Understanding Motor Truck Cargo Insurance: Basics & Coverage

April 24, 2024 Blog

Looking to protect your cargo? We’ve got you covered! In the world of freight transportation in the United States, cargo insurance and protection are crucial elements. One of the most important ways to ensure this protection is through Motor Truck Cargo Insurance coverage. In this Blog, we’ll delve deep into what this coverage entails, why it’s so important to work with brokers and shippers, and why these logistics and transportation industry intermediaries demand this coverage from trucking companies. Want to be safe alongside your cargo? Keep reading.

What is Motor Truck Cargo Insurance?

Motor Truck Cargo Insurance, also known as cargo insurance, is an insurance policy specifically designed to protect merchandise and commodities transported by trucks and commercial vehicles in the event of loss or damage due to causes such as fire, collision, or impacts during transit. This coverage provides peace of mind to both transport companies and cargo owners, ensuring they are protected.

Motor truck cargo coverage is also known by the names cargo insurance or inland marine; however, it is important that as a transportation company, you always validate with your insurance agency the type of cargo you transport and the classification of your commodities so that the insurance is quoted correctly and you do not have complications if you ever need to file a claim and activate your policy.

Benefits of Motor Truck Cargo Insurance Coverage

In addition to the basic protection offered by Motor Truck Cargo Insurance coverage, there are additional benefits that make this coverage even more valuable for both transport companies and intermediaries (brokers and shippers):

  • Additional coverages: Motor Truck Cargo Insurance coverage offers additional coverages beyond the basic coverage. These should be added to the policy if the trucking company deems it necessary or if the intermediary requires it to accept the transportation company as a provider.

One of them is “reefer breakdown” coverage, which protects the vehicle against claims in case the transported commodities suffer damages and it is proven that they were caused due to the malfunction of the refrigeration unit. Another additional coverage is known as “cleanup/debris removal,” which covers the cleaning that must be done if the cargo spills out of the trailer in a collision.

    • Quick claims response: In the event of an incident during cargo transportation, having a Motor Truck Cargo Insurance policy with the commodities your company transports correctly specified allows you to file claims with the insurer to initiate the process and determine the accountability of the case and the amount it will assume for the damaged or destroyed cargo. Remember that a quick response to the claim will depend largely on the immediate report you make of the incident and the attention you give to the case until its closure. Reports later than 5 days are considered late and may endanger the acceptance and payment of the claim.

    • Financial protection: The costs associated with the loss or damage of cargo can be significant and have a significant financial impact on your transportation company’s economy. MTC  Insurance coverage provides additional financial protection by covering the costs associated with an incident involving the transported cargo, helping to mitigate risk and maintain financial stability for both transport companies and intermediaries, brokers, and shippers.

    • Compliance with contractual requirements: In many cases, brokers and shippers, intermediaries necessary in most cargo transportation negotiations, specifically demand that the vehicles of the transportation company have cargo insurance coverage as part of the terms of the transportation contract. Having a valid Motor Truck Cargo Insurance policy helps comply with these contractual requirements and ensures the continuity of long-term business relationships.

  • Importance of Working with Brokers and Shippers:

    Both brokers and shippers play a crucial role in the supply chain in the United States. Brokers are intermediaries that connect carriers with cargo owners, while shippers are the owners of the merchandise that needs to be transported. Both demand Motor Truck Cargo Insurance coverage for several fundamental reasons:

  1. Cargo protection: For shippers, the cargo they are shipping represents significant value, either in monetary terms or in strategic importance for their business. Requiring Motor Truck Cargo Insurance ensures that their merchandise is protected in the event of an eventuality.

  2. Confidence and security: Working with trucking companies with safety and compliance practices provides confidence and security to both brokers and shippers. They know that, in case of incidents, they are backed by an insurance policy that will cover the damages or losses of the cargo.

To better understand Motor Truck Cargo Insurance coverage:

In summary,

MTC insurance is a fundamental coverage in the world of freight transportation in the United States. Both brokers and shippers demand this coverage to protect their interests and ensure cargo safety. For transport companies, having this coverage is not only a market requirement but also a way to demonstrate their commitment to the safety and compliance of the commodities they transport.

In an increasingly complex logistics environment, this Insurance is -indispensable for all stakeholders involved in road freight transportation. Don’t have yours yet? At Preventty – Insurance Agency, we guide you through the process and provide you with this insurance that, as you can see, is of vital importance for you working in the transportation industry.