Editing Openai/696fdef5-57b4-8007-a615-95e462a36140


{{DISPLAYTITLE:Hotshot Insurance Breakdown}}

''This conversation was exported from ChatGPT''<ref>{{cite web|title=Hotshot Insurance Breakdown|url=https://chatgpt.com/share/696fdef5-57b4-8007-a615-95e462a36140|publisher=ChatGPT|access-date=2026-01-21}}</ref>

== gpt-5-2 ==
=== User: Understanding how insurance works for hotshot and trailer. ===
Understanding how insurance works for hotshot and trailer. CDL, non-CDL, MC, no MC, someone else’s MC number, ETC.

=== Assistant: Below is a plain-English, practical breakdown of how insurance works for hotshot trucking, covering CDL vs non-CDL, MC … ===
Below is a plain-English, practical breakdown of how insurance works for hotshot trucking, covering CDL vs non-CDL, MC vs no MC, and using someone else’s MC number. I’ll organize it the same way underwriters and DOT look at it.

==== 1. First: the 3 things insurance is tied to ====

Insurance is not just about the truck. It’s tied to:
# Who you are legally operating as
# How much weight you haul
# Whose authority (MC number) you are running under

If any one of those changes, the insurance requirements change.

==== 2. CDL vs Non-CDL (Hotshot-specific) ====

===== 🚚 Non-CDL Hotshot =====

Applies when:
* Truck + trailer + cargo ≤ 26,000 lbs GVWR
* Trailer ≤ 10,000 lbs GVWR
* Typical setup: ¾-ton or 1-ton pickup + smaller trailer

Insurance required (minimum):
* Auto Liability (usually $1M if you have an MC)
* Physical Damage (if financed or desired)
* Cargo Insurance (usually $100k, depends on broker)

Key point:
Non-CDL does NOT mean “less insurance” if you have an MC number.

===== 🚛 CDL Hotshot =====

Applies when:
* Combined GVWR over 26,000 lbs, OR
* Trailer over 10,000 lbs GVWR

Insurance impact:
* Higher premiums
* Underwriters scrutinize experience more
* Same types of coverage, but stricter approval

==== 3. MC Number vs No MC Number ====

===== ✅ With Your Own MC Number (Operating Authority) =====

You are a for-hire motor carrier.

Insurance required by law:
* $750,000 minimum auto liability (most brokers require $1M)
* Cargo insurance (not federal law, but market-required)
* Filed with FMCSA (BMC-91X, BMC-34)

You are responsible for:
* Claims
* Compliance
* Audits
* Insurance staying active

This is the most expensive but most independent setup.

===== ❌ No MC Number =====

You are not legally allowed to haul freight for the public unless:
* You are private carrier (your own goods), OR
* You run under someone else’s MC number

No MC = no direct freight contracts.

==== 4. Using Someone Else’s MC Number (Very Common) ====

This is called:
* Leasing on
* Running under authority
* Being under dispatch / carrier authority

===== How insurance works here: =====

You do NOT carry your own motor carrier policy.

Instead:
* The carrier’s insurance covers liability
* You are listed as: - A driver, and/or - A scheduled vehicle

You typically still need:
* Non-trucking liability (bobtail)
* Physical Damage (often required)
* Sometimes occupational accident insurance

===== Pros: =====
* Lower insurance cost
* Easier entry
* No DOT audit stress

===== Cons: =====
* Less control
* Carrier deducts insurance weekly
* Claims affect the carrier’s loss history

⚠️ Critical warning:
If someone says “just use my MC but keep your own insurance” — that is often illegal or non-compliant unless structured correctly.

==== 5. Hotshot + Trailer: Who insures what? ====

===== Truck =====
* Covered under: - Your policy (if you have MC), OR - Carrier’s policy (if leased on)

===== Trailer =====

One of three ways:
# Covered under your policy
# Covered under carrier’s policy
# Listed separately as “trailer interchange”

⚠️ If you pull someone else’s trailer, this must be explicitly covered.

==== 6. Cargo Insurance (where people get burned) ====

Cargo coverage depends on:
* Authority holder (MC owner)
* Type of freight
* Broker contract

Typical requirements:
* $100,000 general freight
* Higher for: - Vehicles - Hazmat - Expedited - High-value loads

If leased on:
* Carrier’s cargo policy applies
* Deductibles can be $1,000–$5,000

==== 7. Common Scenarios (Quick Table) ====

| Scenario                       | MC?          | CDL?           | Whose Insurance?     |
| ------------------------------ | ------------ | -------------- | -------------------- |
| Owner-op hotshot, independent  | Yes          | CDL or non-CDL | Yours                |
| Leased to carrier              | No           | CDL or non-CDL | Carrier              |
| Private hauling own goods      | No           | Depends        | Commercial auto only |
| “Using friend’s MC casually”   | Yes (theirs) | Any            | ❌ Usually illegal    |
| Dispatcher only (no authority) | No           | N/A            | Carrier              |

==== 8. Red Flags to Avoid 🚩 ====
* Running loads under an MC you’re not leased to
* Insurance not filed with FMCSA
* Cargo exclusions you didn’t read
* Trailer not listed on policy
* “1099 driver” but treated like carrier

==== 9. Bottom Line (Plain Truth) ====
* Insurance follows the MC number
* CDL vs non-CDL affects eligibility and cost, not legality
* Leasing on is the safest entry for new hotshot drivers
* Most violations happen due to authority misuse, not driving

If you want, I can:
* Build a decision tree (“If this, then that”)
* Create a one-page insurance cheat sheet
* Review a specific scenario you’re considering
* Explain cost ranges for each setup

Just tell me how deep you want to go.

== References ==
<references />


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