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How Much Cargo Insurance Do I Need?

Since trucks carry a wide variety of cargo throughout their journeys, it’s hard to figure out how much coverage they’ll need. If you’re a trucker, keep in mind that the amount and value of your cargo changes pretty frequently. That’s why it’s important to invest in a quality cargo insurance policy that fits your needs.

What Are the Requirements of Cargo Insurance?

It’s worth mentioning that cargo insurers provide compensation for the load that’s lost or damaged in transit due to reasons like wind, hail, fire, theft, collision, and more. You need this type of insurance legally for some specific cargo.

For instance, the maximum federal requirement for cargo insurance is typically $5,000. However, some brokers or shippers will require you to have up to $100,000 in cargo insurance.

Moreover, it’s essential to consider the type of cargo you carry before you add cargo insurance to your policy. Therefore, it’s important to speak with an insurance agent who specializes in trucking so they can assist you.

Materials that are hazardous or heavy tend to have higher liability coverage limits compared to others. In fact, most truckers transporting hazardous materials, such as oil, are legally required to have commercial trucking liability insurance between $1 to $5 million.

Every state has different requirements when it comes to cargo coverage. That means whether you run a trucking company or work as an independent operator, checking your state’s requirements regarding cargo transport is crucial.

Different Types of Cargo Insurance

Typically, you have 3 types of cargo insurance policies you can choose from. Often times people want different policies depending on the situation and the type of cargo.

  • Contingency Insurance Policy– a client purchases and carries this policy rather than the seller. This may cause issues if the client refuses to accept the load that’s damaged or they don’t carry coverage.
  • Open Cover Cargo Insurance– It covers the listed perils except the ones specifically listed in the exclusion.
  •  Specific Cargo Insurance Policy– This covers a certain shipment of cargo. For instance, if a client purchases clothing they may want a policy just for that specific shipment.

Cargo Exclusions

There’s types of cargo that have limited coverage or they’re excluded from most insurance policies. Some common exclusions are:

  • Driver’s personal items
  • Radioactive and explosive cargo
  • Shipping containers
  • Paper or money
  • Jewelry and art
  • Alcohol, prescription medication, contraband, and tobacco
  • Live animals

Summing Up

All in all, it’s wise to consult with an insurance consultant who specializes in trucking before you buy cargo insurance. Also, make sure to check with your state for the requirements to invest in the policy that suits your needs the best.


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