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Truck Insurance Glossary and Terms

Providing commercial truck insurance in TN, AL, MS, FL, TX, and many more.


​Primary Liability - this coverage provides protection against legal liability arising out of the ownership, maintenance, or use of any insured automobile. The insuring agreement agrees to pay damages for bodily injury or property damage for which the insured is legally responsible because of an automobile accident resulting from the ownership, maintenance, or use of covered auto.  This coverage is required by the Federal Highway Authority and we will make all required filings to them within 48 hours of binding coverage.

Physical Damage - This is coverage for your tractor and trailer.  It provides protection against loss or damage to your covered vehicle resulting from the impact with another vehicle or object.

Trailer Interchange - coverage for the liability of truckers for loss or damage to non-owned trailers and equipment which are in the insured's possession under a written trailer interchange agreement.

Cargo - This coverage protects the trucker in the event of loss or damage to freight they are hauling.

Non-Trucking Liability (Bobtail) - protects the public from bodily injury or property damage when an owner operator who is leased on to an authorized carrier is not under dispatch from that carrier.

Commercial General Liability - Coverage pertaining to claims arising out of the insured's liability for injuries or damages caused to ownership of property, manufacturing operations, contracting operations, sale or distribution of products and the operating of machines as well as professional services. Based on premises & operations liability with Trucker endorsement for portability of liability due to truckers unique exposures.

Workers Comp - Workers' compensation is a type of business insurance that provides employees who become injured or ill while on the job with medical coverage and income replacement. It also protects companies from being sued by employees for the workplace conditions that caused such an injury or illness.

Occupational Accident - Product designed specifically for owner operators in the trucking industry.  In most states, by being self-employed owner/operators can choose not to purchase workers compensation coverage. While not the same as workers compensation, occ/acc is very similar in scope and intent. For those who qualify, occ/acc is a lower cost alternative.

Contingent Liability - provides indemnity and defense to a truck broker for third-party liability claims. 

Contingent Cargo - provides indemnity and defense to a truck broker for third-party cargo claims. 

Deadhead - Sometimes also called "bobtail coverage." Although bobtail or deadhead coverage is often used interchangeably with non-trucking liability coverage, technically it is not the same thing. Bobtail insurance covers a tractor when it's operated without a trailer, whether or not it's under dispatch, while non-trucking liability coverage only covers a vehicle when it's driven for personal, nonbusiness use.


Dealer Plates - Dealer plates may be used on any registered motor vehicle, other than vehicles titled in the name of the dealer. A motor vehicle dealer license is required to obtain dealer plates. Dealer plates are displayed on motor vehicles while being operated by the dealer or a third party operating the vehicle with permission of the dealer. Dealer plates may not be used for delivery, hauling, transporting or any commercial purpose.


Declarations Page (Dec Page) - Also known as an auto insurance coverage summary, this page is provided by your insurance company and lists the following:

Types of coverage you have elected
Limit for each coverage
Cost for each coverage
Specified vehicles covered by the policy
Types of coverage for each vehicle covered by the policy, and
Other information applicable to the policy


Deductible - A deductible is the dollar amount you agree to pay out of pocket for damage resulting from a specific loss or accident. Deductibles always are selected when you purchase an insurance policy.


Diplomatic Driver's License - A diplomatic driver's license is issued to members of foreign consular posts and their family members in the United States. Diplomatic driver's licenses can only be issued by the Department of State through its diplomatic motor vehicle office.


Discount - A percentage reduction applied to a premium for fulfilling specific requirements or actions.


Doing Business As (DBA) name - A name by which a company is known to the public but which is not its legal name.

Domicile - The legal location (address, state) at which a business or person has established themselves (i.e. primary business or home address.)


Drive other car - See individual named insured endorsement


Electronic Funds Transfer (EFT) - EFT is a payment method in which funds are automatically deducted from a customer's checking account to pay bills on a regularly scheduled basis. Customers must select the EFT payment method and authorize payments in advance to use this system to pay their bills.


