Trusting someone else to ensure your vehicle’s safe shipping is never easy, especially on a long haul. Every owner can envision a few worst-case scenarios of what might happen if the carrier fails to take every precaution to deliver their car safely.

Fortunately, auto transport insurance exists for this reason. Bad things can still happen even when a carrier does everything right. That still doesn’t mean that you should have to take possession of your car in a worse condition than before.

But car shipping insurance can be a bit tricky to understand at first glance. Before you sign a shipping contract with a carrier, you need to know about the insurance types you’ll encounter, the coverage, and how to determine if someone’s trying to pull a fast one on you. This article will provide this information and more so you can make a more informed decision.

Types of Vehicle Transport Insurance

There are three main types of auto transport insurance:

Personal insurance
Carrier insurance
Broker insurance

Each one has a clear purpose and some pros and cons you need to know.

How Personal Insurance Works

Personal insurance is the insurance you’re obligated to buy to own and drive your vehicle. However, it may or may not include coverage for transportation scenarios, especially when you’re not the one behind the wheel.

To find out what is covered in a shipping scenario, it’s best to contact your auto insurance provider directly. In most cases, you should be able to ask for a copy of the policy via email so you can study it thoroughly.

Depending on how much you pay, it could provide some coverage that carriers or brokers won’t. But it’s more likely that your coverage only extends to damage your vehicle might sustain when you’re the one driving it.

If you want to ship your car across state lines, it may have limited applications.

In addition, you might not have personal auto insurance if you purchased the vehicle on the other side of the country. In that case, since you can’t drive your car back home, you might need a carrier to do it for you.

This is where carrier insurance comes in handy and can help protect your investment.

How Carrier Insurance Works

Every licensed carrier must have auto shipping insurance. But despite what many people believe, this vehicle shipping insurance policy doesn’t cover a lot. Usually, it only covers potential damage during loading and unloading operations and specific damage incurred in transit.

It’s important to understand that most carriers will have up to $1 million in liability insurance and up to $350,000 in cargo insurance. While this may seem like enough to cover potential damage, that’s not always the case.

Cargo insurance applies to the cargo in its entirety. If you’re shipping your car on a trailer that can haul eight or more vehicles, the $350,000 insurance gets split between all the cars. In addition, an insurance adjuster will analyze various factors to determine what share of the $350,000 applies to your car.

This makes it even more important to carefully pick your carrier when shipping an expensive or classic car across the country.

Another lesser-known fact among car owners is that carrier vehicle transport insurance won’t cover natural disasters or “Acts of God.” Furthermore, it also won’t cover issues of civil unrest and other man-made problems of this nature that contribute to damaging your vehicle.

Although these instances rarely cause issues in the car shipping industry, they remain possible. For this reason, owners should consider getting good personal auto insurance that could cover said events.

You should also know that auto shipping insurance only provides coverage for the cargo. In this case, the cargo is the vehicle. Anything you leave inside the vehicle, such as personal items or valuables, won’t be covered.

How Broker Insurance Works

A broker can extend additional coverage, but its car transportation insurance won’t come into play if your vehicle sustains damage during shipping. This is because brokers aren’t obligated to have insurance.

Brokers act as the middleman between you and carriers. It’s a broker’s job to find the best carrier to take your vehicle from point A to point B safely and within a specific timeframe.

However, a broker isn’t responsible for what happens to your car during transit. If it gets damaged or the shipping results in a total loss, the carrier’s car shipping insurance will have to provide partial or total coverage.

So why do brokers sometimes offer auto transport insurance? Most of them do it to attract customers. Some do it to provide supplemental coverage for carriers that don’t have the best policies or don’t offer anything beyond the federal minimum mandates.

But at the end of the day, brokers aren’t responsible for what happens to your car while in transit.

With that in mind, if you use a broker, you’re trusting that company to find you the best carrier. Some could put you in contact with an inexperienced carrier with poor coverage and transport experience. Unfortunately, the broker can’t be held accountable if the carrier fails to meet your demands or damages your vehicle.

Do You Need Insurance to Ship a Car?

If you ever asked yourself, “What insurance do I need to transport cars?” the answer is simple. None.

No vehicle owner is obligated to buy personal car shipping insurance just to ship their vehicle with a carrier. However, the carrier must provide liability insurance according to federal regulations.

Whether that insurance policy is adequate enough to protect your vehicle is another story. Insurance coverage can differ greatly between carriers and, thus, it’s crucial to compare carriers before trusting one with your car.

