Car Shipping Insurance Coverage

When having your car shipped you should always be concerned about insurance coverage. While majority of cars move without incident, the possibility that your car may sustain unforeseen damage exists.

The type of coverage you need to be concerned with depends on what car you are shipping, some policies will exclude antiques and exotics, while other policies may not have enough coverage for new cars. Virtually all companies will tell you that your car is insured, however coverage always varies and your car may not be protected.

An insurance policy that covers any and all damages simply does not exists, be especially cautious if someone tells you that your vehicle is 100% fully insured against all damages.

Insurance Basics

All auto transporters and trucking companies are legally required to carry liability insurance in case of an accident in which they are at fault. This can be verified with Department of Transportation. However cargo coverage requirements are not enforced by any government agencies and is the sole responsibility of the shipper, you or your broker, to verify. Cargo coverage is intended to protect the commodities that are being transported by the carrier.

In case of car-haulers this may be up to 10 individual cars. If shipping a car that is worth more than $15,000 always ask for a certificate of insurance. The certificate will tell you what the policy limits are and who the underwriting insurance company is. The certificate will not tell you specific terms of the policy, those you will have to get from the insurance agent.

Insurance Limits

Most carriers purchase just the minimum amount of insurance required, to save money. This may fall short of the true value of the cars that they are shipping. A typical auto transporter will purchase $250,000 coverage, which comes out to about $25,000 per car. If shipping a car that is worth more than that it is in your best interest to look for a carrier with greater coverage. This becomes a big concern if all of the vehicle are damaged in a major collision or even a fire.

It is also important to realize that insurance companies will not cover some damages and will have all sort of limitation, it may even surprise you to what extend this is, for example:

• Acts of God (Flood, Hail, Earthquake, Tornadoes … )
• Acts of Terrorism
• Glass Damage
• Rock Chips
• Employee Theft
• Negligence

Insurance polices in general are very complicated with careful wording that often requires law experience for full understanding. Read more about common insurance policy exclusions.

Filling a Claim

Insurance companies require detailed documentation when filing a claim. The shipping documents such as the bill-of-lading must indicate the condition of the vehicle and damage done to it. It’s standard procedure for the shipping broker to assist their customers in the claims process. Some auto transport companies, including RCG Logistics, carry additional insurance to further protect their customers from financial risks. Contingency cargo insurance, offered by car shipping logistics companies, supplement the primary cargo insurance to provide additional protection.

Do you have a personal experience with insurance companies that didn’t go the way you expected it ?  Make a comment below.