While all motor carriers must carry a limited amount of liability insurance, this is only the basic requirement and it offers no protection for the goods you carry. You need to carry cargo insurance to guard against financial loss from damage to your cargo while in transit or storage. The Federal Motor Carrier Safety Administration (FMCSA) requires truckers who transport household goods and freight forwarders of household goods to carry at least a minimum amount of cargo insurance in case the load becomes damaged or destroyed due to situations beyond the trucker’s control.
How does truck cargo insurance work?
When you work as a for-hire commercial truck driver, cargo insurance provides reimbursement for your load damaged by fire, theft, severe weather, collision with another vehicle, or another vehicle striking your load. Depending on your policy limits, it might provide you with enough cash to replace what you lost due to these and similar circumstances.
Another important reason to carry cargo insurance is that it can pay for clean-up costs if you spill a load on a road or freeway. That means the insurance company can hire a team to clear away debris on the road. (However, it’s important to consider pollution insurance as well.)
Additionally, many cargo insurance policies include a provision that includes coverage to help you prevent a similar incident in the future. If someone sues you for loss of a load or for clean-up costs, your policy should cover at least some legal costs. You can also consider earned freight coverage.
Factors that determine how much cargo truck insurance you need.
When you purchase a cargo insurance policy, you need to select the maximum load amount that you would ever expect to transport. It is essential that you not under-insure your load based on weight or you may not be able to make a claim. You will also need to consider each company’s offer of insurance carefully as some may have exclusions for certain types of items you transport or weight limits.
Review the bill of lading, contracts, and tariffs carefully before entering into an agreement with a customer to deliver goods. These documents outline which party has responsibility for specific tasks. It is also a good idea to periodically review your cargo insurance policy to make sure that it continues to meet your needs.
If your loads tend to get heavier and your average number of miles traveled increases, you will want to consider increasing your insurance benefits for a larger premium. You should also keep in mind that no policy will pay for damages you caused yourself such as smoking near a load that catches on fire.
You can initially obtain your cargo insurance on a scheduled basis and adjust it to a blanket basis as your needs change. Rates for the latter depends on your annual gross revenues and can also adjust accordingly.
Get cargo insurance quotes and select your coverage today.
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