Trucking Insurance Strategies: Selecting Between Mileage Established and Gross Receipts Based Premiums

Most bigger trucking companies purchase their trucking liability and freight trucking insurance on either a mileage or gross receipts foundation. The insurance company establishes rates based upon the estimated mileage or sales for the coverage year. Subsequently, during the coverage year end audit, the insurance carrier uses the trucking company’s genuine mileage and sales to “true up” the trucking insurance premium payments.

A Summary of the Mileage and Gross Receipts Choices

In the event the trucking company chooses to pay trucking insurance premiums on a mileage basis, afterward the insurance company establishes a rate based upon the miles the trucking company expects to produce during the year.

An Example


In the event the truck insurance were put on a mileage basis, the premiums would be computed at $3.75 per 100 miles.

That in no way suggests those are “typical” amounts. I know of no insurance provider which will do a mileage or sales established coverage for one truck. We’re just attempting to make sure it stays straightforward.

How Transport Rate Increases Can Impact Your Gross Receipts Based Trucking Insurance Premiums

In case your trucking company is guaranteed on gross receipts foundation and you’re lucky enough to procure a rate increase using a shipper, you must share that increase together with the insurance provider. Here’s why.

Consider the example above. Suppose the truck is assigned to a course that paid you $1.50 per mile both ways and those excursions create 120,000 miles. As the example shows previously, your trucking insurance premium would be set at $4500.

But, what will happen if you were suddenly able to procure an increase to $1.80 per mile both ways. This raises the earnings for this truck to $216,000 — a 20% increase in your sales. And that means your insurance premium only went up by exactly the same percent. Instead of $4,500 per year for that truck, you’ll now have to pay $5,400.

Nevertheless, had you been covered on a mileage basis, your insurance premium would have stayed the same. Your miles stayed the same 120,000. The amount of miles did not improve. Just the quantity of sales.

A Closing Suggestion Viewing Fuel Surcharges

Most trucking insurance policies contain fuel surcharge as part of an organization ‘s “gross receipts”. Yet some insurance companies omit fuel surcharges if consented to in advance. You should ensure it’s expressly understood and in writing how your insurance provider will view fuel surcharge. Do not wait until coverage year end audits to find out. Note: Fuel surcharge isn’t an problem with mileage established coverages.


Before giving to a mileage or gross receipts established trucking insurance premium computation, be sure to have done the mathematics and considered all alternatives. A good qualified trucking insurance agent will lay those out for you as well as be sure to make the best selection for your trucking operation.