A logistics or order fulfillment business can be tough to own and operate due to the several insurance types required. In this type of work, you not only have to insure your company’s vehicles but also the cargo. Here we bring a comprehensive guide on motor truck cargo insurance that explains why you should buy this insurance and what to look for on your policy.
What is Motor Truck Cargo Insurance?
Motor truck cargo insurance covers the expenses related to a direct physical loss or damage to the freight or commodities while loading or unloading or being hauled by a for-hire trucker. It also covers any cargo loss by fire or collision.
Motor truck cargo insurance can save you money in the long run in case of an accident, hijacking, or any other catastrophic event like damage or loss of cargo.
For instance, if your cargo is accidentally dumped into a waterway or roadway, this insurance covers the cost of removing debris or pollutants caused by spillage or dumping. Some insurance policies pay for the costs of preventing future damage to the damaged cargo and any legal expense associated with settlements or lawsuit defense.
Why Do We Need Truck Cargo Insurance?
When you handle someone else cargo as a trucking transportation company or logistics company, you assume risk. The items can get stolen or damaged during an accident or catastrophic event. Therefore, you need to purchase truck cargo insurance to cover the loss or damage of these goods.
Cargo insurance is necessary for anyone with an economic interest in the goods hauled by a for-hire trucker. (The entity with a financial interest in the cargo is known to have a cargo interest.) Thus, the cargo insurance compensates the cargo interest against unavoidable losses during transport.
How Does Motor Truck Cargo Insurance Work?
When you have motor truck cargo insurance in place, you pay a deductible to your insurance company instead of paying the total value of the commodities. Make sure your insurance is sufficient and covers the value of the goods in the cargo otherwise, in the event of loss or damage, you have to pay out of pocket.
What Property is Covered by Motor Truck Cargo Coverage?
The cargo carried by your vehicle is insured by this coverage, whether it is your property or belongs to someone else. So even if you are shipping goods as a service for another business, you still need motor truck cargo coverage to protect the items against damage.
Moreover, along with the full value of the cargo, your insurance also needs to cover the type of cargo that you’re carrying as there are various options that correspond to the type of goods or hazmat material that you are hauling.
What Risks are Covered by Motor Truck Cargo Insurance?
While some policies might vary, the following risks fall under motor truck cargo insurance:
- Theft or attempted theft
- Lightning strikes
- Damage to the cargo resulting from a collision
- Damage from an aircraft
- Overturned auto
Anytime you have questions about what your policy covers, you can contact your agent to make any necessary changes to your coverage.
Limitations of Motor Truck Cargo Insurance
Motor truck cargo insurance has some restrictions on what is covered, such as the types of dangers and cargo that this policy cannot protect.
The types of cargo that can not be covered by motor truck cargo insurance are:
- Gold and precious metals and stones
- Works of art
- Money, coins, or stamps
Types of risks that are not covered –
- Nuclear hazard
- War and military action
- Damage or loss of goods due to poor handling and packing
- Property that is seized by government authorities
- Criminal acts or malfeasance on the driver’s part
- Damage due to defective products or deterioration
- Faulty refrigeration in the vehicle
- Exposure to extreme temperatures and moisture
- Voluntary surrender of the cargo, like in a case of fraud
- Damage caused by vermin and insects
These restrictions may vary from one insurance company to the other, but your insurance agent would be able to explain in detail what is covered and not covered by your policy. Also, you can work with your agent to adjust your deductible as you can afford it.
Purchasing Motor Truck Cargo Insurance
Consider estimating the exact value of your cargo and noting the type of vehicles that will be hauling it before purchasing cargo insurance, as it has limitations to what it covers. With as much information about the route, cargo, and vehicles in hand, you can visit insurance companies to get a comparison in quotes and what they offer, or you can visit a one-stop shop, like VL 17 Insurance Agency, which represents several companies. With such a company, a qualified specialist can perform the research to compile all the data and quotations you require in order to make a wise choice.
Get a Free Cargo Insurance Quote
To get a free motor truck cargo insurance quote, contact us. We at VL 17 Insurance Agency LLC, provide you with the most comprehensive and affordable plan that meets your business’s needs. Along with details about a policy’s terms, conditions, and limitations, we also provide a list of discounts that may apply to your situation. For getting more information on truck cargo insurance in Texas, call (281)803-8156 or email us at firstname.lastname@example.org. We’ll help you choose the coverage that suits your trucking business.