Motor Truck Cargo Insurance in 2022: A Detailed Analysis

What Risks Are Covered And What Are Not?
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Last Updated: February 07, 2022

If the property you transport is damaged or destroyed, you could be held accountable for providing cargo transportation services. Truck collisions or overturns, as well as fire and theft, are all common risks that could destroy your cargo on its way to its destination. A damaged or destroyed shipment can have a significant negative impact on your relationship with clients, in addition to the price of the disaster. This is why it’s critical to get enough coverage for the transport items. If your insurance does not cover a claim, your company may be held liable for damages, especially if the cargo is expensive. 

What is Motor Truck Cargo Coverage? 

Motor Truck Cargo Coverage, also known as Truck Cargo Insurance is an inland marine insurance policy that protects products and property transported by a motor carrier. It safeguards the value of the client’s property while it is in the freight carrier’s hands. The Federal Motor Carrier Safety Administration (FMCSA) requires Motor Truck Cargo Coverage for vehicles involved in household goods transportation (e.g., moving businesses), and companies who ship products with your company will frequently require it as well. The premium costs and coverage limits for this coverage might vary significantly on the basis of the type and amount of cargo being transported, the distance traveled, and time spent traveling. This means if in a refrigerated truck, your logistics company is transporting a shipment of frozen meals. The truck is damaged in an accident while traveling, causing the refrigeration to fail and the frozen food to expire. Your Motor Truck Cargo Insurance would cover damages. 

commercial truck

What Kind Of Risk Does Motor Truck Cargo Coverage Cover? 

While the cargo you transport for customers is in your custody, Motor Truck Cargo Coverage protects it. Your insurer will give funds to cover the loss of freight is damaged by a covered risk for which your company could be held accountable. Fire, crashes, water damage, refrigeration failure, and theft are common insured risks. However, other risks like damage to your vehicle, other cars, or property other than cargo in transit are not covered. 

Some example of risks that are covered are as follows; 

  • Theft or attempted theft 
  • Vandalism 
  • Lightning 
  • Windstorm 
  • Fire 
  • Explosion 
  • Collision or overturned auto 
  • Damage from aircraft 
  • Riot or civil commotion 

      Therefore, if strong winds and the packages overturn truck carrying, decorative items are ruined. The damages would be covered by motor truck cargo insurance. 

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      What Are Excluded/ Restricted From Motor Truck Cargo Insurance?

      Only for-hire trucking risks on policies with one or more of the following body types are available: dump truck, tractor, most trailers, box trucks, cement mixers, cargo vans, dually pick-ups, flatbeds, and car haulers. 

      Motor truck cargo insurance does not cover garbage trucks, limos, hearses, buses, passenger vans, and ice cream trucks. In addition, the following cargo truck types are not covered: 

      • Live animals 
      • Art, jewelry, money, or paper 
      • Contraband, pharmaceuticals, tobacco, alcohol 
      • Property while in the custody of any other carrier 
      • Property or goods owned by the insured 
      • Property not under Bill of Lading 
      • Storage more than 72 hours 
      • Shipping containers 
      • Explosive or radioactive material 

          Similarly, damage caused by severe temperatures or moisture, damage caused by insects or vermin, loss of property voluntarily surrendered due to fraud, and loss or damage caused by defective packing or rough handling is also not covered.

          Frequently Asked Questions (FAQs)

          What is motor carrier cargo insurance?

          Motor truck cargo insurance is meant to protect the motor carrier’s liability if the customer’s item is shipped being destroyed, damaged, or otherwise lost. It is critical for motor carriers to assess the cargo coverage thoroughly they obtain from an insurance agency.

          How is cargo insurance calculated?

          The insured value times the policy rate is commonly used to determine the cargo insurance premium for a single shipment. What is the insured value, exactly? The simplest way to calculate insured value is to multiply the commercial invoice value of the products by the freight cost, then add 10% to account for additional costs.

          What does hull insurance not cover?

          Marine Hull Insurance’s Exclusions

          Regular hull and machinery wear and tear. Nuclear activities have caused damage—contamination with radioactive material. Crew members who were under the influence of alcohol caused the injury.

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