Trucking Authority Frequently Asked Questions
What is the difference between interstate and intrastate commerce?
What is the definition of an authorized for-hire carrier?
What are the definitions of common, contract, and broker Authority?
What is an Exempt For-Hire motor carrier?
What is a USDOT Number?
What is an MC Number?
What is a BOC-3 Process Agent?
What type and how much insurance do I need?
How much does it cost to get my trucking authority?
How long does it take to get my trucking authority?
What is IRP?
What is UCRA?
What is IFTA?
What states require special permits?
What is a Safety Audit?
When will I have a Safety Audit?
Insurance Frequently Asked Questions
What is Physical Damage?
What is Cargo Insurance?
How do I determine if I need Cargo Insurance?
What is Non-Trucking Liability?
What is an Occurrence Form?
What is a Claims-Made Form?
What is an Additional Insured?
What is Replacement Cost Valuation?
What is Actual Cash Value Valuation (ACV)?
What is Agreed Value (Agreed Amount) Valuation?
Trucking Authority Frequently Asked Questions
Q. What is the difference between interstate and intrastate commerce?
A. Interstate commerce in trade, traffic, or transportation involving the crossing of a State boundary. Either the vehicle, cargo, or its passengers must cross a State boundary, or there must be the intent to cross a Stte boundary to be considered an interstate carrier. Intrastate commerce is trade, transportation, or traffic within a single state.
Back to top
Q. What is the definition of an authorized for-hire carrier?
A. Is a person or company that provides transportation of passengers or cargo for compensation. If you are a for-hire carrier, in addition to the USDOT Number you will also need to obtain Operating Authority (MC Number).
Back to top
Q. What are the definitions of common, contract, and broker Authority?
A. Common carriers provide for-hire truck transportation to the general public. Common carriers must file both liability (Bodily Injury and Personal Damage) insurance and cargo insurance. Contract carriers provide for-hire truck transportation to specific, individual shippers, based on contracts. Contract carriers must file only liability (Bodily Injury and Personal Damage) insurance. Brokers arrange for the truck transportation of cargo belonging to others, for compensation, utilizing for-hire carriers to provide the actual truck transportation. Brokers must file either a surety bond or trust fund agreement.
Back to top
Q. What is an Exempt For-Hire motor carrier?
A. Exempt for-hire motor carrier means a person engaged in transportation exempt from economic regulation for the Federal Motor Carrier Safety Administration.
Back to top
Q. What is a USDOT Number?
A. A United States Department of Transportation (USDOT) Number is issued by the Department of Transportation. It tracks all your company’s information with the different Federal and State Agencies. A USDOT Number does not constitute authority to operate in interstate commerce.
Back to top
Q. What is a Motor Carrier Number?
A. An MC Number is issued by the Federal Motor Carrier Safety Administration (FMCSA). It grants the right to commence operations in interstate commerce in the transportation industry. There are several factors involved in obtaining an MC Number including a USDOT Number, BOC-3 Process Agents, and insurance.
Back to top
Q. What is a BOC-3 Process Agent?
A. A process agent is someone who may be serviced with court papers in any proceeding brought against a motor carrier. Every motor carrier (of property or passengers) must have a BOC-3 process agent for each State in which it is authorized to operate and for each state traversed during operations.
Back to top
Q. What type and how much insurance do I need?
A. The Federal minimums for insurance coverage is $750,000 in liability and $5,000 in Cargo insurance. The industry standard is $1,000,000 in liability and $100,000 in Cargo insurance.
Back to top
Q. How much does it cost to get my trucking authority?
A. At www.yourauthorityservice.com we will process your necessary paperwork and we can also provide you with your trucking insurance quotes and placement. The price depends on your particular needs.
Back to top
Q. How long does it take to get my trucking authority?
A. It takes a carrier 4 to 7 weeks to obtain all the operating authority and permits required to operate in Interstate Commerce. You should realize that there are two parts to the process: Federal and State. The Federal portion generally takes about 18 days to complete and then the State permits can take an additional two weeks.
Back to top
Q. What is IRP?
A. The International Registration Plan (IRP) covers the apportioned tags for your power unit. The contiguous 48 states plus Canadian Provinces all participate in the program. You must register with your base state and select the states that you wish to operate in during the current or coming year. The IRP must be renewed annually and has a prorated annual fee. Only vehicles over 26,000 Gross Vehicle Weight participate in the program. The annual IRP fee ranges from $800 - $2,500.
Back to top
Q. What is UCR?
A. The Unified Carrier Registration (UCR) requires that all motor carriers, regulated, exempt and private as well as interstate brokers, Freight Forwarders and leasing companies are subject to the fees under the UCR. These fees are calculated per company based on the number of commercial motor vehicles it operates. Commercial motor vehicles include the total number of trucks, trailers and power units operated by the company.
