Motor Truck Cargo Insurance

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What Motor Truck Cargo Insurance is All About:

The demand for long-haul freight has increased in the past several decades. Similarly, the value of large cargo loads has grown along with the increase in shipping demands. Motor Truck Cargo Insurance is designed to ensure the value of heavy freight loads as they work their way from point A to point B. This means a truck carrying anything from snack cakes to lumber is precious during the time it’s fully loaded and transporting those goods. This insurance is designed to cover the liability concerns related to hauling thousands of pounds of goods and materials worth tens of thousands, and sometimes millions of dollars.

When trucks get stolen, thieves typically are not trying to take the truck itself, but the valuable cargo inside. Given the significant value involved with every truckload, most trucking companies and individual truck drivers recognize the importance of protecting those assets. According to the FreightWatch Annual Cargo Theft Report, the average cost of a stolen truck was over $230,000 in 2014. This means that should anything else happen to that truck (fire, highway accidents, etc.), the company that owns the goods inside the truck (typically not the company or individual driving the haul) will suffer a significant loss if the cargo is somehow stolen, damaged or even destroyed. Motor Truck Cargo Insurance protects the driver or the driver’s company from liability when these issues occur.

This liability insurance often has a deductible. A policyholder’s premiums will in part be determined by how much they are willing to pay out of pocket, while the insurance company will pay the rest.

Who Needs It?

For-hire truck drivers are highly encouraged, and at times required, to carry this type of insurance. This is because a for-hire truck driver typically owns his or her truck, and provides services to a trucking company or another company that requires freight. Many for-hire truck drivers operate their own vehicles, while some own a small fleet of trucks operated by other drivers. In the case where a trucking company owns the vehicles, Motor Truck Cargo Insurance is still necessary. However, the company may choose to purchase this insurance for its entire fleet. The owner of the company is then responsible for the policy on every truck in the fleet.

Any trucker or trucking company that carries products, goods or materials for others should consider owning this type of insurance. Given the high value of most freight, choosing not to purchase this type of insurance is extremely risky, especially during the winter. Long-haul freight also increases the risk of an accident happening to the cargo during transport.

Those who transport hazardous materials of various kinds may be required to purchase this type of insurance. That requirement will come from federal government regulations and some state-level regulations.

What is Covered?

This type of insurance covers most, but not all types of freight. At a basic level, this insurance protects trucking companies from having to directly pay the owners of the cargo if that cargo is lost or stolen in transit. However, there are other concerns related to the transportation of products and goods that make this insurance a necessity. If a truck overturns and spills its cargo on the road, the for-hire truck driver, or trucking company, may be responsible for paying the cost of cleanup. The costs for this can get extremely high if there is an environmental impact due to the materials that were held in the cargo.

What Isn’t Covered?

Motor Truck Cargo Insurance has several limitations. Most importantly, there are certain types of loads that are not covered under this policy. Live animals, jewelry, expensive paintings and some forms of chemical compounds are not covered. This is due to the increased risks that are involved with those loads. Additionally, any vehicles that carry passengers will not be covered under this insurance policy.

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Are There Any Add-ons?

Some add-ons exist for Motor Truck Cargo Insurance. Truck drivers who carry dangerous or hazardous materials can purchase additional liability coverage. Truckers that operate refrigerated trailers and perishable transport goods may also need additional coverage options.

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