Do I need motor truck cargo insurance if FMCSA does not require it?

Does FMCSA require cargo insurance?

For most carriers, no. FMCSA's insurance filing chart lists the insurance a for-hire motor carrier must have on file for its operating authority. For a for-hire carrier of non-hazardous property, the cargo insurance requirement is $0. The public liability requirement is a different line:

FMCSA's chart also has a line for vehicles under 10,001 pounds. We do not state a figure for them, because the liability rules exclude those vehicles from the standard minimums (49 CFR 387.3(c)). If you run smaller vehicles, ask FMCSA or an agent which rules cover you.

Two points to take from this.

• The big federal number is liability, not cargo. Public liability pays for harm to other people. No motor carrier may operate until the required levels are in effect (49 CFR 387.7(a)). It does not pay for the freight on your trailer. See primary auto liability.
• The one federal cargo requirement we found is for household goods carriers, at $5,000 per vehicle on FMCSA's chart. That is the exception, not the rule. Brokers, by the way, file a $75,000 bond or trust fund, not cargo insurance, and have no cargo requirement on that chart.

This is the federal filing picture. Your state may have its own rules for intrastate operations, and we did not review them. Check with your state agency.

Why do brokers and shippers ask for it anyway?

Because the law puts the loss on the carrier. Under the federal provision that governs carrier liability for goods in transit, a carrier that delivers the property and the carrier that issues the receipt or bill of lading are liable to the person entitled to recover, and "the liability imposed under this paragraph is for the actual loss or injury to the property" (49 U.S.C. 14706(a)(1)).

In plain terms: when you accept a load, you are generally on the hook for it from pickup to delivery. If it is damaged, stolen, or lost, the shipper or broker can hold you to the value of the loss, and no federal filing stands between you and that bill. Three things in the same law shape how it plays out:

• Limits are possible, in writing. A carrier can limit its liability to a value established by the shipper's written or electronic declaration or by a written agreement with the shipper, if that value is reasonable under the circumstances (49 U.S.C. 14706(c)(1)(A)). It does not happen by default. Read what you sign.
• Claimants get time. A carrier cannot provide for a claim-filing period shorter than 9 months, or a period shorter than 2 years for bringing a lawsuit, so a claim can reach you months after the haul (49 U.S.C. 14706(e)(1)).
• You have to answer claims on a clock. Under FMCSA's claims rules, a carrier must acknowledge a written claim within 30 days, and pay, decline, or make a firm compromise offer within 120 days of receipt, or explain the delay in writing every 60 days (49 CFR 370.5 and 370.9).

Example only. The numbers are invented to show the exposure. You haul a load and part of it is damaged, and the shipper files a claim for $18,000. With cargo coverage, the policy responds to a covered loss up to its limit, after any deductible, and subject to its exclusions. Without it, that $18,000 is a bill you pay yourself, on a timeline set by the claims rules.

So brokers and shippers ask for cargo coverage because it gives them a way to be paid without chasing a small carrier for the money. That is a business reason, not a federal rule, and they usually put it in the contract or the carrier packet.

What do brokers and shippers usually ask for?

Requirements differ by customer, and they sit in contracts, not in federal filings. Common things to look for:

• A limit. Often tied to the value of the loads you will haul. We do not state a number, because it depends on the freight and the contract.
• Proof of coverage. A certificate of insurance, with the broker or shipper named as certificate holder where required.
• Commodity fit. Some goods are restricted or excluded by policies, so confirm yours is covered.
• Reefer breakdown coverage for temperature-controlled loads, which is an endorsement and not part of every policy.
• Per-unit and per-occurrence terms. How the limit works if a loss involves more than one truck.

A limit that is fine for one load can be too low for another, and the limit your broker lists is the one to start from. The tool below asks five short questions about your operation and shows which coverages usually come up, what federal rules require, and what contracts commonly ask for. It shows no prices.

What does cargo coverage usually leave out?

Policies vary. Read declarations, definitions, and exclusions before the load, not after the loss. In general:

• Reefer spoilage is commonly excluded without a breakdown endorsement.
• Theft from an unattended truck may be limited or need specific security conditions.
• Restricted commodities such as electronics, tobacco, alcohol, or livestock are often limited, excluded, or need a scheduled endorsement.
• Freight in the wrong place, such as a terminal or warehouse, or on an unlisted unit.
• Delay and consequential loss, like missed delivery windows.
• Improper packing or shipper error.
• Your own equipment. That is physical damage or trailer interchange.

A single exclusion can decide a claim. See motor truck cargo for the product page.

What if I am leased onto a carrier, or I am a broker?

Leased onto a carrier. The carrier holds the authority, and the lease says what insurance it carries and who provides other coverage. Federal leasing rules require the lease to clearly specify the conditions under which deductions for cargo or property damage may be made from your settlements, and require the carrier to give you a written explanation and itemization before deducting (49 CFR 376.12(j)(3)). Read that clause before you sign. For a related coverage, see bobtail vs non-trucking liability.

Broker. A broker does not haul the freight, so cargo coverage is generally your carriers' job. Some brokers look at contingent cargo coverage, which is a separate product. Our insurance hub lists the lines we cover.

What should I do before I haul my first load?

1. Read the broker or shipper agreement for any cargo limit, certificate, and liability terms.
2. Write down the highest-value load you expect to haul, and the commodities.
3. Check the policy's exclusions against those commodities and how you operate.
4. Ask for a certificate with the right holder and limit.
5. Keep records of pickup condition, seals, and delivery. The bill of lading is the receipt for the freight, and claims turn on what it and your records show.
6. If a claim comes, the claimant files it in writing with enough facts to identify the shipment, asserting liability and stating a specific or determinable amount (49 CFR 370.3). Tell your insurer promptly, and read your policy before you agree to pay anything.

If you are new, see how to get trucking authority and what insurance a new trucking company needs.