Employer's Non-Ownership Liability Coverages - Employer's non-ownership liability coverage provides liability insurance for a vehicle owned by your employee if it must be used to conduct your business. This coverage is for vehicles that are not regularly used for the business.


Endorsement - A clause added to an insurers policy wording which changes the coverage provided, and is considered to form part of the insurance contract.


Filing - A filing is like a certificate of insurance issued by an insurer that provides proof of specific insurance coverage. There are both federal filings and state filings.

Federal filings are submitted to the Federal Highway Administration. They often are required for interstate transportation of goods, people or hazardous materials.

State filings are submitted to a specific state's Department of Transportation or other governing body. They often are required for intrastate transportation of goods, people or hazardous materials.


Federal Highway Administration (FHWA) - The FHWA is a branch of the federal government that regulates interstate transportation of goods and people.


Fire and Theft with Combined Additional Coverages - For coverage to apply the damage or loss must be caused by one of the following: fire, lightning, explosion, theft, windstorms, hail, earthquakes, flood, rising waters, vandalism, a collision with an animal, or while being transported by a third party.


For-Hire Truckers - For-hire truckers are truck operators who transport goods for a fee.

Other Common Truck Terms:


Add On Interest: An interest charge added to a base interest charge.

Agricultural Authority: A special type of operating authority granted to owner operators by the ICC. It allows owner operators who haul produce to also haul regulated commodities on their backhaul provided that the number of hauls of regulated commodities does not exceed the number of hauls of exempt produce.

All-Risk Cargo Insurance: Does not mean any and every possible risk; only certain common risks. Generally not available to owner operators.

Amortization: The gradual payment of a debt or the writing off of intangible assets over a period of time as they expire.

Assets: Future economic benefits obtained as a result of past transactions.

Audit of freight bills: The process of verifying the transportation charges shown on the carrier's freight bill as reasonable.

Average gross revenue per loaded mile: Total payment received per mile traveled with a load.

Axle Weight: Weight carried by one axle.

Backhaul: A haul that returns you to home or base of operation.

Balance sheet: A financial statement listing all assets, liabilities and owner's equity at a certain date.

BBC: The distance from the truck's front bumper to the back of its cab.

Billed weight: The weight shown on a freight bill.

Bill of lading: Written transportation contract between shipper and carrier; it identifies who receives the freight and the place of delivery. It also gives terms of the agreement.

Bobtail: A tractor operating without a trailer.

Bobtail Insurance: Insurance covering accidents during non trucking use (i.e., not hauling a load; during maintenance service, etc.).

Bridge Formula: Federal regulation of how far apart the axles must be to legally carry a given weight.

Broker: A person who arranges loads for owner/operators.

Bulk Freight: Unpackaged freight, (for example, petroleum products).

Burden of proof: The obligation to prove disputed facts at issue in a legal proceeding.

Cargo Insurance: Insurance on the freight paid for by the carrier.

Carrier: A person, partnership or corporation engaged in the business of transporting goods.

Carrier's Lien: Carrier's claim on property it has transported as security for charges.

Cash Advance: Money received from carrier generally used for fuel and deducted from owner operator's final settlement check.

Cash flow: Ready cash (net income plus set aside cash, as for depreciation).

Cash Disbursement Journal: A journal for keeping track of money being paid out.

Cash Receipts Journal: A journal for keeping track of money coming into a business.

CDL: Commercial Driver's License: A license which authorizes an individual to operate commercial motor vehicles over 26,000 pounds gross vehicle weight.

Chargeable Accidents: An accident that a driver could have prevented whether or not it was his fault.

Charge backs: Those temporary costs assumed by the carrier for independent contractors. It is understood through the lease that these costs will be charged back to the independent contractor usually at settlement.

Clearing House: An organization set up to process and collect bills for participating trucking companies.

