Understanding Motor Truck Cargo Insurance

Motor Truck Cargo Insurance is an important, expensive and often times    misunderstood coverage.

Most carriers require the owner operator or company transporting their goods    to have cargo insurance. This coverage protects the owner of the goods as    well as the insured while the cargo is under the care, custody and control    of the transporter.

• Cargo Limits and Premiums may vary depending on the average load,        type of commodities hauled and where the goods are being transported to        and from. Average cargo limits range from $20,000 to $100,000.  Another        example might be a trucker hauling electronics and garments. This cargo        limit may need to be $250,000. Limits are usually determined by the        owner of the goods and this evidence is provided to them by a        Certificate of Insurance from the insurance broker.
• Cargo Policies are often misunderstood because of various        exclusions and limitations that may not have been discussed during the        quoting process. Often times this is due to the fact that the insurance        broker may not specialize in trucking and not understand the impact of        various exclusions or limitations. This is why it is imperative to deal        with a truck broker who knows the transportation business and        understands your individual business as well. If a claim occurs there        may not be coverage.
• Exclusions and Limitations may revolve around target commodities        such as garments, electronics, and liquor. There may be a sub limit for        these categories and higher deductibles. For example, your cargo limit        is $50,000 while you haul cracker jacks but one day you took a load of        computers and Guess jeans valued at $200,000. Your policy only covers        target goods for a maximum loss of $25,000. Therefore, the claim would        only pay $25,000 less your deductible of $1,000.
• Theft Coverage is often capped at lower amount than the cargo        limit with a higher deductible. For example, your cargo limit is        $100,000 but loss due to theft is limited to $25,000 with a $5,000        deductible not $1,000.
• Unattended Vehicle Exclusionis usually found in cargo policies        and simply says that if you leave your loaded vehicle unattended and        there is a loss there is no coverage. For example, a driver who left his        truck loaded at his home or truck stop and a loss occurred would have no        coverage.

Those are just a handful of things to talk about when procuring cargo coverage.    Know your insurance broker and let them know what you do. Don’t hide the    facts so that down the road you will always know you are insured properly.

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