Motor Truck Cargo Protection:
If you’re new to being an Owner Operator or Motor Carrier, you’ve probably asked yourself:
“So, who’s actually responsible for the freight in my truck if something goes wrong?”
That’s where Commercial Cargo Insurance coverage in the form of Motor Truck Cargo protection comes in.
This specialized insurance is designed to protect the cargo you’re hauling against unexpected events like theft, fire, and collision.
Understanding its importance, coverage options, and limitations is vital to safeguarding both your livelihood and your customers’ goods.
Finding affordable truck cargo insurance is essential if you want to be profitable.
Here’s a cheat sheet on Cargo Insurance for Small Truckers:
Why is Commercial Cargo Insurance Coverage Important for a Small Trucker?
When you haul freight as an independent contractor or motor carrier, you assume responsibility for the cargo while it’s in your care, custody, and control.
If that cargo is damaged or stolen, it’s typically up to you to cover the losses—unless you have Motor Truck Cargo Insurance.
The Federal Motor Carrier Safety Administration (FMCSA) and legislation like the Carmack Amendment make motor carriers liable for freight claims unless the issue falls under specific exceptions like an Act of God or the inherent vice of goods.
Having the right cargo insurance in place is essential to ensure you’re protected.
Commercial Cargo Insurance coverage includes protection from these incidents:
- Theft
- Fire
- Collision
- Striking of Load
Motor Truck Cargo protection often includes additional coverage:
- Debris Removal or Pollution Cleanup
- Earned Freight
- Sue & Labor Clause
- Equipment Protection
Motor Truck Cargo Protection is based on the type of Freight:
Freight is typically broken into 12 main categories:
- Refrigeration Breakdown Commodities
- Aircraft/Auto/Boats
- Building Supplies
- Chemicals
- Construction Materials (Raw)
- Consumer Goods
- Farming/Agriculture/Livestock
- Food & Beverage
- Machinery & Equipment
- Metals/Minerals/Coal
- Miscellaneous
- Paper/Plastic/Glass
Each freight category is then broken into more specific groups:
Refrigeration Breakdown Commodities
Beer/Wine, Dairy, Eggs, Fresh Seafood, Frozen Food (Non-Seafood), Frozen Seafood, Meats/Dressed Poultry, Temperature Controlled Trees/Shrubs/Plants/Cut Flowers
Aircraft/Auto/Boats
Aircraft Engine, Aircraft parts (not engine), Auto accessories (not tires), Automobiles, RV/Travel Trailer/Golf Cart, Carts/Boats, Tires, Other Autos/Aircrafts
Building Supplies
Aggregates Gravel/Rock/Sand/Stone, Asphalt or Cement (Bulk or Dry/Bagged), Carpet (Not Oriental), Dyes/Inks/Paints (Non-Hazardous), Electrical Supplies, Lumber, Marble/Granite/Other Stones Slabs, Mobile/Modular Homes, Pipe, Plumbing Supplies, Tools, Wire, Wood Products (Not Furniture or Caskets), Other Building Supplies.
Chemicals
Chemicals (Non-Hazardous), Cleaning Supplies & Compounds, Dyes/Inks/Paints (Non-Hazardous), Liquids Non-Chemical or Non-Petroleum, Other Chemicals
Construction Materials (Raw)
Asphalt or Cement (Bulk or Dry/Bagged), Aggregates Gravel/Rock/Sand/Stone, Logs, Marble/Granite/Other Stone Slab, Other Construction Materials (Raw)
Consumer Goods
Appliances, Carpet (Non-Oriental), Caskets, CDs/DVDs/Video Games/Tapes, Clothing & Shoes (Non-Designer), Cosmetics/Perfume, Furniture (New), Household Goods (Mover), Musical Instruments, Office Equipment, Pharmaceuticals (Over the Counter), Spas/Hot tubs, Sporting Goods, Toys, Other Consumer Goods.
Farming/Agriculture/Livestock
Cotton (Non-Ginned), Feed and/or Fertilizer, Grain/Hay, Livestock, Mulch/Topsoil and Fill, Non-Temperature Controlled Plants/Shrubs/Trees, Salt, Seeds, Tobacco Leaf (Raw), Other Farming/Agriculture
Food & Beverage
Baked Goods, Beverages (Other than Beer/wine/liquor), Canned Goods, Flour, Fruits, Oils (Edible), Salt, Tea/Coffee/or other Spices, Vegetables, Other Food & Beverage
Machinery & Equipment
Construction Equipment, Electrical or Communication Equipment, Machinery, Medical/Scientific Instruments & Equipment, Office Equipment, Oilfield Equipment, Other Machinery & Equipment
Metals/Minerals/Coal
Aluminum, Coal, Coiled Steel, Iron (Raw) & Ore, Metal Products, Scrap Metal, Steel, Zinc, Other Metals/Minerals/Coal
Miscellaneous
Animal Byproducts, Business Documents/Non-Negotiable Securities, Caskets, Containerized Freight, Garbage, Mobile/Modular Homes, Recycling Materials, Resins, Salt, Scrap Metal, Textiles/Skins/Furs, Other Miscellaneous
Paper/Plastic/Glass
Bottles (Plastic), Containerized Freight, Glass Products, Metal Products, Packing Materials & Supplies, Paper & Paper Products, Plastic Products, Printed Material, Recycling Materials, Rubber Products (not tires), Other Paper/Plastic/Glass
Reefer Cargo Coverage
If you’re hauling refrigerated or temperature sensitive goods, you can add an endorsement for Reefer Coverage to your Motor Truck Cargo Insurance policy.
