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What does a California trucking, tow, or delivery business have to carry?

Published 2026-10-06 by Insurance City Agency, LLC, CA License #6003045. Reviewed by Santo Militello, California-licensed Property & Casualty agent (CA License #1737723).

Short answer: in California a business that runs a motortruck with two or more axles over 10,000 pounds gross vehicle weight rating, or any motor vehicle that hauls property for pay, is a "motor carrier of property" under Vehicle Code section 34601. Section 34631.5 then requires liability protection on file with the DMV. The general floor is a $750,000 combined single limit. A carrier that runs only vehicles under 10,000 pounds GVWR and hauls no petroleum or hazardous material has a $300,000 floor. Hauling across state lines for hire in a truck rated 10,001 pounds or more adds the federal schedule in 49 CFR 387.9, which also starts at $750,000 for nonhazardous property. Those numbers are legal minimums, not premiums, and not a recommendation. Workers compensation under Labor Code section 3700 applies from the first employee, driver or yard hand. Cargo, on-hook, and physical damage to the truck are not required by either statute, and they are the parts that decide whether the business survives a bad week.

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Where a hauling business actually gets hurt

Most claims on a Stockton, Modesto, or San Jose hauling account start the same way: a vehicle moving slowly in a tight place. A 26-foot box truck backing into a dock on the east side of Stockton clips a parked trailer and a loading-dock door. That is auto liability, because the truck was in use, even though it never left the property. The same afternoon a pallet of appliances shifts on the way to a Tracy distribution center and arrives cracked. The shipper does not file against auto liability. The shipper files a cargo claim, and if the business never bought motor truck cargo coverage, the answer comes out of the owner's pocket.

Tow operators get a version of that problem with somebody else's car. A flatbed loads a customer's pickup off Highway 99 and the winch line slips. The pickup is not the tow company's property and it is not "cargo" in the freight sense. On-hook coverage is the line that answers for damage to the vehicle being towed. A storage lot adds a second exposure: vehicles that sit for days behind the fence after the tow is finished. Ask whether the storage period is written on the same form, or on a garagekeepers form like the one on our auto repair, tire, and garage hub.

Delivery work fails on the paperwork side. A driver doing courier runs in a personal sedan has a personal auto policy written for personal use. A van owned by the business, a family member delivering "just this week," and a leased-on owner-operator driving home empty are three different questions. The leased-on driver is a common gap. The motor carrier's policy usually covers the truck while it is under that carrier's dispatch, and the owner-operator's own non-trucking (bobtail) policy is the piece that answers when the truck is not. The comparison is on leased-on vs. own authority.

What the DMV and FMCSA filings ask for

The state filing. Section 34631.5(b) says the protection is evidenced by a certificate of insurance deposited with the DMV for each vehicle used, issued by an insurer licensed in California or by a nonadmitted insurer under Insurance Code section 1763. The certificate cannot be canceled on less than 30 days' written notice to the department. When it is canceled, the statute says the motor carrier permit stands suspended on the cancellation date, and the carrier cannot operate on a public highway until a new certificate is filed. That is why a late premium payment on a trucking policy is a permit problem, not only an insurance problem.

Higher floors in the same section apply to hauling. A carrier that hauls petroleum products in bulk inside California has a separate schedule in section 34631.5(a)(3), with a $1,200,000 combined single limit as one way to meet it. Hazardous materials follow the federal amounts written into section 34631.5(a)(4): $1,000,000 for most listed hazardous materials and hazardous waste, and $5,000,000 for bulk tank loads over 3,500 water gallons, explosives in Divisions 1.1 to 1.3, poison gas, and highway-route-controlled radioactive material.

Tow trucks. Section 34631.5(c) lets a for-hire tow truck that meets the general limit perform "emergency moves" regardless of what the towed vehicle is carrying: clearing a disabled vehicle from a highway, removing a vehicle after a collision, moving one to protect public safety, or towing for impound at a peace officer's direction. That authority covers only the first one-way move to the nearest safe location. Any later move of that load falls back under the limits that fit the commodity.

The federal filing. For-hire carriers in interstate commerce with a GVWR of 10,001 pounds or more carry at least the 49 CFR 387.9 amounts: $750,000 for nonhazardous property, $1,000,000 for oil and most listed hazardous materials, and $5,000,000 for the bulk hazardous categories in the table. The federal endorsement and the broker paperwork are on what an MCS-90 is and box truck DOT number requirements. Brokers and shippers often ask for more than the minimum in their contracts. A contract limit is a business requirement, not a state one, and it changes which carriers will quote.

