1. What General Cargo Insurance Covers:
-Damage During Transit: Most general cargo insurance policies cover damage to the vehicle that occurs during transit. This can include damage from accidents, loading and unloading, and some unforeseen incidents.
-Theft: If the vehicle is stolen during transport, general cargo insurance typically covers the loss.
-Fire and Natural Disasters: Coverage usually includes damages caused by fire, floods, or other natural disasters while the vehicle is in transit.
-Vandalism: If the vehicle is vandalized during transport, it’s generally covered by the insurance.
2. What General Cargo Insurance Does Not Cover:
-Pre-existing Damage: Any damage that existed before the car was picked up for transport is not covered. This includes dents, scratches, or mechanical issues that were present before shipping.
-Personal Items: If personal belongings are left inside the vehicle during transport, they are typically not covered under general cargo insurance. Customers should be advised to remove all personal items before shipment.
-Acts of God: Some policies may exclude specific natural disasters or extreme weather events, often referred to as “Acts of God.” ie: hail, a rock being kicked up on the road.
-Mechanical Issues: Insurance usually doesn’t cover mechanical failures or malfunctions that occur during transit unless they are directly caused by an accident or covered event.
Undeclared Modifications: If the vehicle has custom modifications that were not declared to the insurance company, these may not be covered.
3. The Importance of Understanding Coverage:
-Verify Insurance Details: Customers should always verify the specifics of the carrier’s insurance policy before shipping their vehicle. Understanding what is covered and what isn’t can help avoid surprises if a claim needs to be made.
-Consider Additional Insurance: In some cases, customers may want to purchase additional coverage, especially if they are transporting a high-value or classic car.
Transparency and Communication: Stress the importance of clear communication between the broker, carrier, and customer regarding what is and isn’t covered by insurance. This ensures all parties have realistic expectations and reduces the likelihood of disputes.
This structure should help your customers understand the complexities of cargo insurance in auto transport and make informed decisions.
At Simple Car Shipping, we only work with carriers that can provide a minimum cargo coverage of up to $100,000, unless specified otherwise. Verifying this insurance is always a part of the process before contracting any carrier. Make sure any broker you choose to work with is doing their diligence, and making sure your vehicle has the proper coverage for the shipment.
Looking for more information on this subject, please check out some of these references:
FMCSA (Federal Motor Carrier Safety Administration):
- The FMCSA regulates the transport industry and provides guidelines on insurance requirements for carriers. They offer insights into what must be covered under federal regulations.
- FMCSA Insurance Requirements
National Association of Insurance Commissioners (NAIC):
- NAIC provides resources on different types of insurance, including cargo insurance. Their guidelines can help clarify what is generally covered.
- NAIC Guide on Cargo Insurance
eShip Transport:
- eShip provides clear explanations of what is included in their cargo insurance policies, including limitations and exclusions.
- eShip Auto Transport Insurance Coverage
Author: Drew Levine owner of Simple Car Shipping