Whether you run a logistics business that depends on trucks for its day-to-day operations or a product-based business that uses trucks for freight and cargo transportation, it’s inevitable that some of your business will occur across state lines.
While interstate commerce isn’t as complicated as international commerce, it does raise some interesting questions, particularly when it comes to insurance.
Will your vehicle be protected and insured while in another state? Will your staff still have full coverage for workers’ compensation? What about the contents of the truck and are they covered against damage or loss?
Luckily, managing your truck or commercial vehicle insurance across states is a fairly simple process, one that any business can easily stay on top of. In this guide, we’ll explain exactly how out-of-state truck insurance works and how you should approach it as a business.
Driving Commercial Vehicles Out of State
Just like with car insurance, most commercial truck insurance policies will provide full insurance coverage for your vehicles in every state. This means you can drive between states without any worries; your vehicle, and its driver will still be covered.
However, it’s still important to discuss usage habits and requirements with your truck insurance provider before choosing a policy. Your insurance broker or provider will be able to explain how driving in and out of your coverage state will affect your insurance.
There are several key factors that you should be aware of. The first is the minimum coverage level of your state, and how this can affect your insurance policy when your vehicle travels into another state.
Many states have different minimum coverage requirements. For example, the state of Virginia requires a minimum state coverage of $20,000 for property damage, whereas Kentucky has a lower minimum coverage amount of $10,000.
Most insurance policies will automatically adjust to meet the laws in every state, meaning your policy coverage may increase as you cross from one state to another. Of course, you’ll always maintain a specific minimum level of coverage, as dictated by your policy.
Still, this is one of several details that’s worth covering before you agree to any commercial or personal insurance policy. If your business requires frequent interstate driving, make sure you explain this to your insurance provider to clear up any details before reaching an agreement.
Insurance and Moving to a New State
Although it’s a rare circumstance for businesses, moving to a new state (and as such, changing your address permanently) can have implications for your insurance policy.
While most truck or car insurance policies will provide coverage in every state, the majority of insurers will require that your vehicle is insured in the state in which you live. This is also the case with state law as the majority of states require that you’re insured in your “home” state.
Again, this is a rare circumstance for businesses, which tend not to move from one state to another without good reason. However, if you own and use a truck or commercial vehicle for your small business, it’s important to be aware of the insurance implications of moving state.
Interstate Travel and Cargo Insurance
Do you need to move inventory from one state to another? Whether you’re moving products from the factory to your local store or from one warehouse to another, most businesses that market and sell products nationwide depend on interstate logistics providers.
Just like car and truck insurance, any insurance you purchase for your cargo should provide coverage for the entire journey. This includes any travel from one state to another. The vast majority of cargo insurance will even cover products as they cross international borders.
Still, it’s important to check these details before purchasing any insurance policy. Often, there may be elements of your cargo insurance policy that you aren’t aware of until reviewing all of the fine print with an expert at your side.
The Importance of Insurance
Whether you run a business that depends on third-party logistics providers or you operate your own fleet of commercial vehicles, insurance is an essential, non-optional aspect of running and growing your business successfully.
We offer a wide range of personal and commercial insurance policies, from truck insurance to cargo, workers’ compensation and more. For more information, please read about our policies online or contact us now for a detailed quote.