Insurance Resources for Zero-Emission Trucks
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Background
The California Department of Insurance (CDI) and California Air Resources Board (CARB) have collaborated to study the status of the zero-emission truck insurance market, with an emphasis on drayage vehicles. Research was supported through an industry survey with additional communication and data collection work ongoing. [1]
What types of insurance are commonly needed?
Most fleet owners need more than one kind of insurance coverage.
The two main types include:
- Liability Insurance - Required by law and includes coverage for other people or property if your truck causes an accident. It does not cover damage to your own vehicle.
- Physical Damage Insurance - Covers damage to your own vehicle and is typically broken down into two components:
- Collision Insurance - Covers your own truck if it is damaged in a crash or collision.
- Comprehensive Insurance - Covers loss to your truck that is not due to a crash or collision such as theft, vandalism, or weather-related damage, such as a fallen tree or flooding.
For financed trucks, lenders may require all coverages - liability, collision and comprehensive.
How is the cost of insurance decided?
Insurance companies look at many factors when deciding how much a business will pay for an insurance policy. This amount is called a premium.
Common factors that are considered when setting premiums include: [2] (#_ftn2)
- Type and size of truck
- Age of vehicle
- Vehicle value
- Fleet size
- Where the truck is parked and/or used
- How far and how often the truck drives
- Type of business and operations
- Driver’s history and safety record
Premiums may also vary based on other factors, such as, coverage amounts, payout limits, and the deductible (the amount paid before insurance kicks-in).
Why insurance costs may differ for zero-emission trucks?
Zero-emission trucks, with their advanced technology powertrains, usually cost more upfront than diesel trucks but incentives can help lower the initial price. Over time these vehicles may even cost less to own and operate. Collision and comprehensive insurance coverage is based on the full market value of the truck, not the price after incentives, therefore insurance premiums can be higher. For example, typical physical damage insurance rates are around 3% of the market value of the truck each year, so the more valuable the truck, the higher the insurance cost.[3] (#_ftn3)
The following table compares how insurance costs may generally vary between zero-emission and conventional diesel-powered trucks.
Insurance Coverage and Typical Cost Impacts [4] (#_ftn4)
Coverage Type | Definition | Cost Impact of Zero-Emission vs. Diesel |
Liability (required) | Damage or injuries to other people or property if your truck causes an accident. | No reported difference - cost depends on damage to others, not your truck. |
Collision | Damage to your truck in a crash or collision. | Likely higher – based on the replacement value, which is often higher for electric trucks. |
Comprehensive | Damage from theft, vandalism, or weather (e.g. falling tree). | Likely higher – also based on the full truck value. |
Important Considerations
- Based on the 2024 California Department of Insurance zero-emission drayage truck survey, insurance companies do not charge different rates based on vehicle technology, whether zero-emission or diesel.
- Most insurers do not adjust premiums based on the benefits of zero-emission trucks, like lower maintenance needs or longer-lasting brakes. These features may reduce risk and lead to a beneficial rate impact.
- Although zero-emission trucks may cost more to insure up front, fleets can save money on lower fuel and maintenance bills over time.
- Fleets may purchase insurance to cover either the full vehicle replacement cost or at a lower ‘stated value’ that may be based on potential incentives. For example, CARB does not require recipients of the Clean Truck and Bus Vouchers Incentive Project (HVIP) to repay grant funding during the contract period if the vehicle is totaled. [5] (#_ftn5) Fleets should compare insurance options carefully as individual insurance company and incentive program policies may vary.
- The zero-emission insurance market continues to develop, and additional options may become available as zero-emission vehicles become more common.
Who offers insurance?
The following insurance companies indicated that coverage for zero-emission drayage trucks is available — these are trucks that specifically move goods to and from California ports. Many companies may cover non-drayage vehicles as well. Liability coverage varied between companies, with some offering up to $1 million and others as much as $15 million.[6] (#_ftn6) To learn more, please contact the company directly or speak with a local agent.
A list of companies offering commercial insurance for zero-emission drayage trucks (https://www.insurance.ca.gov/01-consumers/180-climate-change/zero-emission-drayage-trucks.cfm) is available on the CDI website.
For questions about this list, contact: climatesmart@insurance.ca.gov (mailto:climatesmart@insurance.ca.gov)
[1] (#_ftnref1) Note: The mention of a product, company or service does not constitute or imply an endorsement by CARB or CDI.
[2] (#_ftnref2) California Department of Insurance. January 2025. Strategy to Understand and Address Potential Insurance Gaps for Zero-Emission Medium and Heavy-Duty Truck Technologies. https://www.insurance.ca.gov/01-consumers/180-climate-change/upload/Str… (https://www.insurance.ca.gov/01-consumers/180-climate-change/upload/Strategy-to-Understand-and-Address-Potential-Insurance-Gaps-for-Zero-Emission-Medium-and-Heavy-Duty-Truck-Technologies-January-2025.pdf)
[3] (#_ftnref3) Tetra Tech and Gladstein, Neandross & Associates. 2018 Feasibility Assessment for Drayage Trucks. https://www.trccompanies.com/insights/2018-feasibility-assessment-for-d… (https://www.trccompanies.com/insights/2018-feasibility-assessment-for-drayage-trucks/)
[4] (#_ftnref4) Adapted from World Resources Institute. Recommended total cost of ownership parameters for electric school buses: Summary of methods and data. Technical Note V2. January 2025. https://www.wri.org/research/recommended-total-cost-ownership-parameter… (https://www.wri.org/research/recommended-total-cost-ownership-parameters-electric-school-buses-methods-data)
[5] (#_ftnref5) CARB and CalSTART, Implementation Manual for The Hybrid and Zero-Emission Truck and Bus Voucher Incentive
Project (HVIP). October 2024, https://californiahvip.org/im/ (https://californiahvip.org/im/)
[6] (#_ftnref6) California Department of Insurance. Commercial Insurance for Zero-Emission Drayage Trucks.