Cargo insurance is one of the most misunderstood types of coverage in trucking. Many new carriers have it but don't know what it actually covers — or more importantly, what it doesn't cover. A cargo claim can cost you tens of thousands of dollars if you're not properly protected.
What is cargo insurance?
Cargo insurance (also called motor truck cargo insurance or inland marine cargo insurance) covers the freight you're hauling if it is lost, damaged, or destroyed while in your care, custody, or control. The FMCSA does not set a federal minimum for cargo insurance, but most freight brokers require $100,000 per occurrence minimum before they'll put freight on your truck.
How cargo insurance works
You pick up a load worth $85,000. During transit, you're involved in an accident and the freight is destroyed. Without cargo insurance, you are personally liable for the $85,000 value of the freight under the Carmack Amendment. With $100,000 in cargo coverage, your insurer pays the claim (minus your deductible).
What cargo insurance typically covers
- Freight damaged in a collision or rollover
- Fire or explosion damage to the cargo
- Theft of the entire load from a secured location
- Water damage from weather events
- Refrigeration breakdown (reefer carriers — check your policy specifically)
What cargo insurance typically does NOT cover
⚠ These exclusions catch many carriers off-guard
- Debris removal: Cost to clean up spilled freight is often separate
- Theft without forced entry: If you left your trailer unlocked and freight was stolen, many policies won't pay
- Improper packing by shipper: Damage caused by poor shipper packing is often excluded
- Certain high-risk commodities: Electronics, jewelry, pharmaceuticals, and artwork may require special endorsements
- Cargo not listed on BOL: If the freight on your truck doesn't match the BOL, coverage can be voided
- Pre-existing damage: Always note existing damage on the BOL at pickup
How much cargo insurance do you need?
The minimum most brokers accept is $100,000. But consider the actual value of freight you typically haul:
- General dry van freight: $100,000 is usually sufficient
- Electronics, pharmaceuticals, high-value goods: $250,000 or more may be required by brokers
- Automotive parts or new vehicles: Special coverage arrangements required
Check load-specific requirements on each rate confirmation — high-value loads often list minimum cargo insurance requirements.
How to handle a cargo claim
- Document everything at the scene — photos of damage, damaged freight, and surrounding conditions
- Note all damage on the delivery receipt (POD) before the consignee signs
- Notify your insurance company immediately
- Preserve all documentation: BOL, rate confirmation, your photos, repair estimates
- Cooperate fully with the adjuster