Trucking Insurance in California: Federal and State Requirements

A California trucking operation needs primary auto liability at or above the legal minimum. That's $750,000 combined single limit for most general-freight carriers, both under federal rules for interstate for-hire work and under California's Motor Carrier Permit rules for intrastate work, and more for hazardous materials. On top of that, a working program usually adds motor truck cargo, physical damage on the tractors and trailers, workers' compensation for any employees, and, for owner-operators leased to a motor carrier, non-trucking (bobtail) liability.

The minimum gets you a permit. It doesn't make you insurable by shippers or brokers, and it won't cover a serious crash. This guide explains what each coverage does, which filings regulators expect, and where trucking programs leave gaps. If you want a quote while you read, start on our trucking and transportation insurance page.

The two rulebooks: federal and California

A truck in California can fall under one regulator, the other, or both.

• Federal (FMCSA). The financial responsibility rules in 49 CFR Part 387, Subpart A, apply to for-hire carriers hauling property in interstate or foreign commerce. They also apply to carriers hauling hazardous materials, substances or wastes in interstate, foreign or intrastate commerce (49 CFR §387.3). Vehicles under 10,001 lbs GVWR are generally exempt, except for certain high-hazard loads.

• California (DMV and CHP). Under Vehicle Code §34620, a motor carrier of property can't operate a commercial motor vehicle on a California highway without a CA carrier identification number from the California Highway Patrol and a Motor Carrier Permit (MCP) from the DMV. Under §34507.5 you need a USDOT number before the CHP will issue a CA number.

Many Central Valley and Northern California operations need both. Be careful with "California-only" hauls: freight moving to or from another state or country, including port and rail drayage, can count as interstate commerce even on a leg that never leaves California. Confirm your status before you decide which rules apply.

Federal minimum liability limits (49 CFR §387.9)

These are the federal minimums for vehicles of 10,001 lbs GVWR or more:

Type of carriage	Commodity	Minimum
For-hire, interstate or foreign	Property (nonhazardous)	$750,000
For-hire and private, interstate or foreign (any quantity); intrastate (bulk only)	Oil, hazardous waste, and hazardous materials or substances listed in 49 CFR 172.101 that don't fall in the $5M category	$1,000,000
For-hire and private, interstate, foreign or intrastate	Hazardous substances in bulk in cargo tanks, portable tanks or hopper-type vehicles; bulk Division 1.1–1.3 explosives; bulk poison-inhalation (Hazard Zone A) materials; bulk Division 2.1/2.2 gases; highway-route-controlled quantities of Class 7 radioactive material	$5,000,000

A fourth line sets $5,000,000 for vehicles under 10,001 lbs GVWR that carry the most dangerous materials (bulk explosives, certain poison-inhalation materials, highway-route-controlled radioactive loads) in interstate or foreign commerce.

These numbers are floors, and a single fatality claim can exhaust $750,000. Shippers, brokers and many contracts expect $1,000,000 primary at minimum, and higher-value or higher-hazard freight often needs excess coverage on top. More on that in commercial umbrella vs. excess liability.

California intrastate limits (Vehicle Code §34631.5)

To get and keep a California MCP, you must file proof of financial responsibility with the DMV (Vehicle Code §34630). §34631.5 sets the minimums:

California carrier type	Minimum liability
Most motor carriers of property (general freight)	$750,000 combined single limit
Carriers operating only vehicles under 10,000 lbs GVWR, no petroleum or hazmat	$300,000
Intrastate carriers of petroleum products in bulk (including waste petroleum)	$500,000 per person / $1,000,000 per accident bodily injury plus $200,000 property damage, or $1,200,000 combined single limit
Hazardous materials, oil and hazardous waste (not in the higher categories)	$1,000,000
Hazardous substances or compressed gas in cargo tanks, portable tanks or hoppers over 3,500 water gallons; any quantity of Division 1.1–1.3 explosives, poison gas, or highway-route-controlled radioactive material	$5,000,000

A few points about the California rules:

• "Motor carrier of property" is broad. Vehicle Code §34601 covers for-hire carriers and also private carriers hauling their own goods in commercial motor vehicles, such as two-axle trucks over 10,000 lbs GVWR. A farm supply business or a contractor running heavy trucks can need an MCP even though it never hauls for anyone else. The DMV's MCP page says anyone paid to transport property needs a permit "regardless of vehicle size, type, or weight," and lists some exemptions.

