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 $20,0000 to $100,000. For
example, a household goods mover in California is required by the state
to carry a minimum of $20,000 to obtain his PUC authority. 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.
These are just a few 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.
Past Editions
Understanding your insurance payment options
Understanding Motor Truck Cargo Insurance
