Removing a Truck From Your Policy: Why You’re Asked for a Lease Termination or Bill of Sale
You call to take a truck off your policy. Instead of “done,” your agent asks for paperwork: a lease termination or a bill of sale. It feels like a hoop. However, we didn’t invent this one. It comes from an endorsement on your policy called the MCS-90, and that endorsement exists because of your federal filing. Here’s what’s going on, in plain English.
The short answer
- If your policy carries an MCS-90 endorsement (it does if you have your own authority and a federal filing), a court can hold your insurance company responsible for a judgment involving a truck that runs under your authority, even if that truck isn’t on your policy.
- As a result, “it’s sitting in the yard” or “I said remove it” doesn’t get a unit off the schedule. Instead, the insurance company needs proof that the truck is out from under your authority: a lease termination or a bill of sale.
- This is not a Marquee Insurance Group rule. It’s a requirement from the insurance company, and the federal endorsement drives it. In fact, every agent who places MCS-90 policies deals with it.
- Finally, paperwork that doesn’t line up (or a truck that shows up at a roadside inspection after its “removal” date) can cost you far more than the premium you hoped to save.
What a Lease Termination and a Bill of Sale Actually Are
Insurance companies most commonly accept two documents to remove a unit from a scheduled auto policy that carries the MCS-90. Which one applies depends on why the truck is leaving.
An owner-operator who leased on under your DOT number has stopped working under your authority and is taking their equipment with them.
- The unit and the driver usually come off the policy at the same time, because the person leaving owns the truck.
- Both parties sign it, and it shows the date the lease ended.
You (the business) sold the equipment to a third party who has no connection to your company. Typically, that excludes family members too.
- Shows the buyer, the seller, the VIN, the sale date, and signatures.
- Proves you no longer own the truck, so it can’t run under your authority.
What both documents tell the insurance company
In both situations, the message is the same: from this date forward, this truck will not run, haul, or hit a scale under our authority. That is the one thing the insurance company needs to know. Unfortunately, a phone call can’t prove it.
Why “It’s Sitting in the Yard” Isn’t Enough: The MCS-90 Endorsement
Where the MCS-90 comes from
When you get your own operating authority, FMCSA requires proof of financial responsibility. Your insurance company provides that proof in two ways: it files a BMC-91 or BMC-91X with FMCSA (now managed through FMCSA’s Motus registration system), and it attaches the MCS-90 endorsement to your auto liability policy. For background on the filing itself, see why your FMCSA filing shows $750,000 when your policy shows $1,000,000.
The MCS-90 is not ordinary coverage. Rather, it’s a promise the insurance company makes to the public on your behalf, and the language is broad on purpose. Here’s the part that matters for removing a truck:
The insurer agrees to pay “any final judgment recovered against the insured for public liability resulting from negligence in the operation, maintenance or use of motor vehicles subject to the financial responsibility requirements… regardless of whether or not each motor vehicle is specifically described in the policy… [and] no condition, provision, stipulation, or limitation contained in the policy… or violation thereof, shall relieve the company from liability.”
What that language means for your truck
Read that once more. If a truck runs under your authority and hurts someone, the insurance company can owe the judgment whether or not that truck is on your schedule, and whether or not you followed the policy terms. Afterward, the endorsement lets the insurance company come back to you for reimbursement, but the public gets paid first.
So when you ask to remove a unit, the insurance company isn’t just adjusting your premium. Instead, it wants to confirm that this truck is truly out from under your DOT number, because if it isn’t, the federal promise still follows it. A truck “sitting in the yard” is still your truck, still under your authority, and one dispatch away from the road. In contrast, a lease termination or bill of sale proves it isn’t.
This is not a MIG policy, and it isn’t about commission. Removing a unit lowers your premium, and we want that for you, because a smaller bill and a clean schedule make for an easier renewal. Our Operations and Renewal teams ask for these documents for one reason: the insurance company requires them before it will process the removal. If we skipped that step, the unit would simply stay on your policy.
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What Happens When the Paperwork Doesn’t Line Up
Once you remove a unit with a lease termination or bill of sale, the insurance company no longer expects that truck to show up under your authority. If it does, the situation gets expensive fast.
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The truck gets inspected after the removal date
Roadside inspection data ties back to your DOT number. So if a unit you “removed” on the 1st goes through an inspection under your authority on the 15th, the insurance company will see it.
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The dates on the document don’t match
Likewise, a bill of sale with a date after the removal date you requested, or a lease termination that conflicts with driver records, raises the same flag.