COE: Cab-Over-Engine: Truck/tractor design where the cab sits over the engine on the chassis.

Collateral: A pledge of security for borrowing money, usually a material possession.

Commodity: Any article of commerce, including raw material, manufactured or grown products.

Common Authority: Certificate from the ICC that allows the holder to haul regulated commodities in a for-hire trucking operation.

Common Carriers' Insurance: Insurance that covers transportation company's liability for loss of, or damage to, cargo or property being transported by them.

Consignee: The person or firm to whom articles are shipped.

Consignor: The person or firm who shipped the product.

Containerization: A shipping system based on large cargo carrying containers that can be easily interchanged between trucks.

Contract Carrier: Truckers who are providing dedicated service under contract to specific shippers using an ICC certificate.

Credit Life Insurance: A policy covering a buyer's life, until the truck is paid off, thus guarantees payment.

CVSA: Commercial Vehicle Safety Alliance: An organization of federal, state and provincial government agencies and representatives from private industry dedicated to improving commercial safety.

Deadheading: Operating a truck with no load.

Depreciation: A decrease in value (usually for tax purposes); a reduction or loss in exchange for value or purchasing power.

Detention (Demurrage): Detention of a vehicle beyond the time normally allowed for loading, unloading, etc.

Disability Insurance: Insurance policy that covers income if a truck driver is unable to work for a few weeks or more.

Discretionary Income: Amount of money left after expenses.

Dispatcher: A person who schedules and controls intercity traffic and intracity pickup and delivery.

D.O.T.: United States Department of Transportation.

Doubles: A tractor with two semi trailers connected in tandem by a converter dolly.

Drayage: Trucking goods from a warehouse to a rail yard or vice versa.

Drayage is the trucking component of intermodal transportation.

Escrow: Money held in trust by a third person with directions to use it for a specific purpose.

Exempt Carrier: Truckers hauling certain commodities that are exempt that may be transported in both interstate and intrastate commerce without operating authority ICC.

Exempt Commodity: Commodities that are moved interstate and intrastate by truck and not subject to regulation (i.e., any fresh fruit or vegetables except bananas).

Fixed Costs: Costs that have a long life, such as truck payment, mortgage, insurance, etc.

FOB: Free on Board: Usually indicates place where responsibility for expenses and risk for goods is passed from seller to buyer.

Forced Dispatch: Being forced to take a load whether the driver wants to or not.

Freight: Any commodity being transported.

Freight Bill: Document for a shipment with the description of the freight, weight, charges, rate for charges, taxes and whether it is a prepaid or collect shipment.

Freight Charge: Payment due for the transportation of the freight.

Fuel taxes: Taxes paid to each state a vehicle runs in based on miles driven in that state.

GCW: Gross Combination Weight: Total weight of tractor- trailer combinations, including trucks, trailers and payload.

GVW: Gross Vehicle Weight: Total weight of the loaded vehicle, including chassis, body and payload. Used to refer to the maximum GVW allowed by D.O.T. regulations.

Glider Kit: Truck that has been rebuilt, particularly component wise.

Health Insurance: Medical and Hospitalization insurance.

ICC: Interstate Commerce Commission: The federal body charged with enforcement of acts of Congress affecting interstate commerce.

IFTA: International Fuel Tax Agreement A system of centralized fuel tax payment allowing truckers to pay all state fuel taxes to a collection agency.

This agency disburses funds to each state or provincial agency based on the total miles you reported traveling in each state.

Independent Contractors: Independent contractors are owner operators who lease themselves and their vehicles to trucking companies regulated by the ICC.

Individual Variable Costs: Costs that are variable and peculiar to a specific trucking operation such as accounting fees, helper wages, personal road expenses, etc.

Intermodal: Transportation movement involving more than one mode, example, rail motor, motor air, or rail water.

Interstate: Between states.

Intrastate: Within a state.

Jackknife: Placing the tractor/trailer at a very sharp angle resulting from lock-up of tractor drive axle(s).