• The insurer files the certificate. The insurer files a certificate with the DMV showing the coverage. Under §34630(b) it can't be canceled on less than 30 days' written notice to the DMV, except when the carrier stops operating.

• A lapse suspends the permit. If the DMV learns your insurance has lapsed, it suspends the MCP effective on the lapse date (§34630(c)), and you pay a reinstatement fee to get it back. Pay premiums on time, especially premium-finance installments.

• The MCP also asks about workers' comp. The DMV requires proof of workers' compensation insurance or a signed exemption.

• Hiring a carrier has rules too. Under Vehicle Code §34620(b), a business can't contract with a motor carrier of property unless that carrier holds a valid MCP. Motor carriers and construction trucking brokers that subcontract hauling must collect a written certification and a copy of the subhauler's permit, and keep them for the life of the contract plus two years.

Not sure which limits apply to your trucks? TSM is an independent agency — we compare carriers for you. Call (209) 524-6366 (Modesto) or (530) 221-3031 (Redding).

The MCS-90 endorsement: what it is and what it isn't

Interstate for-hire carriers must keep proof of financial responsibility at their principal place of business (49 CFR §387.7(d)). For most carriers that proof is the MCS-90 endorsement on the auto liability policy. A surety bond (Form MCS-82) or FMCSA self-insurance approval are the alternatives.

The MCS-90 is often misunderstood. It is a guarantee to the public, not extra coverage for you. Under the endorsement's wording, the insurer agrees to pay a final judgment for public liability up to the federal minimum even if the policy wouldn't otherwise cover the loss. Examples include an unlisted vehicle or a driver excluded by the policy. You then agree to reimburse the insurer for any payment it wouldn't have owed except for the endorsement.

In practice, the MCS-90 protects the injured motorist, and a coverage gap becomes a debt you owe your own insurer. List every power unit, keep driver lists current, and read exclusions before you assume the MCS-90 will save you.

Federal policies can't be canceled on less than 35 days' notice (§387.7(b)), and the endorsement has to be issued in the motor carrier's exact legal name (§387.15). A name mismatch between your authority and your policy is a common filing headache.

The core coverages in a trucking program

Primary auto liability

This pays for bodily injury and property damage you cause to others while operating your trucks. It is the coverage the federal and state minimums apply to. Most trucking policies insure scheduled units, so a tractor bought mid-term isn't covered until it's added. The basics of business vehicle coverage are in our guide to commercial auto insurance for business vehicles.

Motor truck cargo

Cargo coverage pays for damage to or loss of the freight you're hauling. It is usually written on a per-vehicle or per-load limit. Federal minimums don't require it for general freight carriers, but brokers and shippers almost always do. Contracts asking for $100,000 per load are common, and high-value loads ask for more.

Cargo forms vary widely. Typical restrictions include:

• Commodity exclusions or sublimits. Electronics, alcohol, tobacco and other high-theft goods are common examples.

• Unattended vehicle conditions. Some forms exclude theft from a truck left unattended outside set hours or locations.

• Reefer breakdown. Spoilage from refrigeration failure usually needs its own coverage. Check this if you haul Central Valley produce, dairy or nuts that need temperature control.

Physical damage

This covers your own tractors and trailers through comprehensive (fire, theft, vandalism, weather) and collision. Lenders and lessors require it on financed equipment. Insure units at a stated or agreed value you can support, and know whether your policy pays actual cash value, which deducts depreciation, or replacement cost. Downtime is a separate exposure. Some carriers offer rental reimbursement or downtime coverage, and many don't.

Non-trucking liability (bobtail)

An owner-operator leased onto a motor carrier is usually covered by the carrier's primary liability while operating under dispatch. When the truck is used for personal or non-business purposes, the carrier's policy typically doesn't respond. Non-trucking liability fills that gap.

Two cautions:

• "Bobtail" and "non-trucking" aren't always the same product. Some forms cover the tractor without a trailer regardless of dispatch status. Others cover any non-business use, with or without a trailer. Read which one you're buying.

• It is not coverage for hauling. Non-trucking liability typically excludes use in the business of anyone, so it doesn't respond while you're carrying a load, heading to a pickup, or returning from a delivery under dispatch. The leasing carrier's policy is supposed to cover those trips. Confirm it in writing.

