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.