When using a reporting program, a carrier and insurance company agree on a rate per mile of insurance to charge throughout the year. Then you as a carrier report your monthly mileage to the insurance company and pay premium based on what you actually ran.

Here is an example of how this works:

USA Trucking Inc agrees with a proposal that is rated at 7.5 cents per mile for liability/physical damage and cargo coverage. In month one, USA Trucking Inc runs 125,000 miles. They get an invoice from the insurance carrier for $9,375. In month two, they only run 100,000 miles. They get an invoice from the insurance carrier for $7,500. 

USA Trucking also does not owe the insurance until after they run the miles so they have time to collect on their payables before the insurance is due.

These programs also do not require you to list specific trucks. You do not have to notify the insurance company if you add or delete a truck. You get coverage for any owned or operated unit. We just care about your monthly usage. 

Once carriers go to a mileage-based plan, we rarely see them return to any form of scheduled unit policy. Carriers can build their insurance cost into every freight bid they do since they know exactly what the mileage will cost them. We see the most benefit of this plan for carriers that have between 10-50 power units.