4 Things Truck Drivers Need to Know About Motor Truck Cargo Insurance

Motor Truck Cargo Legal Liability Insurance, also referred to as Cargo Insurance, covers the loss or damage to the freight you are hauling. When hauling cargo, there is always a risk that it could be damaged or stolen. While there are no federal requirements to have cargo insurance, it is highly recommended to better protect yourself and the goods you’re hauling. 

What is Cargo Insurance

Cargo insurance protects you from financial loss if the freight you’re hauling gets damaged or lost. In the event of an accident, cargo insurance pays for the amount you’re insured for only if the event is covered. Cargo damage resulting from collision accidents, fire, and spoilage are examples of covered events in most cargo policies.

Benefits of Cargo Insurance

When hauling cargo, someone is trusting you to safely deliver someone’s assets from point A to point B. The main benefit of motor truck cargo insurance is that you reduce financial loss if the cargo you’re hauling gets damaged. Also, purchasing cargo insurance gives you a peace of mind knowing that if you are covered if your cargo gets damaged

How is Cargo Premium Determined?

The motor truck cargo rate depends on the type of cargo you’re hauling. The classifications can include, but are not limited to the following:

  • Dry Van Freight
  • Flatbed Freight
  • Refrigerated Freight (Reefer)
  • Autos
  • Household Goods Mover
  • Hazmat

As there are many different cargo classifications for a motor carrier, discuss with your agent the types of freight you intend on hauling. Insurance carriers generally classify motor carriers with the highest commodities hauled. So even if you only intend to haul autos 5% of the time and 95% of the time flatbed freight, your premium will be based on being an auto hauler. This is why it is so important to talk with your agent about everything you will be hauling. This ensures that the policy is written the correct way and excludes nothing that you intend to haul. Nobody wants to be stuck with a cargo claim on a commodity that is not covered under their policy.

Please note that the coverages, limits, and explanations of coverages listed here can differ with every motor truck cargo policy depending on the type of cargo hauled and carrier requirements. Please discuss what is included and what can be added on, or endorsed, to your policy or quote with your current agent.

What limits are you required to carry?

There are many factors that determine the cargo limit a motor carrier should carry. Unlike Commercial Auto Liability, generally, the shipper who owns the freight will provide you with a minimum limit required to haul a load for them, not the federal government. The standard limit of Cargo insurance for general freight is $100,000 but this limit can differ. For example, if a carrier is an Auto Hauler, his cargo limit could be anywhere from $150,000 – $1,000,000 depending on the number of autos hauled and the autos conditions.

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About the Author

Hannah Guanipa

Hannah Guanipa

Marketing Coordinator for The Trucker's Network

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