Motor truck cargo insurance provides financial coverage to individual truck drivers or freight companies. It includes liability for damaged goods and physical loss to the truck. Motor truck cargo insurance also covers any direct physical damage that happens during the process of loading, unloading, and when the truck is in transit.
Some insurance companies even offer financial support while the vehicle is at a terminal, waiting for goods distribution. Other companies offer customized policies that will extend the insurance coverage to any physical loss that happens during unexpected waiting times. For instance, spoilage is caused by high temperatures or faults in the cooling system while waiting on docks. 
All of the different coverage packages of motor truck cargo insurance depend on different companies and their policies. This is why understanding risks covered by insurance and different types of policies is crucial.
How Does Truck Cargo Insurance Work?
Motor truck cargo insurance comes under the category of automotive insurance. Some freight businesses hire individual truck drivers to work for them. These drivers are entirely or partially compensated by the company’s insurance policy. It means that the driver will not be liable for any damage considering that the accident or any kind of damage was not their fault.
This policy can only be used for business purposes. The trucking company applying for truck cargo insurance will prove their driving records as it will be the deciding element in monthly payments of the insurance and the total amount of the insurance policy.
Nationwide, Progressive, NITIC, and Statefarm are some of the leading names in motor truck cargo insurance compies. All of them offer great financial strength and have excellent customer representation.
Here are the kinds of businesses that can take advantage of motor truck cargo insurance:
- Freight Companies: These are the large companies that own a fleet of trucks. They hire truck drivers and fleet managers to work for them. These companies will be responsible for the application of motor truck cargo insurance.
- Individual Owners: The company that is owned by some individuals comes in this category. The individuals may have their trucks and be responsible for the insurance. In many cases, they rent trucks from motor carriers who have already insured their trucks.
- Private Drivers: These are the truck drivers who work for different companies to transport goods using their vehicles. Some companies will compensate for their insurance needs or ask them to buy their package.
Types of Motor Truck Insurance
There are several different kinds of motor truck cargo insurance packages depending on the carrier’s needs. The selection of these types also relies on the size of truck or freight companies. Private drivers and individual owner companies working under a large freight company will take partial benefits from them. While freight companies have their own policy crafted by reputable insurance organizations.
In order to decide which policy is best for your business, hire an expert advising team with experience in insurance. It will be beneficial in the long term as the advisory team will be able to craft a custom insurance policy that best suit your company’s needs.
Motor truck cargo liability is also one of the types of truck insurance, but it mainly covers the damage to transported goods and the truck itself. Here are some of the common types of motor truck insurance:
General liability
This type of motor truck cargo insurance will cover damages and body injuries of a third party, but it is not related to the truck. If during a truck accident any damage happens to a third party, it will not be covered in this insurance. It is made mandatory by federal law for truck owners and freight companies to have general liability insurance. Individual drivers working under a company do not need to take out this insurance because they are compensated by their company.
Truck Liability Insurance
Truck liability insurance will pay for property damage or bodily injuries caused by the truck. FMCSA requires a minimum of $750,000 insurance packages from freight companies operating trucks in different states.
Non-Truck Liability Insurance
This is a kind of insurance that covers property damages and bodily injuries to third parties caused by a moving truck while outside of work. Any accident that happens when the truck driver is not completing their work hours will come under this category. The insurance policy of the company will not cover this kind of damage which is why drivers need to apply for this policy.
General and Specific Risk Coverage
Most motor truck cargo insurance companies will provide policies to car hauling trucks, dry freight carriers, dumping trucks, and refrigerated food carrier trucks. They have packages for both interstate and intrastate trucks.
The risk coverage of motor truck cargo insurance has many options. It can cover small risks and all kinds of hazards. All hazard coverage will provide complete compensation for damage caused by the reasons stated in the policy. But the specific risk insurance policy will only cover some specific damages; for instance breakdown of the cooling system in the food truck will be a particular risk.
General risks included in the policy include:
- Vandalism
- Political Unrest
- Storm
- Fire
- Lighting
- Road accident with another vehicle
Who Should Take Motor Truck Cargo Insurance?
According to federal law, commercial trucks are required to take an insurance policy to cover any accidents or collisions. The laws are even more strict for the trucks which move between different states. The trucks which can take motor truck cargo insurance are:
- Hauling carriers
- Cargo trucks
- Flatbed trucks
- Box trucks
- Garbage trucks
Most garbage trucks are required by law to have an insurance policy, but they are still urged by risk management companies to sign up for some kind of motor truck cargo insurance. It is better to opt for an insurance policy that safeguards the vehicle and the goods it is transporting.
What Is Not Covered by Insurance?
Here is a list of materials:
- Explosive material
- Work of art and jewelry
- Personal property
- pets/ living organisms
- Drugs or alcohol
- Shipment goods packaging
- Owned goods
These are the kind of things that will not be covered by motor truck cargo insurance companies because they are not a part of the cargo itself or the transporting truck.
All in All
The most important thing to consider while selecting an insurance policy for motor truck cargo is the value it provides. It must cover general risks and some specific risks. If it covers a very low amount of damage, it will be a disadvantage for your freight business. It is better to hire an insurance advisor to work through different policies and select the best one for your business.
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