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What Is Motor Truck Cargo Insurance?

Motor truck cargo insurance is a type of insurance that helps protect the equipment and cargo inside of a truck. This insurance can help cover losses that may occur from accidents or thefts. 

Cargo truck insurance can cover various types of equipment including trailers, cargo damaged in transport or spoiled items from faulty refrigerated trucks. Types of insurance coverage available provided by motor truck cargo insurance can include liability insurance, physical damage coverage and property insurance.

How Does Motor Truck Cargo Insurance Work?

When transporting freight, you never want to think of the possibility of the load being stolen or damaged in an accident. However, those risks are always a possibility, and that’s where motor truck cargo insurance comes in. Whether cargo is damaged, destroyed or stolen, motor truck cargo insurance protects you and your company. 

Cargo insurance protects you from having to bear the cost of repaying for the full value of the goods lost or damaged. Just like other forms of insurance, if a loss occurs you’ll pay a deductible to cover the damage. The coverage you select should be based on the value of the goods you transport because, without enough coverage, you’ll have to pay any remaining value of the goods above your insurance coverage.

What is Cargo Liability Coverage?

Liability insurance covers costs that may be associated with injuries and property damage resulting from an accident involving your truck or the trailer attached to your truck. It covers the property that you are transporting via motor carriers. Without the coverage, shipping companies will often not work with your transportation company because it leaves them in a vulnerable position if anything should happen to their property in transit. 

Your insurance premiums vary based on the value and the types of property that you transport. Another factor impacting your total insurance cost will be how far you transport the goods. Motor carrier cargo liability coverage is not a replacement for auto liability coverage, which provides liability insurance for your trucks and bodily injury for your drivers or others on the road that they might injure. If you’re transporting goods, you’ll need both auto liability coverage and cargo liability coverage.

Why is Cargo Insurance Needed?

Just as things can happen to a driver, accidents can happen to cargo that can be fragile, heat sensitive, or have other special needs. As a transportation company, you assume liability for the goods you transport for the duration they are under your care. This kind of insurance protects you from the unknown because just one damaged or stolen shipment can impose a large financial burden that could put your company in the red.

Cargo insurance is often a requirement for shippers to work with you as well. To earn customers, you’ll need to have this type of insurance coverage.  

What Are the Requirements for Cargo Insurance?

The Federal Motor Carrier Safety Administration (FMCSA) requires that all household goods motor carriers and freight forwarders carry minimum cargo insurance of $5,000 per vehicle and $10,000 per occurrence.

Is There a Deductible for Motor Truck Cargo Insurance?

As with all insurance policies, motor truck cargo insurance has deductibles that you must pay before the insurance company will pay for the damage to the goods you were carrying. To lower your insurance rates, you can increase the deductible you pay. Just be sure that you can pay that deductible in the event that something happens to your cargo. 

How Is Cargo Insurance Cost Calculated?

Insurance companies calculate cargo insurance based on the value of the goods that you carry and how far you carry them. Two other factors that could impact your insurance premiums include your loss history and your freight classification. 

What Does Motor Truck Cargo Insurance Cover?

Motor truck cargo insurance covers the goods you’re transporting. Here are some of the areas of coverage you can select as part of a motor truck cargo insurance policy.

  • Cargo coverage to replace the value of the cargo under your care
  • Freight income coverage for lost payments when you can’t complete a job
  • Debris removal, traffic control, security, towing, reloading
  • Fire department surcharge in case of a fire
  • Reward coverage for offering a monetary award to individuals who provide information that leads to the arrest or conviction of a person responsible for the loss of goods in transportation
  • Loss data preparation coverage to cover costs when gathering information on inventory, and appraisals to determine a covered loss

What is Not Covered Under Cargo Insurance?

Motor truck cargo insurance excludes several types of cargo, including those with high values or products that could be dangerous. Examples of some of these excluded properties include the following. 

  • Animals 
  • Contraband 
  • Furs 
  • Gold, precious metals or stones
  • Jewelry
  • Money, coins or stamps
  • Works of art

What Risks Does Motor Truck Cargo Insurance Cover?