Reefer insures the freight you’re hauling for damage or loss due to Spoilage or Change in Temperature.
However, this coverage does not apply in cases of poor maintenance, so regular servicing of your refrigeration units is essential.
The damage or loss must be from a sudden accidental breakdown of the refrigeration or heating unit in your truck.
Most Reefer policies include some coverage for Temporary Storage to maintain the freight in the event of an incident.
What is excluded in a Motor Truck Cargo policy?
Motor Truck Cargo policies can differ on exclusions, but by and large these commodities are excluded:
- Art
- Jewelry
- Precious or Semi-Precious Metals or Alloys
- Money and Papers or Securities
- Contraband
- Prescription Pharmaceuticals
- Tobacco
- Alcohol (Beer and Wine are often an exception)
- Explosive or Radioactive Material
- Mobile or Modular Homes
- Shipping Containers (coverage only available for the commodity being hauled)
What else can cause a Cargo Claim to be denied?
- Property while in the custody of any other carrier
- Storage greater than 72 hours unless due to a weather emergency
- Failure to maintain the refrigeration/heating system on a Reefer Truck
- Previously undisclosed exposure to types of commodities being hauled
What limits of Motor Truck Cargo do I need?
The amount of Cargo Coverage you need can be as low as $5,000 or as high as $250,000. It depends on your customer’s requirements.
Most customers request Box Truck Insurance to cover $100,000 in Cargo, so it has become the industry standard.
Same goes for General Freight for Semis.
Sprinter Van Insurance and Cargo Van Insurance can be different.
Some customers will accept less coverage, but the industry standard is still $100,000.
Typical deductibles are $1,000 for general freight and $2,500 or $5,000 for Reefer.
How much does Motor Truck Cargo Insurance cost for a Small Trucker?
Affordable truck cargo insurance IS possible for new Small Truckers.
The premium for motor truck cargo is greatly impacted by your insurance credit score.
If the premium for your Commercial Auto Liability is high, your cargo premium will be high.
When you package your Motor Truck Cargo with your Commercial Auto Policy, your premium is usually lower.
For example, last week a stand-alone Cargo policy for one unit came in at $2,100.
The same $100,000 in Cargo packaged with Commercial Auto Liability brought the Cargo portion in at $993.
Insurance companies make it worth your while to bundle your coverage.
The examples below are based on a good insurance credit score in a bundled package:
The typical Motor Truck Cargo premium for a small Commercial Vans comes in between $500 and $1,000 per year for $100,000 in coverage.
Box Truck Insurance with Reefer at $100,000 runs about $2,500-$3,500 per year. Commodities greatly influence this rate.
Hot Shot Insurance for Duallys hauling cars frequently requires $250,000 in cargo. The premium can run between $1,500 and $2,500 per year.
That same $250,000 cargo limit for a large multi unit Auto Hauler Tractor Trailer can run between $2,500 and $3,500 per year.
Who has the most Affordable Truck Cargo Insurance right now?
Motor Truck Cargo coverage can be bought as a stand-alone policy, but if you’re just starting out, it’s usually cheaper to add it to your Commercial Auto Liability Policy.
For years, new trucking businesses have struggled to find affordable options for Motor Truck Cargo and other types of trucking insurance.
Until recently, Progressive was pretty much the only option for new carriers.
That’s why it’s so exciting that GEICO is stepping up to support new Owner Operators and small Motor Carriers!
We’re proud to be one of the few independent trucking insurance agencies representing them.
GEICO Commercial Truck Insurance has some of the lowest premiums right now, but insurance rates change.
Next year, Progressive or another provider might offer a better deal:)
That’s why we shop around for you at every renewal—we do the work, so you don’t have to!
We’re a small, family-owned agency, and we’ve been helping small businesses and new ventures like yours since 2002.
Check out our CIS 5 Star Google Reviews to see why so many small Motor Carriers and Owner Operators choose CIS!
Just starting to plan your new small trucking business?
Give us a quick call—we’re happy to chat and share some free tips to help you get started without breaking the bank.
Be sure to check out some of our other CIS Commercial Truck Insurance Cheat Sheets:
- Commercial Truck Insurance 101
- What is Commercial Trucking Liability Insurance
- What is Truckers General Liability Insurance
- Who Has the Best Commercial Truck Insurance
- What is Truckers Physical Damage Insurance
Want to get an idea of what kind of numbers you’re looking at today?
Start a quick online GEICO Commercial Truck Insurance Quote.
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