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What is Motor Truck Cargo Insurance?
When you are hauling goods, motor truck cargo insurance covers losses arising from damage to those goods. You’ll want to assure your client that their cargo will make it safely to the destination or that they will be reimbursed if it doesn’t. Any number of things can go wrong while goods are in transit, so getting broad cargo coverage is a must.
Stand Alone Cargo Insurance vs a Package?
There are several factors that drive cargo insurance premiums such as limits and the types of goods you are hauling. One thing to consider is whether it’s cheaper to get stand-alone cargo coverage, also knows as a cargo-only policy, or if you come out ahead when bundling the cargo insurance with your primary liability and physical damage coverages. It would be wise to shop it both ways.
3 questions to ask before getting your cargo policy
1. How much Cargo Insurance do I need? Limits, Deductibles, and Exclusions can be confusing. How much cargo insurance you need will depend on what you are hauling, and the limits the shippers and freight brokers will require for the load. You also never want to be in a situation where you are carrying cargo that’s worth more than your policy limits.
2. How easy is it to get certificates of your cargo insurance? Last thing you want is to secure a lucrative load, only to not be able to produce a certificate of insurance in time. Make sure your agent can get those to you quickly, or better yet, make sure you can get them 24/7 online.
3. Can you get new coverage quickly? If you stumble upon a lucrative load that is outside the normal goods you haul, will your insurance broker be able to help you get additional coverage in a pinch?
How much does it cost to insure cargo?
Typically cargo insurance for truckers will range from $400 – $1800 per year. The rates will also vary tremendously between insurance providers. Cargo rates also are largely determined by what you are hauling and your limits. No surprise there. It’s will cost more to insure a truckload of shrimp than a truckload of hay.
The bottom line is that you need to quotes from with a providers that is competitive with the types of loads you haul. There is no easier way to shop the market and get a true comparison.
Commonly Overlooked Cargo Coverages
You’ll want to make sure your cargo is covered for a wide variety of risks. It’s never fun to have some type of cargo loss and then find out there was an exclusion for that loss. Some scenarios to consider would be:
- Stolen or hijacked goods
- Water leaks in the trailer that damage the cargo
- Cargo damage during loading or unloading
- Refrigeration equipment breakdown resulting in spoiled cargo
- If your load is strewn about the highway after an accident, you’ll need to make sure you have debris removal covered in the policy.
These are just a few perils that might happen to your cargo. Look for broad coverage without exclusions.
Motor Truck Cargo Limits
The insurance companies will only pay up to the maximum limit found in the policy they wrote for you. The federal government only requires a cargo limit of $5,000. This was set a long time ago (1935!) and you don’t really see policies with that amount. Typically limits range from $50,000 to $250,000. The most common cargo limit is 100k. Limits above 250k are also written depending on the value of the cargo being hauled. When you pick up a load your client is going to want to see a copy of your cargo insurance certificate.
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