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

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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:

1. Who you are legally operating as
2. How much weight you haul
3. 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:

1. Covered under your policy
2. Covered under carrier’s policy
3. 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.