Motor Truck Cargo coverage protects the transporter for his responsibility in the event of damaged or lost freight. The policy is purchased with a maximum load limit per vehicle. Under insuring the load can prove catastrophic to you in the event of a claim. Motor truck cargo insurance protection is required under the Motor Carrier Act of 1935.
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.
The transporter of freight, and commodities, assumes responsibility for the cargo he has taken control of. The amount of that responsibility should be clearly established and understood by both the shipper and the transporter before the shipment is moved. This is usually done by contract, by bill of lading disclosure, or by published tariffs. Unfortunately, this level of detail is often overlooked by both parties.
This insurance policy, without question, requires careful thought and evaluation prior to purchasing. In addition, you need to be constantly evaluating the nature of your freight to make sure the coverage meets the demands.
The Motor Truck Cargo policy can be, and usually is, tailored to meet your operations and exposure. A good insurance broker will ask you pertinent questions that properly address this concern.
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. 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 Exclusion is 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.
Motor Truck Cargo Insurance is an important, expensive and often times misunderstood coverage.
Rapid Financial & Insurance Services, Inc. understands the trucking industry so that you purchase the right insurance with the best company at the lowest price.