Lading: The freight in a truck.

Liability Insurance: Insurance that covers any third party injuries or damages.

Line Haul: The movement of freight between distant points. It does not include pickup and delivery service, or intracity delivery.

Loaded Mile: Distance traveled with paid freight in a trailer.

Logbook: Drivers book containing daily hours, routes, etc., required by DOT regulation.

LTL: Less Than Truckload: A quantity of freight that is less than required for the application of a truckload rate.

Lumpers: Helpers hired to load/unload freight.

Manifest: A document describing a shipment or the contents of a vehicle.

MCSAP: The Motor Carrier Safety Assistance Program: Federal Government program distributing monies to help states conduct effective truck inspection and safety efforts.

MCS-90: A document that shows proof of adequate insurance.

NTSB: The National Transportation Safety Board: A Federal Government organization charged with investigating accidents in every sector of transportation, suggesting ways of improving transportation safety through effective regulatory requirements, and reporting on its findings and conclusions to Congress.

OTR: Over the road drivers.

Owner Operator: A person who owns one or more trucks and personally drives at least one of them. Also known as a small fleet owner operator if more than one vehicle is owned.

Payload: Total weight of the commodity carried on a truck including packaging, banding, etc.

Permanent Lease: A lease for at least 30 days where an owner operator leases himself and his equipment to a regulated carrier.

Permits: Permission granted to carriers by states to transport freight exceeding legal weight and size limits.

PIP: Personal Injury Protection: An insurance policy that provides personal injury protection.

PMs: Preventive maintenance inspection.

Pre Trip Inspection: A walk around inspection of a truck that every driver is required to perform prior to every trip in a commercial vehicle. This involves following a complete check list related to the particular type of vehicle being inspected. The pre-trip inspection is considered by experts to be one of the most neglected, potentially effective means of improving truck safety.

Principal: Actual amount of money borrowed; the amount that interest will be applied to a loan.

Private Carrier: A company that has its own trucks to transport its own freight.

Pro Rate: To distribute proportionately.

Rate: The charge for transporting freight.

Recourse Agreement: An agreement between buyer and seller whereby if a buyer defaults on payments and the truck is repossessed, the selling dealer must buy the truck from the lender for the unpaid balance. The dealer can sue the former owner for the balance if it is more than the truck is worth.

Regulated commodities: Commodities that are transported under governmental regulation.

Regulated Common carrier: Carriers that transport general commodities that are regulated by the ICC.

Rider Policy: An insurance policy provision that provides coverage to a passenger in a commercial vehicle.

Road Use Taxes: Annual federal tax applied to each vehicle.

Scale (Weigh) Station: A place where trucks are weighed to ensure that GVW and axle weights are below permissible levels.

Settlement: A net amount paid for hauling a load.

Surcharge: A charge above the usual or customary charge.

Surtax: An additional or extra tax.

Tandem: An assembly of two axles, either of which may be powered.

Tariff: A published rate for hauling goods.

TL: Truckload: A full or nearly full trailer of goods. Usually the shipment is made without stopover to load/unload.

Transportation Insurance: This insurance covers loss to shippers because of an accident to goods in transit.

Trip Recorder: On- Board Computer - Cab mounted device which records data such as speed, engine rpm, idle time and any other information that may be useful to trucking management.

U.S. DOT Number: Vehicle Registration Number. U.S Dot numbers are supplied without charge, and are required for all vehicles exceeding 10,000 lbs. GVW or GCW.

Variable costs: Equipment operating expenses which vary from trip to trip; for example, fuel, repairs, tires.

Workers' Compensation: Compensation for work related injuries not covered by hospitalization.

Commercial truck insurance rates are going up.  Most trucking companies are seeing their rates go up 20-30%. Commercial truck insurance rates with Thomas Wilson Group, LLC. are always competitive.  We want to make sure your insurance is within your budget and you can have the peace of mind of having you and your truck properly covered.  


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