Motor Truck Cargo Insurance: Everything You Need to Know

Thang Truong
Thang Truong
Updated on:

You thought you had adequate insurance coverage for your trucking operation. However, your broker just told you that you are required to have motor truck cargo insurance. What is motor truck insurance, and why do you need it?

What is motor truck cargo insurance?

Cargo insurance is insurance coverage that protects the owner of the goods that are shipped as well as the driver and his company. The things you haul belong to someone other than you. That person will want assurance that their goods will be delivered in a timely manner in the condition you promised. 

All truckers must carry liability insurance coverages. Those liability coverages usually only cover damage caused to other people or property. It doesn’t cover the cargo being carried. Motor truck cargo insurance is additional insurance that you purchase to cover the items you are hauling. 

Cargo insurance was designed for the for-hire trucker. Its goal is to save you from overpaying your insurance premiums by covering specific shipments rather than offering blanket coverage.

What does motor truck cargo insurance cover? 

Your plan dictates the cover you have. Generally, your policy covers loss to cargo caused by fire, theft, water damage, vandalism, collisions, equipment failure, refrigeration breakdown, and other risks. Sometimes the coverage handles the cleanup of debris and pollutants after an accident. 

Motor cargo insurance can also cover lost wages that you or your customer experience. Cargo insurance bridges gaps left by primary liability insurance. Many things can go wrong with a shipment, and sometimes you don’t know anything is wrong until you make the delivery. If something goes wrong at any point in the delivery, motor truck cargo insurance can reimburse you for damages your contract says you’re liable for. 

Types of motor truck cargo insurance

Two main types of motor truck cargo insurance help standardize shipments between different states and even different countries. 

  • Land cargo: Provides protection for land transportation within the country’s boundaries. A land cargo policy covers theft, collision, load damage, and freight loss. This is a domestic policy, so it doesn’t cover shipments crossing the country’s borders. 
  • Marine cargo: Provides protection when goods are moved by air or sea. Bad weather, damages caused while loading or unloading, piracy, and other such risks are covered by a marine cargo policy. Marine cargo has three subcategories: specific cargo, contingency insurance, and open cargo coverage.

Who needs motor truck cargo insurance? 

Any long-haul trucker needs to invest in motor truck cargo insurance. It isn’t mandated by law, but some brokers, risk managers, and dump truck operations will require drivers to have motor truck cargo coverage. It’s recommended that the following vehicles have motor truck cargo insurance: 

Why do you need motor truck insurance? 

Your cargo has value both to you and your customer. When you take possession of the cargo, you become responsible for the property. Some cargo poses a theft risk, while other cargo is less likely to be stolen. You don’t want to cover the loss of freight to theft out of your own pocket. 

Other cargo is considered a pollution risk. If an accident or operator error causes you to lose part of that cargo, you could be paying a small fortune to clean up the mess. On top of that, you’ll also have to reimburse the customer for their loss. 

What is excluded from motor truck cargo insurance? 

Some things may not be covered under a motor truck cargo insurance policy. Each insurance company determines its own list of restrictions or exclusions, so you should check with your insurance agent to be sure if you have any policy exclusions to keep in mind. Standard exclusions or restrictions include: 

  • Contraband such as alcohol, tobacco, or pharmaceuticals
  • Live animals or livestock
  • Art, money, jewelry, or paper
  • Property or goods owned by the insured person
  • Radioactive or explosive materials

How much does motor truck cargo insurance cost?

The average cost of motor truck cargo insurance is $100 per month, or $1,200 per year. Most truck owner operators or for-hire truckers pay between $35 to $150 per month. It is a wide range since motor cargo truck insurance depends on several factors.

One of the most important, if not the most important, factors in your motor truck cargo insurance coverage is the kind of materials you carry. Each different kind of cargo has a different risk. Each trucker routinely carries different cargo. Some of the cargo is more valuable than others, and some are more hazardous. 

Not all companies offer motor truck insurance coverage. Cost varies between insurers as well. A factor in the cost is the limits and deductibles you choose for your policy. Higher deductibles combined with lower limits can decrease the cost of your premiums. 

Please keep in mind that this is just the average. Your motor truck cargo insurance rates will be different, depending on several factors. Be sure to get online quotes from the top carriers such as Progressive, biBERK (owned by Geico’s Berkshire Hathaways), THREE (also owned by Geico’s Berkshire Hathaways) or work with a top broker like Simply Business, InsurePro, or to compare several quotes to find the cheapest one for you.

Learn more about motor truck cargo insurance cost here.

Best motor truck cargo insurance companies

When you’ve done your research and are ready to purchase your motor cargo insurance coverage, you should begin by comparing coverages between multiple companies. Some companies don’t offer motor cargo insurance coverage at all. Others only provide coverages for specific cargoes. Below are our recommendations of the best providers of motor cargo truck insurance for your consideration:

  • Progressive: Best Overall
  • biBERK: Best for low-cost coverage
  • Simply Business: Best for comparing several quotes to find the cheapest policy
  • InsurePro: Best for part-time truckers
  • Best if you prefer working with a knowledgeable agent

When choosing motor cargo insurance coverage, speak to the agent who handles your commercial trucking insurance policy. You want to deal with an agent who knows your business and the risks associated with it. If your agent doesn’t handle motor cargo insurance, compare the rates of companies that do. The easiest way to do that is to request quotes from an online insurance broker such as CoverWallet or 

The Takeaway

Any trucker who hauls cargo should consider motor truck cargo insurance coverage. It bridges the gaps that your standard liability insurance doesn’t cover. The cost of motor truck cargo insurance varies depending on the cargo you need, where you deliver the load and the kind of policy you have. For the best rates, it’s a good idea to shop for the best coverage by comparing what various agents can offer. 

Motor truck cargo insurance covers the things you haul rather than covering your truck or your person. These policies cover damages or loss of your cargo and could cover lost wages for you and your customer due to cargo losses.

Thang Truong
Thang Truong

Thang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

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