What is Cargo Insurance?
Motor Truck Cargo insurance provides coverage for the goods being moved by for-hire trucking risks. Cargo coverage can be purchased for vehicles from vans and pickups up to tractor trailer rigs. Motor Carriers need cargo coverage to protect themselves from a monetary loss in the event the cargo they are hauling catches on fire, or is damaged or stolen while in transit. Cargo policies can also include coverage for such occurrences as mechanical breakdown of refrigeration units and debris removal after an accident. Other types of claims would include windstorms, overturns and collisions.
Cargo policies come in various limits based on the type of goods and the maximum value on any one unit at one time. The limit of cargo coverage is very important. An accident where the limit of cargo insurance is too low can create not only a financial issue for the motor carrier who is legally liable for the loss, but loss of a customer. A motor carrier should never take a load that is valued higher than their limit of cargo coverage.
Most insurance companies that write cargo insurance require motor carriers to declare the types of cargo they plan on hauling. This along with the limit of cargo coverage allows the insurance company to price the coverage correctly. There are types of cargo that are at a higher risk of theft than others, and usually aren’t covered unless the insurance company knows about them up front and includes them specifically on the policy. Clothes, art, liquor, autos, and certain electronic items are types of cargo that should be explicitly declared to the insurance company.
Cargo policies will have a deductible that must be paid by the motor carrier in the event of a claim. Various deductibles are also available, with lower deductibles being associated with higher premiums, and higher deductibles with lower premiums.