Question
I'm in the process of trying to start a specialized owner/operator OTR delivery business, delivering pinball machines and other gameroom equipment for collectors. I would be using a Chevy passenger van/cargo trailer combination, not a tractor/trailer combo or box truck.
I posted a message about this in the newbies forum yesterday and have learned a lot from the responses regarding what I will need to do with regard to DOT regulations and so forth. Because my CGVWR will only be about 13,000 pounds, I won't need a CDL. I will need to follow most of the other DOT regulations though: log book, inspections, physicals, etc.
The one thing I'm still puzzled about is insurance. It appears according to the DOT regulations that I will need to carry $750,000 in liability coverage, and $5,000 or $10,000 in cargo insurance. The posts I've read here seem rather discouraging - "can't buy insurance at any price", etc. Is this true for a situation like mine, or is it easier/less expensive to purchase insurance for commercial vehicles under the 26,000 pound CDL requirement than it would be for semis?
Physically, the vehicle I'll be driving is no different than any passenger van/trailer combination that virtually any licensed driver could buy and insure as a personal use vehicle. (In fact I already own the vehicle, and that's how it's insured and registered now, since I haven't began using it commercially yet.) Is the fact that I'll be using it for hire really going change my insurance needs from the $500 or so a year I'm paying now to "can't buy insurance at any price"?
Thanks in advance.
(I have this unfortunate suspicion that this is going to be the final nail in the proverbial coffin in what would have otherwise been a great little business idea, but hopefully I'm wrong.)
Answer
Insurance will be available, but it will cost.
My Sprinter, which I have leased to Landstar, was almost impossible to insure as a commercial vehicle in interstate commerce. I was fortunate to have the insurance provided by Landstar's main carrier, since it will fall into the general "fleet" of trucks.
Of course I pay for it, but the pricing is fair.
I also tried insurance from the moderator here, no doubt she could have provided it, but the cost was prohibitive.
Answer
Originally posted by Monty:
Insurance will be available, but it will cost.
I also tried insurance from the moderator here, no doubt she could have provided it, but the cost was prohibitive.
Any idea (ballpark) of what the cost would be?
Connie?
I'm not looking for an exact quote (yet), just trying to determine if it's even worth my time to pursue this any further or if I should just give up on the idea now. $1,000/year? $2,000? $10,000? $50,000? Again, I'm looking at a Chevy 3/4 ton passenger conversion van, and a very basic 14 foot cargo trailer, like the kind people often haul their personal motorcycles or snowmobiles in. CGVWR would be (approximately) 13,000 pounds. Actual weight would never exceed 10,000 pounds. Business is door to door delivery of pinball machines and video games, state to state. They're usually worth about $500 each, so maximum cargo value in the trailer at any one time would be about $10,000.00. Don't know if any of this matters, but I figure too much info is better than too little.
Thanks.
- Jeff
Answer
Subject to complete underwriting investigation, including age, experience and driving record and probably a requirement by the insurance provided that would exclude any personal use of the vehicles, you could be looking at:
Liability $4500 - $6500
Cargo $500 - $1000
Physical Damage approximately 5% per $100 of value
Again, this is just a ballpark, could be more or less depending.