Motor Truck Cargo Coverage

Jun 12, 2024 | Business Insurance, Personal Insurance

If you move cargo and damage it, you may be accountable. Vehicle collisions, overturns, fire, and theft could ruin your cargo en route. A damaged or destroyed package can also harm your connection with clients. This is why you should insure your items. If your insurance is insufficient, your company may be obliged to pay for damages, especially if the cargo is valuable.

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What is Cargo Coverage for Motor Trucks?

Motor truck cargo coverage, a type of inland maritime insurance, protects products and property while a motor carrier transports them. It safeguards the client’s property’s value while it is in the freight carrier’s care. The Federal Motor Carrier Safety Administration (FMCSA) mandates Motor Truck Cargo Coverage for vehicles used in the transportation of home products (such as those used by moving companies), and businesses who move items with your company frequently demand that you have it. An employer who knows that allowing an employee to operate a vehicle poses a danger of harm to others and still permits it is engaging in “negligent entrustment” in commercial auto operations. Make sure you have the appropriate coverage for your company by speaking with your insurer.

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Which items are protected under motor truck cargo coverage?

“While in your care, motor truck cargo coverage protects the cargo you transport for clients. If cargo is harmed by one of the insured perils, your insurer will offer money to cover the loss, and your business could be held accountable. Typical insured risks include fire, crashes, water damage, failed refrigeration, and theft.. It’s vital to remember, though, that even damage caused by a covered risk does not apply to damage to your own vehicle, other cars, or any other property aside from cargo in transit.

Insurers often provide coverage for cargo for up to 72 hours, whether it is stored at a warehouse or under the supervision of connecting carriers. Additionally, Some insurance plans cover additional expenses that may arise due to the loss. Additionally, some insurance plans cover additional expenses that may arise due to the loss. , some insurance plans cover additional expenses that may arise due to the loss. Costs for cleaning up the wreckage or pollutants that an accident has discharged, taking precautions to protect the cargo from additional harm, and legal defence expenses could all fall under this category.

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What risks is Motor Truck Cargo Coverage designed to cover?

Both specified hazards and all-risks coverage options are available for motor truck cargo. All-risks or open hazards policies encompass all causes of loss, except for those that insurers expressly exclude. In contrast, specified perils insurance only covers the risks specifically mentioned in the policy. Because they offer more comprehensive coverage than named peril plans, all-risks premiums are often more expensive.

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Typical listed risks include:


Lightning \Explosion


Collision or flipped vehicle

Theft or a theft attempt


A result of an aero plane

Rioting or other unrest


Strong winds overturned a truck transporting colourful garden objects, ruining the delivery. Your insurer would pay for the damages.

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What does Motor Truck Cargo Coverage not cover?

The following situations are often not covered by motor truck cargo insurance:

  • Property that is destroyed or seized on a governmental authority’s command.  However, if a government body orders the destruction of the property to stop a fire from spreading, your insurer will pay for the loss if fire is a covered danger.
  • If fire is a covered peril, the policy covers loss or damage that fire directly causes in situations when a nuclear threat occurs.
  • Military conflict and action.
  • Loss or harm brought on by careless handling or poor packing.
  • Harm or loss brought on through indirect losses. Delays, bad economic circumstances, loss of use, or other indirect causes do not cover the arising losses.
  • Equipment failure in the refrigeration system. However, your insurance would cover it if a fire, explosion, vandalism, or auto accident, which are loss types your insurance covers, causes the refrigerated equipment to malfunction.
  • Behaviors those are dishonest, illegal, or careless.
  • Damage brought on by construction flaws or degradation. Corrosion, rust, and other forms of natural deterioration would not be considered covered damages.
  • Excessive humidity or temperature-related damage.
  • damage brought on by pests or insects.
  • loss of possessions if they were given up freely as a result of deception.

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Which items fall outside the scope of motor truck cargo coverage?

Motor truck cargo insurance may not cover certain categories of property. Perceived higher risk of theft, expense of replacement, or inherent risk factors often lead to the exclusion of items within these categories. Carriers that transport hazardous or very valuable cargo will need to supplement coverage by purchasing an insurance policy that covers those risks.

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Property of the following kind is often not covered:

  • Coins, currency, or stamps
  • Gold, precious metals, or precious stones are examples of jewelry.
  • Furs
  • live creatures
  • pieces of art
  • Contraband

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For specific types of cargo or loss causes, Motor Truck Cargo Coverage may give lower sublimit and a higher deductible than the insurance’s overall maximum. For instance, your policy might have a $300,000 overall limit and a $5,000 deductible, but a $50,000 sublimit and a $8,000 deductible for claims of theft. This is due to the fact that theft is thought to be prevented by the carrier, unlike the majority of other risks. Additionally, certain insurers may impose sublimit that limit the amount of coverage that is provided for specific types of cargo. A policy might, for instance, have a $1 million maximum total insurance limit but only pay $50,000 for claims involving electronics.

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The deductible for Motor Truck Cargo Coverage is there.

Similar to many insurance policies, your business typically needs to meet a deductible before your insurer begins covering losses or damages under Motor Truck Cargo Coverage. Because the amount the insurer would have to pay for an occurrence is higher with lower deductibles, premiums are higher.

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Does the Motor Truck Cargo Coverage involve coinsurance?

Policyholders often need to insure a minimum proportion of the cargo’s value to obtain full coverage for claims when purchasing Motor Truck Cargo Coverage. Moreover, this requirement, known as coinsurance, aims to discourage businesses from underinsuring their goods. The insurer will proportionally limit coverage if property is underinsured. When a freight carrier accepts ownership of the goods, they often note the value of the shipment on the bill of lading. Ensure that the valuation is correct and that the load is covered for its full worth.


However, the insurer of a shipping company demands a minimum coinsurance of 80%. 50% of the property’s value—or $500,000—is insured by the insurer for its freight. The policyholder experiences a $400 000 loss. Despite the fact that this is below the guaranteed sum, the insurer will only cover half of the damage, or $200,000.

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In summary, trucking companies should consider motor truck cargo coverage. There is always a risk that cargo may become lost or damaged during transportation. Motor Truck Cargo Coverage can financially protect your business if it could be held accountable for the loss. Clients that hire you to ship their goods frequently want this kind of coverage, and the FMCSA also mandates it for trucks used to move domestic items. You and your clients will feel more secure knowing that any losses incurred while the shipment is in transit if you invest in motor truck cargo coverage.

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