Understanding Auto Liability for Trucking Fleets: Limits, Split Policies and When It Applies

Auto liability is one of the foundational coverages for U.S. trucking fleets. It protects your company against legal liability for bodily injury (BI) and property damage (PD) resulting from the ownership, maintenance or operation of commercial vehicles. This article explains required and common limits, the difference between split limits and combined single limits (CSL), when auto liability applies versus other coverages, and practical guidance for fleets operating in high-exposure U.S. markets like Texas and California.

Key takeaways (quick)

• Federal minimums exist for interstate carriers (see FMCSA); most shippers and brokers expect higher limits.
• Common elective limits: $1M, $2M and $5M; many fleets choose a CSL for simpler claim handling.
• Split limits (e.g., 250/500/100) remain common for smaller or local risks; CSL is preferred when defense costs and jury awards are significant.
• Auto liability covers legal liability for BI/PD from vehicle use — it does not replace cargo insurance, physical damage, or contingent coverages.
• Market premium ranges vary widely by geography, fleet profile and claims history — expect significantly higher rates in high-litigation states (e.g., California, New York, New Jersey).

Sources and further reading:

• FMCSA — Minimum financial responsibility for motor carriers: https://www.fmcsa.dot.gov/regulations/minimum-levels-financial-responsibility-commercial-motor-vehicles
• Insurance Information Institute — Commercial auto overview: https://www.iii.org/article/what-is-commercial-auto-insurance
• Progressive Commercial (market guidance & product pages): https://www.progressivecommercial.com/insurance/truck/

What auto liability covers (and what it doesn’t)

Auto liability typically pays:

• Bodily injury to third parties (medical bills, pain and suffering, lost wages, legal defense).
• Property damage to other vehicles, structures or property caused by your vehicle.
• Legal defense and settlements/judgments up to the policy limit.

Auto liability typically does NOT cover:

• Your cargo loss or damage — that’s cargo insurance. See Cargo Insurance Explained: Limits, Valuation Methods and Typical Exclusions for Carriers.
• Physical damage to your own truck or trailer — that’s collision/comprehensive (physical damage). See Physical Damage Coverage for Trucks and Trailers: Collision, Comprehensive and Agreed Value Options.
• Certain contractual liabilities or breach of contract exposures unless an endorsement applies.

Regulatory minimums vs. market practice

• The FMCSA sets minimum levels of financial responsibility for interstate motor carriers. The commonly cited federal minimum for most property-carrying operations is $750,000 (check FMCSA for specifics and exceptions). Many commodities (hazardous materials, high-risk loads) require higher levels or separate pollution liability. See FMCSA for details.

• In practice, most brokers and shippers require $1,000,000 to $5,000,000 of auto liability depending on cargo and contractual exposure. Higher limits reduce the chance that judgment exceeds your policy and forces out-of-pocket exposure or bankruptcy.

Table — Common liability limits and when fleets choose them

(Reference: FMCSA minimums and industry market practice.)

Split limits vs. Combined Single Limit (CSL)

Understanding limit structure is essential when evaluating premiums and exposure.

• Split limits are expressed as three numbers: BI per person / BI per accident / PD per accident. Example: 250/500/100 means $250,000 per person bodily injury, $500,000 per accident bodily injury, $100,000 property damage.

  • Pros: Can be less expensive for low-severity, low-frequency risks; buyers can tailor BI vs PD allocations.
  • Cons: Can be complex to apply at claim time; may leave insufficient BI protection in large-injury accidents.

• Combined Single Limit (CSL) is one aggregate limit that applies to all BI and PD on a per-accident basis, e.g., $1,000,000 CSL.

  • Pros: Simpler claim handling, avoids per-person caps, often preferred by brokers and shippers; better protection where verdicts/jury awards are unpredictable.
  • Cons: Sometimes slightly higher premium vs. low split limits but better for catastrophic loss protection.

Table — Split limits vs CSL (simplified)

When auto liability applies — practical scenarios

Auto liability applies when a motor vehicle’s operation leads to BI or PD where your fleet is legally liable. Common scenarios:

• At-fault collisions with other vehicles or pedestrians on public roads.
• Accidents during delivery or pickup while the vehicle is in motion.
• Certain loading/unloading incidents if the vehicle’s operation or movement caused third-party injury or damage (note: cargo loss to the shipper/customer is usually a cargo claim).
• Accidents involving company-owned drivers, leased drivers on your MCS-90 endorsement, or drivers under your control.

