial||16,001 – 19,500 lb||Dodge Ram 5500|
|Class 6||Class E – Non-commercial||19,501 – 26,000 lb||Chevrolet Kodiak|
|Class 7||CDL Class A or B||26,001 – 33,000 lb||Dump Trucks|
|Class 8||CDL Class A||Exceeding 33,000 lb||Freightliners|
If your hotshot business is hauling 26,001 lbs or more, you must have a licensed CDL driver operating the vehicle. State’s across the nation are cracking down on hotshot operators hauling in excess of their license status.
I highly recommend anyone who is starting or already in business as a hotshot trucker to get their CDL. Not only to make sure you’re in compliance with the weight restrictions, but also to save you money on your hotshot insurance. Most hotshot insurance carriers will give up to a 10% discount for drivers with a CDL. Also many cargo carriers will give additional discounts for drivers with a CDL.
As always, I recommend you speak with an insurance agent that has extensive experience with hotshot insurance before purchasing an insurance policy. Hotshot trucking is a niche business and you need to work with an agent that understands your insurance needs and is able to help you get the right coverage at the most affordable rate.