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Some insurance companies treat that as fraudulent documentation
Depending on the market, the insurance company may back-date the premium for that unit all the way to policy inception and bill you for it. That can wipe out years of “savings” in a single endorsement. Worse, it can affect your standing with that market at renewal.
Fortunately, the fix is simple: only remove a unit when it is truly gone, and make sure the document’s date matches the date it left.
Are There Other Documents an Insurance Company Might Accept?
Sometimes, but it depends entirely on the insurance company and the underwriter reviewing the request at that time. None of these are guaranteed. Also, MIG can’t approve them; we can only submit them for the insurance company’s review.
- Hotshot operations: some markets will accept proof that a personal auto policy now covers the unit. In that case, we submit the proof to the underwriter, and the underwriter decides whether it’s enough.
- Mechanic’s statements: some (not all) markets may accept a written statement from a repair shop confirming a unit is inoperable and in their possession.
- Salvage or total-loss reports: some markets may accept salvage documentation when a unit has been wrecked or scrapped.
If you think one of these applies, send it in. Just know that “some markets accept it” means exactly that: it’s market by market and request by request, and the underwriter has the final say.
Scheduled Auto Policies vs. Reporting Policies
Everything above applies to scheduled auto policies, where the policy lists each unit and driver. That covers the vast majority of trucking policies.
However, if you’re on a reporting policy (where you report units and drivers on a schedule, often monthly, and the insurance company calculates premium from those reports), the rules for adding and removing equipment may differ. Check your policy terms or ask your account manager which type you have. Not sure how to tell? Our guide to reading your trucking insurance policy walks through the declarations page and the schedule of covered autos.
Removing a Unit the Clean Way
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Gather the right document first
Use a lease termination if an owner-operator is leaving with their truck, or a bill of sale if you sold it. Either way, make sure it shows the VIN and the effective date.
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Submit a policy change request
MIG clients can submit a policy change request online and attach the document. From there, your service team submits it to the insurance company.
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Wait for confirmation before you consider it done
The unit comes off your policy when the insurance company processes the endorsement, not when you send the email. Once that happens, your updated schedule will show in the Client Portal.
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If that truck ever needs to come back, call first
If a removed unit (or its driver) needs to go back on the policy for any reason, contact an authorized MIG representative and get it scheduled before it operates. After all, running a removed truck under your authority is exactly the situation the MCS-90 covers, and exactly what the insurance company will check.
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Frequently asked questions
Why do I need a lease termination or bill of sale to remove a truck from my insurance?
Because your policy carries the MCS-90 endorsement, which can make your insurance company responsible for a judgment involving any truck that runs under your authority, even one that isn’t on the policy. A lease termination or bill of sale proves the truck is no longer under your authority, and that is what the insurance company needs before it will remove the unit.
Can’t I just tell my agent the truck is parked and not being used?
A parked truck is still your truck, under your DOT number, and you can dispatch it at any time. That’s why the insurance company won’t remove it on a verbal statement. If the truck is truly gone (you sold it, or an owner-operator left with it), the document proves it. On the other hand, if it’s parked but still yours, talk to your account manager about your options, which vary by insurance company.
Is this a Marquee Insurance Group rule?
No. This is a requirement from the insurance company, and the federal MCS-90 endorsement that comes with your filing drives it. Any agency that places a policy with an MCS-90 will ask for the same documentation. MIG’s team collects it and submits it; then the insurance company makes the decision.
What if I’m a hotshot and moved the truck to my personal auto policy?
Some insurance companies will accept proof of personal auto coverage as documentation for removing a hotshot unit. In that case, we submit the proof to the underwriter for review. Acceptance is up to the underwriter and varies by market.
What happens if a removed truck gets inspected under my authority later?
The insurance company may treat the removal documentation as fraudulent. Depending on the market, it can back-date the premium for that unit to policy inception and charge you for it. So if a removed unit ever needs to operate under your authority again, contact an authorized MIG representative and get it scheduled on the policy before it runs.
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Marquee Insurance Group is an independent insurance agency, not an insurance company. This article is general information, not legal, regulatory, or coverage advice. Each insurance company sets its own documentation requirements for removing equipment, and those requirements may change; the examples here describe common practice and do not guarantee what any insurance company will accept. Confirm current requirements with your policy terms and your insurance company. MIG is available Monday through Friday, 8 a.m. to 5 p.m. Eastern, during normal business hours.
Sources: 49 CFR 387.7, Financial responsibility required · 49 CFR 387.15, Forms (MCS-90 endorsement) · FMCSA, Insurance Filing Requirements · FMCSA, Form MCS-90 (PDF)
