Texas truck insurance requirements, layer by layer

Four layers of requirements

Most truckers ask what they are required to carry. The honest answer is that four different groups set requirements, and each one asks for something different.

The government sets minimum auto liability and filings. Brokers and shippers set contract minimums before they tender a load.

Lenders and lessors protect their collateral. Then there is the coverage nobody forces on you that keeps one bad day from closing your business.

Layer 1: what the law requires

If you run only inside Texas and need a TxDMV number, the state sets your minimum. TxDMV requires $500,000 in auto liability for private or for-hire carriers operating vehicles over 26,000 lbs. Oil and petroleum hazmat that requires placards needs $1,000,000.

Certain hazmat, such as Division 1.1 through 1.3 explosives and bulk 2.1 or 2.2 gases, needs $5,000,000. Household goods movers under 26,000 lbs need $300,000 plus cargo coverage of $5,000 per vehicle and $10,000 aggregate.

If you haul for hire across state lines, FMCSA sets the floor under 49 CFR 387.9. Nonhazardous property in a vehicle of 10,001 lbs GVWR or more needs $750,000.

Oil and hazmat listed in 49 CFR 172.101 that fall outside the top class need $1,000,000. The most dangerous hazmat classes need $5,000,000.

Texas does not require cargo insurance for general freight carriers by law. Texas workers' compensation is optional for most private employers. Both of those gaps get filled by the next layers.

• Intrastate proof: your insurer files Form E with TxDMV.
• Interstate proof: your insurer files a BMC-91 or BMC-91X with FMCSA.
• Interstate for-hire carriers also need a BOC-3 and annual UCR registration.

Layer 2: what brokers and shippers require

This is where most new carriers find out the legal minimum is not enough to get loads. A broker in Dallas or Houston will usually ask for a certificate of insurance before the first load, and the most common contract minimums are $1,000,000 auto liability and $100,000 cargo.

Shippers moving high-value freight, such as electronics through Laredo or chemicals out of the Houston Ship Channel, may ask for higher cargo limits. Some contracts also ask for general liability, or for the broker or shipper to be named as a certificate holder or additional insured.

If you pull trailers you do not own, such as a shipper's drop trailers or an intermodal chassis out of Port Houston, the contract may require trailer interchange coverage. That pays for damage to a non-owned trailer in your care.

• Read the broker-carrier agreement before you bind coverage, not after.
• Check cargo exclusions against what you actually haul. A reefer load needs breakdown coverage if spoilage is excluded.
• Keep a current certificate ready to send the same day a broker asks.

Layer 3: what lenders and lessors require

If a bank or equipment lender financed your tractor, or you lease it, the lender will require physical damage coverage. That means collision coverage plus other-than-collision coverage for hail, fire, theft, and flood. The lender is listed as loss payee so a total-loss check pays off the loan first.

Loan and lease agreements often cap your deductible and set a stated value. Read those terms and match them. A lapse in physical damage can let the lender force-place coverage at a much higher cost.

Owner-operators leased onto a motor carrier have a different setup. The carrier usually covers auto liability while you run under its dispatch. You typically carry physical damage on your own unit and non-trucking liability for personal use, and the lease agreement spells out who covers what.

Layer 4: what protects the business when nobody requires it

The first three layers protect the public, your customers, and your lender. This layer protects you, because one uncovered claim can cost more than years of premium.

• Workers' compensation or occupational accident coverage. Texas lets most employers opt out of workers' comp, but non-subscribers lose common-law defenses if an injured employee sues.
• Higher liability limits or an umbrella. Jury verdicts in trucking cases can run well past a $1,000,000 limit.
• Reefer breakdown coverage for refrigerated loads, since standard cargo forms often exclude spoilage from mechanical failure.
• Rental reimbursement or loss-of-use coverage so a wrecked truck does not stop your income.
• Hired and non-owned auto for rental trucks and employees using personal vehicles on business.
• General liability for loading dock, yard, and premises claims that auto liability does not touch.
• Towing and labor coverage for breakdowns on long stretches like US-83 or I-10 west of San Antonio.

Requirements by operation type

Use this as a quick check. Your agent will confirm limits against your actual contracts.

Paperwork each layer will ask for

Each group that sets a requirement also wants proof, and missing paperwork is what usually stalls a load, a loan, or a renewal.

• TxDMV: an active Form E in TxMCCS and cab cards in each truck.
• FMCSA: an active BMC-91 or BMC-91X and BOC-3 on the L&I site.
• Brokers: a certificate of insurance showing auto liability and cargo limits, with the broker listed as certificate holder.
• Lenders: a policy showing physical damage with the lender named as loss payee.
• Your own file: loss runs and declarations pages from every insurer, which you will need at renewal.

How this guide differs from the DOT filing guide

This guide covers the full stack of coverage you need to run and get paid. If you only want the government minimum limits and which forms get filed where, read our guide to Texas DOT insurance requirements. Both feed into the same quote, so many truckers read both before calling an agent.