Situations that commonly raise questions:

• Employee driving personal vehicles for company tasks — may be covered under hired/non-owned auto or employer’s liability depending on policy wording.
• Independent contractors — coverage depends on contract, whether their insurance is primary, and whether they are properly named as insureds or meet the insured contract conditions.

For details on coordinating liability, cargo, and physical damage see: How Liability, Cargo and Physical Damage Interrelate: Building a Coordinated Trucking Insurance Program.

Typical premium ranges — examples by company and location (U.S. market)

Premiums vary dramatically based on:

• Vehicle type (straight truck vs tractor-trailer Class 8), mileage, driving territory and exposure to interstate/regulatory requirements.
• Claims history and CSA scores.
• State litigation environment (California, New York and New Jersey typically drive higher premiums).
• Driver hiring practices and safety programs.

Market examples (illustrative estimates observed in the U.S. market — obtain quotes for accuracy):

• Local delivery straight trucks (commercial auto liability only): $2,000–$8,000 per vehicle per year in lower-litigation markets (e.g., Houston suburbs), depending on limit and deductible.
• National long-haul Class 8 tractors with $1M CSL: $8,000–$20,000+ per power unit per year; higher in Los Angeles/California due to court awards and density.
• Higher limits (e.g., $2M–$5M) or higher-risk operations: $15,000–$40,000+ per power unit annually for poor loss history or hazmat lanes.

Company examples:

• Progressive Commercial and GEICO Commercial are major writers of trucking liability for small-to-mid fleets and typically provide competitive pricing for compliant fleets with strong safety programs (see Progressive Commercial: https://www.progressivecommercial.com/insurance/truck/).
• National wholesale brokers (Aon, Marsh) and specialist MGAs place larger or more complex accounts and negotiate higher-limit placements — their solutions and costs reflect that complexity.

Note: These are market-range illustrations; actual quotes depend on underwriting specifics. For advanced purchasing strategy see: Typical Policy Limits and Deductible Strategies for Trucking and Logistics Insurance Buyers.

How to choose limits and structure for your fleet

Consider these steps:

1. Start with regulatory and contract requirements. Meet FMCSA minimums and any shipper/broker contractual minimums.
2. Assess your exposure by lane and cargo. Long-haul interstate, hazmat or metropolitan runs need higher limits.
3. Prefer CSL if you run in high-litigation states (CA, NY, NJ) or if you carry high people-exposure routes.
4. Layer excess/umbrella — buy primary GL/auto limits and then purchase excess liability to reach $2M–$20M total, depending on risk tolerance.
5. Use risk control to lower premiums — telematics, driver training, ELD compliance, and strict hiring standards materially reduce underwriting friction and premium.
6. Coordinate with cargo and physical damage programs — avoid coverage gaps. See the related checklist: Checklist: Essential Coverages and Endorsements for New Trucking and Logistics Operations.

Final recommendations for fleet managers (Texas & California focus)

• In Texas (e.g., Dallas–Fort Worth) evaluate mid-range limits ($1M–$2M) for most regional fleets; long-haul or broker-required lanes often require $2M–$5M.
• In California (e.g., Los Angeles/Long Beach), strongly consider CSL and higher primary limits plus excess coverage; litigation climate and high exposure lanes make lower limits risky.
• Request multiple competitive bids — carriers such as Progressive and GEICO Commercial are strong options for small fleets, while brokers and specialty MGAs serve larger or higher-risk operations.
• Regularly review contracts with shippers/brokers to ensure your limit structure meets both regulatory and contractual obligations.

For deeper dives on related topics, see:

• Trucking and Logistics Insurance 101: Breakdown of Liability, Cargo and Physical Damage Coverages
• When to Use Primary vs Contingent Coverages in Trucking and Logistics Insurance
• Cargo Insurance Explained: Limits, Valuation Methods and Typical Exclusions for Carriers

If you need, I can build a sample limits strategy and estimated premium worksheet tailored to your fleet size, home state (e.g., Texas vs California) and primary lanes.