Reference your specific insurance plan or talk to your insurance agent for information about your specific insurance coverage. Commonly covered risks include the following, though your plan could be different so be sure to familiarize yourself with your policy. 

  • Attempted theft
  • Theft
  • Damage to goods from a collision 
  • Damage from aircraft
  • Explosion
  • Fire
  • Lightning
  • Overturned auto
  • Riot
  • Vandalism
  • Windstorm

Excluded From the Coverage:

  • Property that governmental authorities seize or destroy
  • Nuclear hazards
  • War and military action
  • Damage to goods or loss of goods from poor packing or handling
  • Indirect losses, such as delays, loss of use or unfavorable economic conditions
  • Breakdown of refrigeration equipment not related to a covered loss scenario
  • Acts that are criminal, dishonest or negligent
  • Damage to goods from defective property or deterioration 
  • Damage from extreme temperatures or moisture
  • Insect or vermin damage
  • Voluntary surrender of the goods, such as in the case of fraud

Motor Truck Cargo Insurance vs. Motor Truck General Liability Insurance

Motor truck cargo insurance and motor truck general liability insurance are two different types of policies. With motor truck cargo insurance you protect the goods that you are transporting while motor truck general liability insurance provides coverage for your trucks and any bodily injury that you might sustain in the event of an accident. To protect your company from liability, you should carry both types of insurance.

Factors to Consider With Cargo Insurance

All insurance policies are not created equal. Learn about important factors for getting the best coverage at an affordable rate.


Your insurance policy will outline the specific value of goods that it covers. Without adequate coverage, you could have to make up the difference between the actual value of the goods you are transporting and the allowable value in your insurance policy. 

For example, if the value of the goods in your truck at the time of a collision is $150,000 and you only have $100,000 in cargo insurance, you’ll need to pay the shipper the $50,000 difference out of your own pocket, which could create cash flow problems and enormous impacts to your bottom line. 


Liability for cargo in transit is complicated because the cargo will likely trade hands several times before reaching the end-user or consumer. Who is responsible for the cargo as it is unloaded from a ship onto your truck? And who is responsible when the goods are being offloaded from your truck to the warehouse?

Before finalizing your insurance purchase, review these factors with your insurance agent or underwriter so you have a clear idea of your liability in all situations.


As you review the types of cargo insurance and coverage options available, make sure you select the right options based on the cargo you transport and how you transport the cargo. Failing to include certain types of coverage will mean you’re left paying out on losses.


Review your cargo insurance cost and weigh it against the risks of not carrying coverage. The goal is to get the right amount of coverage without overpaying for insurance you don’t need.

Ultimately, insurance is only helpful if it isn’t harming your bottom line too much while still providing the protection you need from huge losses. 

Ensure Your Peace of Mind 

It is important to protect the value of your equipment and property in the event of an accident or theft. When a truck is involved in an accident without the right insurance in place, it could end up costing the driver thousands of dollars in repairs or damages to the vehicle itself. By purchasing motor truck cargo insurance, you can protect yourself from the financial impact of these accidents and ensure peace of mind while you are on the road.


Is motor truck cargo insurance the same as physical damage?

No, motor vehicle insurance is needed in addition to physical damage to protect your truck and trailer.

Who needs cargo insurance?

Anyone who hauls freight should have cargo insurance.

Is cargo insurance worth it?

If you are running a trucking company, you are required to have cargo insurance. Not having cargo insurance could shutter your business if you lose or damage something with a high-enough value.

What is included in cargo insurance?

Cargo insurance protects your transportation business from financial losses due to damage or theft of the goods you’re transporting. You’ll need to talk to your insurance agent about the specifics of what’s included and excluded in your specific policy.

Does cargo insurance cover the trailer?

No, cargo insurance only covers the contents of your vehicle and not the vehicle itself. You’ll need a separate policy that covers your tractor and trailer.

Is freight covered in cargo insurance?

Cargo insurance provides coverage for your freight up to the limit outlined in your policy. Review your policy limits with your insurance agent regularly to ensure you have adequate coverage based on the value of the goods you transport.

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