Expediter Owner Operator Insurance – the “other reason” you didn’t get that last load

by | Jun 20, 2019 | Articles, Understanding Expedite and Truck Insurance

Owner Operator, are you asking yourself “Why didn’t I get that load?”

You were in the right place at the right time…and you just bid lower than you would have liked in order to get yourself out of a deadhead situation.


Well 2019 has certainly brought us plenty of data on the overall softer truck market through articles in Overdrive, FreightWaves, ExpeditersOnline and WSJ Logistics Report. Take the time to open the links if you wish to learn more about capacity and other factors currently impacting all truckers.


But the Expediting niche of “Trucking For Hire” has an additional challenge which has plagued Motor Carriers and Owner Operators for years.

It’s the imbalance of insurance overhead.

How so?

The few Insurance Companies out there still writing Trucking For Hire policies generally differentiate Expediters as long haul up to unlimited radius vs. Couriers hauling locally within a 50 to 100 mile radius.

With the abundance of Last Mile Delivery opportunities, it seems like every year a new insurance company emerges with guidelines designed strictly for Couriers to capture that growing market.

A number of these new insurance roll outs were later pulled back and discontinued when it was discovered by Underwriters that the policies were purchased by Expediters representing as Couriers.

Some true Courier programs are holding the line and are well supported.


This year insurance agents have been presented with the following Underwriting Guidelines for a new Met Life Last Mile Delivery Courier 99 Mile Radius Policy:


Gross vehicle weight up to 20,000 lbs
All vehicles must have a valid 17-digit VIN
Operational radius must be 99 miles or less
Vehicles classified as “special types” are not eligible
Total fleet size cannot exceed nine
Vehicles must be owned by the named insured

For more details, here’s your link.



Anyone attending my workshops will remember my “home demolisher” client describing himself as a “bathroom re-modeler” back in the day…and how that turned out.  The same sea change holding clients accountable for willful misrepresentation is playing out now in the Courier/Expediter world.

It’s Risky Business:) to share unsupported Courier/Expediter claims here, but your own random checks through FMCSA Safer “Insurance History” on any Motor Carrier will produce the pattern of insurance companies who have come and gone due to client or agent misrepresentation of risk exposure.


Remember that every insurance policy contract says something like this:

“Misrepresentation and omissions of the material risk are violations of coverage.”

I encourage you to read your own insurance application and policy to see what you’ve signed in your contract as to how you are representing yourself to your insurance company.


Here’s a quick Courier vs Expediter rule of thumb:


  • If you are making deliveries of packages, papers, prescriptions or mail within a 99 mile radius, then you’re a Last Mile Delivery “Courier”.


  • Even if your unit is under 10,000 GVW, if you’re hauling freight beyond a 99 mile radius then you’re a “Trucking for Hire Expediter”.


Progressive has even tighter underwriting with 50 mile radius for Couriers.



So if you ARE an Expediter, what does this have to do with why YOU lost that last load?


You may have lost it to a “Courier” who pays less for his insurance than an “Expediter”.

There is simply an imbalance of overhead expense.

The lower insurance overhead enables the anxious parked “Courier” to bid lower and lower on loads, and that’s what’s been happening in our Expediting Community.



Why IS that Courier policy less expensive than an Expediter policy?

Well here’s what the Insurance Underwriter thinks:


1.  A Courier parks his unit at his home each night while the Expediter is essentially operating his unit 24/7 all over the country for days and weeks at a time.

2.  A Courier drives the same general familiar routes every day, while the Expediter drives a very different long route every day.

3.  A Courier has a time sensitive element, true, but the Expediter could be more inclined to push the limit on highways when traffic jams slow down a delivery schedule.

4.  While a Courier may tend to experience more fender benders, an Expediter may have more exposure to serious liability claims on high speed roads.


So if you are a long haul Expediter trying to compete what do you do?


At one time not so long ago, insurance overhead was pretty much equal for everyone, so there was a sense of stability in freight rates.  That started to change in 2009 when the “multi” model emerged, and some Owner Operators chose to haul for multiple Motor Carriers vs. one exclusive Motor Carrier.

These “multi” Owner Operators purchased their own individual Primary Commercial Auto Liability insurance in the amount of $1,000,000, listing the Motor Carrier they were hauling for as Additional Insured.

