What Does Motor Truck Cargo Insurance Cover?

Thang Truong
Thang Truong
Updated on:

When you operate a trucking business, your truck is more than a means to an end. It’s your home away from home, your livelihood on wheels. It stands to reason that you would want to protect that home and livelihood to the best of your ability. 

You likely know about the insurance coverages that are similar to those of your private automobile insurance coverages. Physical damage and liability insurance are standard for all vehicles regardless of size. However, there are some coverages that are specific to the trucking industry that you should be familiar with if you plan to continue in the trucking industry. 

One such specialized insurance coverage is motor truck cargo insurance. If you don’t know what motor truck cargo insurance is, or if you are uncertain if you need it or not, this article is for you. 

What is motor truck cargo insurance?

When you haul cargo for other people, there are times when mishaps occur, and products can get lost or damaged. When that happens, what do you do? Motor truck cargo insurance, also known as cargo insurance, is a form of insurance that helps cover the carrier for the liability associated with damage, destruction, or theft of the customer’s items. 

There are several motor truck cargo insurance forms, so it’s essential that you carefully choose your insurance carrier’s cargo coverage. Some insurance companies provide additional coverages along with their motor truck cargo insurance. For example, if you have a covered loss, but you can’t collect the freight charges associated with that load, some insurance companies will cover those freight charges. For detailed information regarding your cargo policy coverages, talk to your insurance agent. 

Who needs motor truck cargo insurance? 

Cargo insurance is an essential tool for anyone who transports goods. While carrying cargo, truck drivers operate under what is known as a Bill of Lading. That Bill of Lading is in effect from the moment freight is loaded into the truck until it is signed for at the final destination. While in transit, it’s the trucker’s responsibility to ensure the safety of the cargo. 

Motor truck cargo insurance coverage is designed to cover specific shipments rather than acting as continuous liability coverage. It is essential coverage for those truckers who operate in a for-hire capacity. Truckers who make either local runs or long-haul trips can benefit from cargo insurance coverage. 

What does motor truck cargo insurance cover?

The coverage associated with motor truck cargo insurance varies depending on your policy and a few other things. Typically, motor truck cargo insurance covers risks associated with cargo. Those can be losses due to collision, theft, fire, water damage, refrigeration breakdown, or equipment failure. 

Often, cargo insurance is sold for specific shipments rather than for long-term needs. Truckers tend to change what they haul with each run, so their coverage needs differ. It makes sense that the insurance coverage changes with each run. 

What is the difference between motor truck cargo insurance and trucking general liability insurance? 

Trucking general liability insurance covers bodily injuries and property damage caused by you or your drivers over the course of doing business. It can be caused by something the driver does on someone else’s property—a loading dock, for example. It can even be caused by incorrectly delivering something. All truckers can benefit from having trucking general liability insurance. Learn more at the best trucking general liability insurance companies

Motor truck cargo insurance, though, covers the goods that are being hauled by the trucker. If the cargo is damaged, motor truck cargo insurance covers the damages. Cargo insurance provides coverage in the case of an accident or equipment failure. Motor truck cargo insurance coverage varies by provider and often has add-on protections that can be added to the basic policies. 

Is motor truck cargo insurance expensive?

Cargo insurance rates vary depending on the cargo and the limits you have on your policy. The average cost of cargo insurance ranges between $400 and $1,800 yearly. Standalone cargo insurance ranges between $35 and $150 per month. 

These are just the averages. Be sure to shop around with a few companies or work with broker or agency like Simply Business, commercialinsurance.net, or Smart Financial to compare several quotes before making your final decision.

Learn more at how much truck cargo insurance costs

How do companies calculate cargo insurance rates? 

Cargo insurance policies aren’t bargain-basement cheap. So, how do companies determine the rates for these policies? The three most significant factors in the decision are the following: 

  1. The material being transported — Hazardous chemicals will be more expensive than something like plastic garden ornaments. 
  2. The limits of your policy — The most common cargo policy limit is $100,000. Those limits can increase depending on the cargo. Some truckers require limits of up to $1 million. 
  3. Your history regarding losses — If you have a history of losses, you can expect higher insurance rates.

These factors help determine how much your premiums will be for motor cargo insurance. Individual companies may look at other factors, but these three are the most basic considerations across the board. 

Best motor truck cargo insurance companies

Many insurance companies offer truck cargo insurance companies nowadays. That can make the task of finding the best companies for your trucking business. We have done the research and here are our picks of the best cargo truck insurance companies.