The coverage stack, piece by piece

• Primary auto liability. The policy that is filed with the DMV and, when needed, with FMCSA. Written on commercial trucking forms for tractors and heavy trucks and on commercial auto forms for vans, pickups, and light delivery vehicles.
• Physical damage. Comprehensive and collision on the truck itself. A lender on the truck will usually require it. The statute does not.
• Motor truck cargo. Pays for freight in your care while it is hauled. Read the exclusions for reefer breakdown, unattended vehicles, and high-value commodities. Details on cargo insurance and in cargo for owner-operators.
• On-hook. For tow operators, damage to the customer's vehicle while it is attached or loaded. See the tow truck guide.
• Non-trucking liability. For leased-on owner-operators, the time the truck is not under dispatch.
• General liability. The yard, the office, and the customer who trips over a strap at the dock. Auto liability and general liability are written to avoid paying the same claim, so both are usually needed. See general liability.
• Workers compensation. Required from the first employee by Labor Code section 3700. A driver paid by the load may still be an employee under California law. See workers compensation.
• Umbrella. A commercial umbrella sits above the auto and general liability limits when a contract asks for more. Availability over heavy trucks is limited, and we do not promise a carrier will offer it.

What moves the price, without a made-up number

Insurance City Agency, LLC does not print a statewide trucking premium. Two box trucks with the same GVWR can be priced very differently. These are the facts an underwriter asks about first:

• Radius and lanes. Local runs inside San Joaquin County are rated differently from regular trips over the Altamont into the Bay Area or down Interstate 5.
• Commodity. Produce, building materials, autos, and general freight are separate classes. A hazardous load moves the legal floor itself.
• Drivers. Age, years with a commercial license, and motor vehicle records for everyone who drives. A new CDL holder can limit the carrier list.
• Authority age. A first-year authority has no loss runs to show. Read new authority trucking insurance and the cost discussion in what new authority costs.
• Loss history. Three to five years of loss runs from prior carriers, if the business has them.

Bring the DOT and California carrier numbers if you have them, the VIN and GVWR of every unit, the driver list with license numbers, the commodities, the radius, and prior loss runs. Call (209) 670-1556 or use the form.

Trade picker: the hauling work and the page we already wrote

The trades below come from the questions our own customers and search visitors ask, plus the tow and fleet accounts we have written. A dash means there is no dedicated article yet. The row is still work we quote.

Moving household goods is a separate permit under the Business and Professions Code, and section 34601 leaves household movers out of the motor-carrier definition. Passenger carriers are left out too. Those are not on this table.

Frequently asked questions

What liability limit does California require for a trucking company?

Vehicle Code section 34631.5 sets a combined single limit of at least $750,000 for most motor carriers of property, filed with the DMV. A carrier that runs only vehicles under 10,000 pounds GVWR and hauls no petroleum or hazardous material needs at least $300,000. Bulk petroleum and hazardous materials have higher floors in the same section. These are legal minimums, not premiums.

When do the federal FMCSA limits apply?

49 CFR 387.9 applies to for-hire carriage of property in interstate or foreign commerce in vehicles with a GVWR of 10,001 pounds or more. The floor is $750,000 for nonhazardous property, $1,000,000 for oil and most listed hazardous materials, and $5,000,000 for the bulk hazardous categories in the table.

What happens to the motor carrier permit if the insurance is canceled?

Section 34631.5 says the certificate filed with the DMV cannot be canceled on less than 30 days' written notice to the department, and that the motor carrier permit stands suspended on the date the cancellation takes effect. The carrier may not operate on a public highway until a new certificate is filed.

Is cargo or on-hook coverage required by law?

Neither section 34631.5 nor 49 CFR 387.9 requires cargo or on-hook coverage. Those statutes set public liability floors. Brokers, shippers, motor clubs, and lenders often require cargo, on-hook, or physical damage in their contracts.

Do delivery drivers in their own cars need commercial coverage?

A personal auto policy is written for personal use. Whether a delivery job is covered depends on the policy wording and the use. A business that hires drivers or owns delivery vehicles should have the vehicles and the drivers listed on a commercial policy and should ask the carrier how hired and non-owned autos are handled.

Statute text for the figures in this section: Vehicle Code section 34631.5, section 34601, and 49 CFR 387.9. Checked October 6, 2026.

Sources

• California Vehicle Code section 34601. Definition of motor carrier of property and commercial motor vehicle, household-mover and passenger exclusions. Checked October 6, 2026.
• California Vehicle Code section 34631.5. $750,000 and $300,000 floors, petroleum and hazardous-material limits, DMV certificate, 30-day cancellation notice, permit suspension, tow truck emergency moves. Checked October 6, 2026.
• 49 CFR 387.9, Financial responsibility, minimum levels (eCFR). Checked October 6, 2026.
• California Labor Code section 3700. Duty to secure workers compensation. Checked October 6, 2026.

Related

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• Auto repair, tire, and garage businesses
• Contractors and building trades
• Commercial truck insurance in California
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Reviewed by Santo Militello, California-licensed Property & Casualty agent (CA License #1737723). Insurance City Agency, LLC, CA License #6003045. Our licensed team brings more than 70 years of combined insurance experience. Santo Militello is the owner of Via Rapida Services. Phone (209) 670-1556. Insurance City, 956 W Robinhood Dr, Stockton, CA 95207. San Jose office: 25 N 14th St Ste 125. Last reviewed 2026-10-06.