Then in order to compete for a limited pool of Owner Operators, Motor Carriers looked for ways to entice drivers with suggestions of lower overhead arrangements.


One way was to accept incorrect insurance policies with lower limits that included personal auto with state minimum, artisan contractor policies with 300 mile radius and $300,000 limits and Courier policies with 100 mile radius and $100,000 or $300,000 limits.

Competition ensued while freight rates began to spiral downwards as the uneven overhead playing field matured.



Several years ago attempts to rebalance the scales with universal correct insurance requirements through T.E.A.N.A.’s VOI, Verification of Insurance Certification program was shot down by assertions of antitrust.




Shouldn’t the insurance companies control this better?

From what I’ve seen insurance companies simply pull out of markets when they believe they cannot control the underwriting.  That’s why so many of them have come and gone in our niche.

When an insurance company starts to see similar claims arise with unsupported underwriting or coverage it’s usually the red flag that it’s not a “one off” situation.

That’s what we saw several months ago…a square peg – round hole insurance program for Motor Carriers that blew up due to unsupported claims.


It’s rather amazing but true, when insurance actuaries have correct risk data they can calculate policy premiums to the point of profitability for themselves without excess profits which could then kick them out of state rate submissions.  They are very good at this.

But if they don’t have the correct risk data, actuaries cannot correctly calculate anything and that’s why we see programs blow up.


What about the Insurance Agents?

It’s frustrating, but generally when insurance companies pull out of a market they simply pull away from the Agent who was representing the program.

You might see a few hands slapped for the inaccurate “unlimited radius” annotation on a Cert with the customary blame on the hapless Customer Service Rep.

But remember that an Acord cert is not only simply a snapshot in time but also includes the disclaimer that for all intents and purposes shields the Agent and leaves the contract duty on YOU.

(It’s easier to read a completely blank Acord Certificate of Liability Cert to see the disclaimers clearly.)


So are any of these shenanigans fair?  No, but you already knew that.

All Trucking for Hire has its fair share of gaming, it’s just easier to catch large units with SMS.


There will simply be fewer and fewer insurance companies writing Trucking For Hire and especially Expediting risks.  Then fewer and fewer drivers will be able to afford the limited insurance options, especially if they have poor credit.

A number of factors including capacity are affecting Expediting, and change is inevitable in any industry.   Steady and fair overhead in the past supported steady freight rates, but was of course not the only factor.


I’m encouraged that insurance companies are stepping up to the plate to support agents who field underwrite the correct coverage for the correct exposure.  Responsibility pays off, and drivers with good credit and good driving records still have reasonable insurance premiums in most states.

I’m also encouraged that Motor Carriers and Brokers have increased insurance vetting requirements for Expediters to include “Trucking for Hire”, “Primary and Non-Contributory $1,000,000 Liability” and “Unlimited Radius”.  This is a huge step from just a few years ago.

Supporting the opportunity for equal insurance overhead for everyone levels the scales for the Motor Carriers and Owner Operators who do care about operating safely and responsibly.  And there are many of you, MOST of you, who DO walk-the-line.  You are the professional drivers who deserve more recognition for your part in protecting the public.

Today we see a steady influx of Motor Carriers and Owner Operators who want to understand the necessity of carrying correct insurance coverage, and we see them sharing their knowledge with fellow drivers within our E.O. Expediting Community Forums and other social media.


We’re all aware there’s a glut of Last Mile Delivery and Ride Sharing job temptations.  There will always be a need for Couriers.  They provide a valuable service to all of us who use Amazon or need medical supplies quickly.  They also offer driving experience for young drivers and jobs that include home time at night for parents of little ones.

But I’m told time and again that in too many cases the income potential has not matched its promise to drivers.


Maybe we’ve reached a crossroads in our Expediting Community, but I continue to see Companies and Owner Operators help one another to encourage and develop professional drivers. These are the people who can adapt to the ebbs and flows of economic changes.

Because of this, through all the turmoil, I remain confident Expediters will maintain their professional status and reputations as the ELITE Trucking for Hire drivers of freight.

by Shelly Benisch, TRS, CIC  and Christina Cummings, TRS

Commercial Insurance Solutions, Inc. (CIS)



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