Motor truck cargo

How does motor truck cargo coverage work for a trucking operation?

When you accept a load, you are responsible for it from pickup to delivery. If it is damaged, stolen, or lost in transit, the shipper or broker may hold you responsible for the loss. Motor truck cargo coverage is the policy that generally pays for covered losses to the goods, up to your cargo limit. It is the coverage brokers and shippers usually mean when they ask for "cargo insurance."

Cargo limits are per-vehicle or per-load amounts, and some policies add per-occurrence caps. Read how your limit applies, because a limit that is fine for one haul may be too low for another.

Federal rules. The federal cargo security requirement we found applies to household goods carriers: $5,000 for loss of or damage to household goods on any one motor vehicle, and $10,000 in aggregate for losses at one time and place. Household goods carriers file a cargo certificate (Form BMC-34) with FMCSA. The federal minimum financial responsibility rule for general freight carriers, 49 CFR 387.9, is about liability to the public, not cargo. That is why cargo limits for most freight carriers are driven by brokers, shippers, and contracts.

Many cargo policies also have a "reefer breakdown" endorsement, a "debris removal" provision, or sublimits that apply to certain goods. These are examples of terms to look for, not features every policy includes.

What does motor truck cargo cover, and what doesn't it?

Policies vary. Read your declarations, definitions, and exclusions. In general:

Often covered

• Loss of or damage to covered freight in your care, custody, or control during transit
• Named causes of loss, which can be listed (named perils) or broad (all risk with exclusions), depending on the policy
• Theft, fire, collision, and overturn, under many policies, subject to conditions

Often not covered, or covered only with conditions

• Temperature-controlled loads. Spoilage from a reefer unit failing is commonly excluded unless a reefer breakdown endorsement is added.
• Unattended vehicle theft. Many policies limit or exclude theft from a truck left unattended, or require specific security conditions.
• Commodity restrictions. Some goods, such as electronics, tobacco, alcohol, precious metals, and livestock, are often limited or excluded, or need a scheduled endorsement.
• Freight in the wrong place. Cargo held in a terminal or warehouse, or on an unlisted unit, may fall outside the coverage.
• Delay and consequential loss. Missed delivery windows and lost business are often excluded.
• Improper packing, inherent vice, or shipper error. Common exclusions.
• Your own equipment. That is physical damage or trailer interchange.

These are common patterns, not universal ones. A single exclusion can decide a claim, so read yours before the load, not after the loss.

What affects the cost of motor truck cargo coverage?

We don't publish prices. Cost is set by insurers and the licensed agents you work with. The factors that generally move it:

• Commodity. What you haul, and whether any of it is a restricted or high-value goods class
• Limit per load or per vehicle. The higher the limit you need, the more it can affect cost
• Radius and routes. How far you run, and through which areas
• Deductible. How much of each loss you carry yourself
• Equipment type. Dry van, reefer, flatbed, or other
• Claims history and experience. Your loss record and time under authority
• Endorsements. Reefer breakdown, additional insured status, and others
• Contract requirements. What a broker or shipper requires for limits and wording

Who typically needs motor truck cargo coverage?

• New authority: Brokers often ask for proof of cargo coverage before tendering a load. Have your limit and commodity answers ready before you start calling.
• Small fleets: Fleets often carry a cargo limit that fits the largest regular load. Ask how the limit applies per unit versus per occurrence.
• OTR and local haul: Long hauls and drop-and-hook operations add exposure when freight is left unattended. Read the unattended-vehicle conditions.
• Couriers: Parcels and expedited loads can be a restricted class. Ask what your policy says about the goods you carry.
• Brokers and dispatchers: Brokers don't haul freight, so cargo coverage is usually your carriers' job. Contingent cargo coverage is a separate product some brokers look at.
• Towing and repair: A towed vehicle is not cargo in most policies. See on-hook towing.