Car Shipping Insurance

Verifying the facts about your auto transport company’s car shipping insurance is essential to assure that your vehicle is adequately covered during transport. Unfortunately, many auto shipping companies have deceptive practices when it comes to advertising their insurance coverage. Understanding the applicable federal requirements and how they fall short is the only way to protect oneself as a consumer shipping a car or other vehicle.

All auto transport services are required to carry cargo insurance, most of which will meet a minimum of $150,000. This minimum applies to the total sum of damage caused to the vehicle’s cargo. This proves problematic when the total value of the transport vehicle’s cargo exceeds $150,000. If, in a disastrous event, every car transported on a vehicle is damaged or totaled, insurance will not cover any damage that exceeds the $150,000 limit. Thus, it is important to estimate the value of your car or truck to determine if additional insurance is necessary for full car shipping insurance coverage.

Be Wary of False Facts

Many auto transport companies may claim that all vehicles are fully covered under their insurance policy. Unless the business has a different type of insurance policy besides the standard cargo insurance policy, this claim can be difficult to verify. Even auto shippers with $300,000 or $500,000 policies cannot claim full coverage for every vehicle.

Also, beware of hiring certain unscrupulous car shipping brokers. Brokers are not required to carry cargo insurance if they have no shipping trucks themselves. Often, this makes no difference, as the car haulers they hire do carry the federally mandated minimums. However, shady brokers may take less care in verifying that the transporters they hire carry insurance. If damage does occur to your vehicle during shipping, don’t expect that the broker will cover the costs if the transporter doesn’t have insurance - they will shirk the responsibility back onto the transporter. Always verify with the transporter directly that they have a current insurance policy; ask for a copy for your records.

Safety Precautions

Don’t put all your faith in the driver’s insurance. Call your own car insurance company to see what coverage options you have while your vehicle is being transported. Verify that your vehicle is covered in case of these events, which are more than likely not covered by the driver’s car shipping insurance:

• Natural disasters, such as hurricanes and tornadoes.
• Damage from the elements, such as hail storms, and other “acts of God.”
• Damage from road debris, such as flying rocks, dirt, and trash.

Generally, a cargo insurance policy will only cover your vehicle if it is damaged during loading or unloading, or if the driver is involved in an accident. Always pick a reputable, trustworthy car shipping company, and thoroughly investigate their insurance policy before allowing them to load your vehicle. Take advantage of online company reviews and user feedback. If the car you are shipping is particularly valuable, purchase additional insurance coverage and consider enclosed auto transport to protect it from the elements.