Here's the short version: if you're leased to a motor carrier, you should be listed on their auto liability and their cargo policies, carry your own non-trucking liability, and carry your own physical damage. If you run under your own authority, all of it is yours to buy. Most of the expensive mistakes we see come from operators who are somewhere in between: leased on paper, insured by assumption.
What "leased on" is supposed to mean for insurance
When you lease your truck to a motor carrier, you're operating under their authority. Legally and practically, that means their insurance program is the one that responds when you're working:
- Their primary auto liability covers the harm your truck does to others while you're under dispatch.
- Their motor truck cargo covers the freight you're hauling for them.
- Your non-trucking liability (NTL) covers the driving that happens outside their business. More on that below.
That's the correct structure. But the structure only works if it's actually set up, and this is where a shocking number of leased operators are exposed without knowing it.
Is being an "additional insured" enough?
No. This is the single biggest trap in leased-on insurance, so read this part twice.
Additional insured status is not the same thing as being covered. Getting yourself added as an AI on the carrier's policy (or getting the carrier added as an AI on some owner-operator policy you bought) does not put your truck on anybody's policy. An AI endorsement extends certain protections to a named party; it does not schedule your equipment or your driver.
For the motor carrier's liability and cargo policies to actually pay a claim involving your operation, your specific driver, your tractor, and your trailer have to be physically listed on the carrier's policy, on the driver and unit schedules the insurer keeps. Trucking policies pay for the trucks and drivers that are on them. If your unit isn't on the schedule, the adjuster's first question, "was this truck on the policy?", comes back no, and the claim can be denied. It doesn't matter that you had a certificate in the glovebox. It doesn't matter that someone at the carrier said you were "all set."
We've seen exactly how this goes: an operator leases on, the carrier's office is slow with paperwork, the truck starts running loads, and three weeks later there's an accident. The certificate looked fine. The truck was never added. That operator was hauling uninsured mid-load and had no idea.
What to do about it: before you turn a wheel under a new lease, get written confirmation, from the carrier's insurance agent, not just the safety department, that your driver, tractor, and trailer are on the auto liability schedule and the cargo policy. If they can't produce that, you're not leased on yet. You're just driving.
Should you use the carrier's physical damage program?
We tell our clients no. Buy your own physical damage policy, even when the carrier offers to put you on theirs and deduct it from settlements.
The reason isn't price. It's control. Physical damage covers your truck, the asset your whole business sits on. On your own PD policy, you decide when and whether a claim gets filed. You call your agent, you file, you deal with your adjuster directly, you get the check.
On the motor carrier's PD program, you're at their mercy. The policy is theirs, which means the claim is theirs to file, and you're relying on the carrier to report it, push it, and pass the money through. If they're slow, if they dispute what happened, if the relationship goes sideways, or if you leave the lease mid-claim, your truck sits while someone else decides what happens to it. We've watched operators wait months on a repair that their own policy would have handled in days.
Your truck, your policy. It's that simple. (For what PD actually covers and how valuation works, read Physical damage & non-trucking liability.)
What does non-trucking liability actually do?
The carrier's liability policy covers you in the business of trucking, under dispatch, hauling their freight. It is not built to cover your Saturday. NTL fills the off-dispatch gap: driving the tractor home after dropping a trailer, running to the shop on your day off, personal errands in a 17,000-pound vehicle.
Without NTL, that off-the-clock fender-bender is a personal lawsuit with no policy behind you. Nearly every lease agreement requires NTL for exactly this reason: the carrier's insurer priced their policy for business use and wants nothing to do with your personal driving.
The good news: it's cheap. We sell non-trucking liability for about $40–$50 a month. For the price of a tank of DEF you close the gap entirely.
Get non-trucking liability for about $40-50/mo
Leased on vs. your own authority: the real tradeoff
Leased on, your insurance bill is small: NTL and physical damage, typically a few hundred a month all-in. The carrier pays for the expensive coverage (their $1M liability, their cargo) and recovers it in your settlement percentage. The tradeoff is control: their authority, their loads, their rates, their insurance decisions.
Your own authority, you buy everything: primary liability at $1M because brokers demand it, cargo, physical damage, and the federal filings that activate your authority. For a new authority that's real money, often $12,000–$20,000+ a year for one truck, credit and safety history depending. In exchange you keep the whole rate, pick your freight, and answer to nobody.
Neither is wrong. What's wrong is running leased-on with own-authority exposure (off the carrier's schedules, on their PD program, no NTL) and paying leased-on prices for coverage you don't actually have.
The five-minute audit if you're leased on right now
- Confirm your driver, tractor, and trailer are scheduled on the carrier's auto liability policy, in writing, from their agent.
- Confirm you're listed on their cargo policy the same way.
- Check that you carry your own NTL. If your lease required it and you never bought it, that gap is yours.
- Look at whose name is on your physical damage policy. If it's the carrier's program, understand you don't control your own claims.
- Re-verify when anything changes: new truck, new trailer, new driver. Schedules don't update themselves.
How McClure helps
We set up leased-on operators the right way: we verify with the carrier's agent that your driver and equipment are actually scheduled on their liability and cargo policies, write your NTL at around $40–50 a month, and put physical damage in your name so your truck's claims are yours to control. And when you're ready to get your own authority, we already know your operation. Send us your lease and we'll tell you exactly where you stand today.