  • Simply Business: Best for comparing quotes from multiple providers
  • Progressive: Best for discounted coverage
  • Sentry: Best for personalized service 
  • Great American Insurance Group: Best truck insurance specialist
  • NITIC: Best for affordable motor truck cargo coverage

Final thoughts

Motor truck cargo insurance is sometimes called cargo insurance. These policies are designed to protect truckers from costs incurred by losses or damage to the cargo they are transporting. These losses can occur due to accident, theft, fire, or a natural disaster. 

Motor cargo insurance is not a one-size-fits-all kind of insurance policy. Different companies offer different coverages or add-on coverages in an attempt to give you the best insurance coverage possible at the best prices. Coverages depend on the kind of cargo being transported as well as limits assessed by your insurer. 

Hazardous or heavy cargo will have a higher cost with motor cargo insurance as it has a greater risk overall. Prices range between $400 and $1,800 yearly, dependent on the limits set by your insurance company. Each company sets its own rates and criteria for determining those rates. 

Any trucker who hauls cargo needs motor cargo insurance. Accidents happen on the road. Mishaps can cause damage or loss of the load that is being transported. For that reason, owner-operators need to have protection so that they are not held personally liable for the costs incurred by those mishaps.

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 realtor.com, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

More Stories

9 Best General Liability Insurance Companies for 2024

General liability insurance is probably the most popular business insurance that almost all businesses should have. It is required for some professions such as construction. The good news is that many insurance companies offer this product, so it is easy to find one that is the best for your business. In our intensive research, here […]

9 Best Commercial Auto Insurance Companies & Quotes in 2024

If you use your vehicles for work, you need to get a commercial auto insurance policy. Your personal auto insurance policy won’t cover the vehicles when you use for business. Commercial auto insurance is necessary when cars, trucks, or vans are used to conduct business. We cover everything you need to know about commercial auto […]

The 5 Best Business Owners Policy (BOP) Insurance for 2024

A Business Owner’s Policy (or BOP Insurance) is important to any small business to cover potential damages and losses when unexpected events happen. A BOP policy includes the coverages of general liability, commercial property, and business interruption in one master policy. If a small business can only afford one insurance policy, it should be a […]

11 Best Professional Liability Insurance Companies for 2024

If you’re a small business and in the market for professional liability insurance, below are 11 best companies offering this type of insurance for small businesses. In order to get an idea of the prices where online quotes were offered, we looked at a hypothetical accounting business in Wisconsin that had been in business for […]

Milepost Joins Truckstop: A New Dawn for Commercial Truck Insurance

The trucking industry is about to witness a significant shift in how insurance policies are procured, managed, and serviced. Milepost Insurance Agency LLC, a renowned Berkshire Hathaway enterprise, has recently collaborated with Truckstop, thereby pioneering a new era in trucking insurance for independent owner-operators. Revolutionizing the Insurance Experience The primary aim behind this dynamic partnership […]

Navigating Commercial Truck Insurance Premiums in 2023

Commercial truck insurance has become a focal point for many in the transportation sector as we delve deeper into 2023. With premiums seeing significant spikes in recent years, stakeholders are asking: Are we approaching a stabilization or even a decrease in these rates? Insights from industry experts provide clarity on this critical concern. Trends in […]

Regulatory Changes and Rising Commercial Truck Insurance Costs in California

In the wake of the passing of California’s AB5 bill, the trucking industry, including drivers and insurers, face unforeseen challenges. The legislation threatens to severely disrupt contractual trucking gigs, leading to rising insurance costs and potential operational changes. AB5 – A Potential Setback for Owner-Operators AB5, signed into law by Governor Gavin Newsom in 2019, […]

Finding Balance in Commercial Truck Insurance: Costs, Value, Services, and Long-Term Benefits

Navigating the maze of truck insurance offerings is not just a matter of finding the lowest price. It’s about understanding the nuances of what you’re buying, considering long-term benefits, and ensuring a harmonious relationship with your provider. This article offers a detailed examination of the process, unfolding the aspects of costs, value, services, honesty, and […]

New SEC Regulations on Cybersecurity and AI: A Comprehensive Overview

In an era where technology is at the forefront of business operations, the U.S. Securities and Exchange Commission (SEC) is taking decisive steps to ensure transparency and ethical practices. On Wednesday, the SEC was set to introduce new regulations that will impact publicly traded companies in two significant areas: cybersecurity and artificial intelligence (AI). These […]

6 Best Malpractice Insurance for Nurse Practitioners for 2023

Nurse practitioners have a great deal of responsibility when it comes to patient care. Many nurse practitioners assume that because they work under a doctor and their employer provides some level of malpractice insurance, they’re covered. It may be worth it to purchase your own policy, however. Employer malpractice insurance is to protect the employer, […]