Back to top
Q. What is IFTA?
A. International Fuel Tax Agreement (IFTA) is a means to pay fuel taxes to the different participating states and provinces by registering and filing quarterly returns with your base state. Only the contiguous 48 States, plus Canadian Provinces and vehicle over 26,000 Gross Vehicle Weight participate in this program. Registration for the program is generally free but some states may charge a registration and decal fee that usually cost under $35.00.
Back to top
Q. What states require special permits?
A. Only four states have special permits that are required to operate within their borders. You can register for these permits upfront or acquire trip permits. The states are New York (HUT), Kentucky (KYU Number), New Mexico, & Oregon (File Number). We do recommend you register for all of these states since most have a very low registration fee of $15.00 or less per truck.
Back to top
Q. What is a Safety Audit?
A. A new entrant safety audit involves a review of the carrier’s safety management system and is conducted by a State of Federal Auditor within the first 18 months of operation. New entrants can expect to start receiving safety audits 3-6 months after they are granted new entrant registration. There is no charge for these safety audits. The areas of review include, but are not limited to, the following:
* Driver Qualifications
* Driver Duty Status
* Vehicle Maintenance
* Accident Register
* Controlled Substances and Alcohol use and testing requirements
Back to top
Q. When and where will I have a Safety Audit?
A. Most likely you will have your first safety audit within the first 3-6 months after you are granted new entrant registration. They will be conducted primarily on-site at the carrier’s principle place of business. However, some safety audits may be conducted at other locations.
Back to top
Insurance Frequently Asked Questions
Q. What is Primary Liability?
A. Primary Liability insurance is required by Sate and Federal regulator agencies and these agencies require proof of insurance documents to be sent to them. Every motor carrier must carry liability insurance on every truck and trailer, as well as leased units. Liability insurance protects you against liability arising from damage or injuries to other people because of trucking accidents. This is generally the most expensive portion of any trucking company’s insurance package. Minimum requirements are $750,000 in liability coverage.
Back to top
Q. What is Physical Damage?
A. Physical Damage is coverage for your truck and trailer and provides protection for your equipment in the event of an accident. Your premium is based on the value of your equipment. This coverage is not required by law, but if you finance your vehicle, the lien holder will require this coverage. It is very important to make sure your vehicle is insured for its replacement value.
Back to top
Q. What is Cargo Insurance?
A. Cargo coverage protects the transporter for their liability in the event of damaged or lost freight. The policy is purchased with a maximum load limit per vehicle. It is very important that you evaluate your financial exposure with each load to make sure that you are adequately protected. Under-insuring a load can prove catastrophic in the even of a loss. These policies can often have exclusions such as unattended vehicles, maximum theft limitations on target commodities such as garments, liquor, electronics etc. Make sure that you understand what your policy covers.
Back to top
Q. How do I determine if I need Cargo Insurance?
A. It depends on the type of authority. If you have common carrier authority, you are required to have on file evidence of both liability (Bodily Injury and Property Damage) and cargo insurance. If you have contract authority, you are only required to have evidence of liability (Bodily Injury and Property Damage) insurance on file.
Back to top
Q. What is Non-Trucking Liability?
A. Non-Trucking Liability coverage provides protection for leased owner-operators while the truck is being operated for personal convenience, outside the scope of the motor carrier’s control or direction, and with no economic benefit to the owner-operator or the lease company.
Back to top
Q. What is an Occurrence Form?
A. An Occurrence Form is a type of general liability policy that provides coverage for claims arising out of an accident that results in bodily injury or property damage which is neither expected nor intended. The form covers such claims that occur during the policy period irrespective of when the claim is made against the company.
Back to top
Q. What is a Claims-Made Form?
A. A Claims-Made Form is a type of general liability policy that provides protection for only those claims reported or first made during the policy period or an pervious period stated in the prior contractual obligations.
Back to top
Q. What is an Additional Insured?
A. An Additional Insured is an individual or entities who are added as insureds to a liability policy because of contractual obligations.
Back to top
Q. What is Replacement Cost Valuation?
A. Replacement Cost Valuation is a property coverage agreement that insures property on the basis of cost to repair or replace rather than actual cash value. Replacement cost pays for the cost to repair or replace damaged items with like kind and quality without deduction for deprecation.
Back to top
Q. What is Actual Cash Value Valuation (ACV)?
A. Actual Cash Value Valuation pays for the cost to replace or refuild damaged property less depreciation.
Back to top
Q. What is Agreed Value (Agreed Amount) Valuation?
A. Agreed Value Valuation is where property is replaced in the event of a loss for a pre-determined stipulated value.
Back to top