Cargo insurance is required if you haul and deliver goods for a living. How it works is that lost or damaged shipments will be compensated for but only up to your policy’s limit. As you can imagine, cargo insurance can get pretty expensive since many shipments are worth hundreds of thousands of dollars, if not more.
Shippers are very strict when it comes to truck drivers possessing the proper coverage. If you fail to meet the requirements you’ll be denied the load. As you can see, cargo insurance is no joke, and businesses are prioritizing the protection of their goods during transportation.
As you can expect, there’s no one-size-fits-all when it comes to cargo insurance. Every business is unique and your coverage should be tailored to meet your specific needs. So, without further ado, here’s the cost of cargo insurance and factors that can affect your rates.
Cargo Insurance Cost
Typically, the cost of cargo insurance ranges between $400 and $1,800 annually. It’s important to keep in mind that rates vary from one insurer to another. So, to get the most affordable insurance, it’s wise to shop around and gather multiple quotes from several companies.
Here’s a breakdown of the typical cost of cargo insurance depending on the limit chosen:
|Policy Limit||Standard Cost Per Year|
|50k||$400 to $700|
|100k||$800 to $1,400|
|250k||$1,100 to $1,800|
How Do Insurance Companies Calculate Cargo Insurance Rates?
Truck insurance is not cheap by any means. Cargo insurance is one of the most expensive coverage options besides liability insurance. Cargo theft is a growing pain and becoming a big problem around the country. Texas reports some of the highest numbers of cargo thefts along with Florida and California.
Here are some factors that an insurer will take into account when determining your rates:
- The type of goods you’re hauling (oil, gas, and hazardous materials will cost more to insure)
- Your location and hauling radius
- The limit you’ve chosen (the most common are 100k, however, some need 250k-300k or even a million)
- Your loss history
- How long you’ve been in business (experience and age)
- Your deductible
What Are Some of the Common Coverages Included in a Cargo Insurance Policy?
As mentioned earlier, one of the factors affecting the cost of your cargo insurance is the other various coverages you’ve opted for. We understand low-cost insurance policies may sound tempting; however, they could be missing some key coverages. Therefore, you need to assess the risks and be proactive when it comes to choosing a policy.
Here’s a rundown of the common coverages that may be included in your cargo insurance policy:
- Liability insurance: This kind of insurance covers any harm or loss your truck may cause to other motorists. Bodily injury liability and property damage liability are the two main categories of liability insurance, which are typically required by law.
- Physical damage insurance: This sort of insurance protects your truck, trailer, and other equipment from harm. This insurance is further subdivided into comprehensive coverage (for non-accident damages) and collision coverage (for damages caused by accidents).
- Bobtail insurance: This sort of insurance covers you when you’re operating a truck without a trailer.
- Non-trucking liability insurance: This sort of insurance covers you if you use your truck for non-business purposes, such as driving home after a shift and running personal errands.
- Occupational accident insurance: This sort of insurance covers work-related accidents and injuries not covered by workers’ compensation.
All in all, the cost of cargo insurance depends on many factors. If you have a fleet, make sure you have a good understanding of the various factors that affect your rates. Thus, the article explains everything you need to know about the cost of cargo insurance.
Additional Insurance Resources:
- For a trucking insurance quote, fill out our online form
- Information on general liability trucking insurance