Truck Insurance Audits: What to Expect and How to Prepare
Key Takeaways
- There are two very different audits. An insurance premium audit checks your actual exposure. An FMCSA safety audit checks your safety compliance.
- A premium audit can go either way. You may receive a credit, or you may owe additional premium.
- Premium audits usually happen after your policy term ends, when your estimates are compared to your actual numbers.
- New carriers face an FMCSA safety audit within their first 12 months of operation.
- Good records make both audits easier.
The word “audit” makes many truckers nervous. In most cases, an audit is simply a check to make sure your policy and your operation match. Knowing what to expect helps you avoid surprises.
Two Types of Audits
| Insurance Premium Audit | FMCSA New Entrant Safety Audit | |
|---|---|---|
| Who does it | Your insurance company | The FMCSA or a state partner |
| What it checks | Whether your actual exposure matches the estimates used to price your policy | Whether your safety practices meet federal rules |
| When it happens | Usually after the policy term ends | Within your first 12 months as a new carrier |
| Possible result | A refund or an additional premium | Pass, or required corrective action. Failing to correct can lead to revocation of your registration. |
The Insurance Premium Audit
Some commercial policies are priced on estimates given at the start of the policy, such as payroll, revenue, or other measures of exposure. At the end of the term, the insurer compares those estimates with your actual numbers.
- If your actual numbers were lower, you may receive a credit.
- If they were higher, you may owe additional premium.
What Records You May Need
- Revenue or gross receipts records
- Payroll records, if your policy includes coverage rated on payroll
- Lists of trucks, drivers, and any changes during the term
- Mileage records, if relevant to your policy
- Certificates of insurance from subcontractors or owner-operators you hire
How to Avoid Surprises
- Give accurate estimates when you buy the policy
- Tell your agent about changes during the term, such as new trucks or more revenue
- Ask exactly how your policy is rated and what will be audited
- Keep your records organized throughout the year
The FMCSA New Entrant Safety Audit
New carriers are monitored for 18 months, and the FMCSA conducts a safety audit within the first 12 months of operation. It reviews areas such as:
- Required insurance coverage
- Drug and alcohol testing program
- Driver qualifications and licenses
- Hours-of-service records
- Vehicle inspections and repairs
Some violations, such as operating without required insurance or not having a drug and alcohol testing program, can cause an automatic failure. Carriers that fail must correct the issues, or their registration can be revoked.
Our Permits & Compliance department can help you prepare. Read more in our guide on how to start your own trucking authority.
Frequently Asked Questions
What is a truck insurance premium audit?
It’s a review the insurer does, usually after your policy term ends, to compare the estimates used to price your policy with your actual numbers. It can result in a credit or an additional premium.
Can an insurance audit raise my premium?
Yes. If your actual exposure, such as revenue or payroll, was higher than estimated, you may owe additional premium. If it was lower, you may receive a credit.
What is the FMCSA New Entrant Safety Audit?
It’s a federal review of a new carrier’s safety practices, done within the first 12 months of operation. It checks insurance, drug and alcohol testing, driver qualifications, hours of service, and vehicle maintenance.
What happens if I fail the New Entrant Safety Audit?
You must correct the problems. If you don’t, the FMCSA can revoke your USDOT registration.
How do I prepare for an audit?
Keep organized records, give accurate information when you buy your policy, report changes during the term, and ask your agent how your policy is rated.
Get Help Staying Audit-Ready
Our bilingual team helps you understand your policy, keep your filings in order, and prepare for both types of audits.
Learn more about our commercial truck insurance in California, request a free trucking insurance quote, or call us at (800) 924-7070. You can also visit one of our 10 offices in Southern California.