Trailer interchange

When you pull a trailer you don't own under a written trailer interchange agreement, such as a shipping-container chassis or another carrier's trailer, the agreement usually makes you responsible for physical damage to it. Trailer interchange coverage pays for that damage. Your own physical damage coverage typically doesn't cover trailers you don't own, and your auto liability doesn't cover damage to property in your care. Drayage operators at the ports run into this constantly.

General liability

General liability covers your premises, yard and dock operations that fall outside the auto policy. Where auto ends and GL begins during loading and unloading depends on policy wording, so ask your agent how yours fit together.

Workers' comp and drivers

Every California employer must secure workers' compensation (Labor Code §3700), and employee drivers are some of the highest-risk employees in the class plan. Premium is driven by payroll in the trucking class codes and your experience modification. See how class codes and the experience mod work and our workers' comp guide for California employers.

Expect a premium audit at the end of each policy term. If you paid drivers you treated as contractors and the auditor decides they are employees, their pay goes into the payroll base and you get an additional premium bill.

AB 5 and owner-operators (brief and cautious)

Since 2020, California has used the "ABC test" (Labor Code §2775) to decide whether a worker is an employee or an independent contractor for the Labor Code, the Unemployment Insurance Code and wage orders. The hiring entity has to prove all three parts. Part B, that the work is outside the usual course of the hiring entity's business, is the hard one for a motor carrier hiring owner-operators to haul freight. The California Trucking Association challenged the law as preempted by federal law. The Ninth Circuit rejected that argument, and the U.S. Supreme Court denied review on June 30, 2022, so AB 5 applies to trucking in California.

The business-to-business exception (Labor Code §2776) applies only if all of its conditions are met, and it turns on the facts. Get advice from an employment attorney before you rely on any exemption.

For insurance purposes:

• If owner-operators may be employees, a workers' comp claim or audit can treat them that way. Talk with your agent about how your carrier's auditors handle leased operators.

• Some carriers require owner-operators to carry occupational accident coverage. That is not the same as workers' compensation and doesn't satisfy Labor Code §3700 for anyone who is legally an employee.

Our article on workers' comp, 1099 contractors and AB 5 covers the general rules.

Trucking insurance checklist

• ☐ USDOT number, and federal operating authority if you haul for hire interstate

• ☐ CA number from the CHP and an active MCP from the DMV

• ☐ Auto liability at or above the federal and California minimums for your commodity, and at the limit your contracts require

• ☐ MCS-90 (interstate for-hire) issued in your exact legal name

• ☐ Every power unit and trailer scheduled

• ☐ Motor truck cargo at the per-load limit your brokers require, with reefer breakdown if you haul temperature-sensitive freight

• ☐ Physical damage at supportable values

• ☐ Trailer interchange if you pull trailers you don't own

• ☐ Non-trucking liability for leased owner-operators

• ☐ Workers' comp for employees, and a written analysis of your owner-operator relationships

• ☐ General liability for yard, dock and terminal, and inland marine for equipment that leaves the yard (inland marine coverage)

• ☐ Certificates that match each broker contract. Learn how to read a certificate of insurance

• ☐ Excess or umbrella above primary auto

FAQs

What insurance is required for trucking in California?

For-hire interstate carriers of general freight need at least $750,000 in auto liability under 49 CFR §387.9. California intrastate carriers need at least $750,000 combined single limit under Vehicle Code §34631.5 to hold a Motor Carrier Permit, or $300,000 if they operate only vehicles under 10,000 lbs GVWR. Hazardous materials carriers need $1 million to $5 million depending on the commodity. Workers' comp is required for any employees.

What is an MCP in California?

The Motor Carrier Permit is issued by the DMV and is required for motor carriers of property operating commercial motor vehicles in California. You need a CA number from the CHP first, plus proof of liability insurance and proof of workers' comp or a signed exemption.

What does the MCS-90 endorsement cover?

It guarantees that the insurer will pay final judgments for public liability up to the federal minimum, even if the policy wouldn't otherwise cover the loss. The carrier must then reimburse the insurer for those payments. It protects the public, not the trucking company.

Do I need non-trucking liability if I'm leased to a carrier?

Usually yes. The motor carrier's policy typically covers you only while you're operating under its dispatch. Non-trucking liability covers personal or non-business use of your truck. It does not cover you while hauling.

Does AB 5 apply to owner-operators in California?

AB 5's ABC test applies to trucking. The U.S. Supreme Court declined to hear the industry's challenge in 2022. Whether a specific owner-operator qualifies as an independent contractor depends on the facts and possible exemptions, so get employment-law advice.