Car Transport Insurance Cost

Most carriers will include the car transport insurance cost in the shipping price for your order. That said, you should try to get more details about the coverage.

For example, you can ask about any deductibles you might have to pay. Furthermore, you should get a rough estimate of how much coverage you will receive in the event of total loss. Again, the final figure will be determined by an insurance adjuster who will appraise the car as cargo.

It’s also good to ask about coverage limits and the type of damage that the policy accepts. Random natural or man-made disasters won’t likely be covered, but accidents should be.

Furthermore, consider if your car has specialty items, a custom body kit, etc. Make sure the carrier’s coverage extends to those parts and doesn’t only include specific parts.

Then, you can ask about coverage extensions. This is rarely necessary but can be useful if you want additional protection, especially when shipping across long distances or to remote areas with bad roads and weather conditions.

How to Avoid Fraud

Believe it or not, there’s plenty of fraud in the auto transportation industry. While the Department of Transportation has strict requirements, not all carriers will meet them.

The biggest red flag is a carrier’s refusal to provide you with in-depth information and insurance documentation. If the carrier isn’t transparent about the car shipping insurance policy, you should probably look for a different carrier.

There’s another reason you shouldn’t hand over your car to just any carrier to ship. Car insurance might be mandatory in the industry, but carriers can still operate legally even with the worst policies on the market.

Therefore, you could end up paying a premium on a shipping service that can’t cover a quarter of what your car is worth in the event of total loss. Some might even structure their policies to limit their liability by excluding various types of damage that can occur during transit, loading, or unloading your vehicle.

Therefore, transparency is preferred.

Doing Your Due Diligence

You can’t rely only on what coverage your carrier might provide. Before shipping your vehicle, you should do your due diligence.

Ask for Insurance Proof

The carrier must provide you with a valid insurance certificate that outlines the type of coverage it has. Additionally, carriers should inform you of what auto transport insurance companies they work with.

This will allow you to file a claim with the right insurance provider.

Put It in Writing

Just because you read their insurance certificate doesn’t mean the carrier will do right by you. To hold them accountable, the coverage terms must be clearly outlined in the contract before you sign.

If a shipping contract doesn’t include information on the insurance, it’s best to avoid signing it.

Inspect and Document Your Car’s Condition

Almost every reputable carrier will thoroughly inspect your vehicle before assuming possession for shipping. This is to determine if your car may possibly sustain damage due to already existing flaws. It’s also for determining pre-existing damage.

But you should do your own inspection and compare it to the carrier’s discoveries. This will eliminate the risk of fraud and can help you file a claim later.

Don’t Sign the Bill of Lading Too Soon

Your carrier has delivered your car to your driveway. At this point, you would sign the Bill of Lading, take possession of the vehicle, and conclude the contract.

However, you shouldn’t do that without a thorough inspection. Take some time to verify that your car didn’t sustain damage that wasn’t otherwise documented before the carrier took possession of the vehicle.

If you sign off without inspecting, you might not be able to file an insurance claim or be reimbursed for the damages.

Know the Terminology That Might Appear in the Auto Transport Insurance Policy

You need to know a couple of terms associated with car shipping insurance policies. These will likely be present in the contract, but if there’s a misunderstanding, you could be agreeing to unfavorable terms.

Carrier

The carrier is the actual service provider that picks up your car, loads it onto a trailer, and ships it to your desired destination.

Broker

A broker can be a company or individual that finds carriers available to transport your car according to your requirements. Though they might also offer insurance, a broker isn’t mandated to have insurance for transporting cars because they won’t be directly responsible for hauling the car.

MC Number

The MC number is a Motor Carrier number that is assigned to carriers allowed to legally haul vehicles across state lines.

USDOT Number

A USDOT number is a tracking number issued by the Department of Transportation. Carriers should be able to provide this to prove they’re in good standing and operating a legal business. The number will help you dig into the carrier’s history and analyze its operational performance.

Supplemental

The term supplemental can be used to refer to various extra perks outside the standard package offered by a carrier or a broker. For example, broker insurance for transporting cars can offer supplemental coverage for specific types of damage.

Don’t Let Insurance Policies Fool You

Auto transport insurance exists to protect the customer from unfortunate situations as much as the carrier. Legally, carriers are obligated to offer insurance. However, the extent of the policy’s coverage is often a significant differentiator between reputable carriers and companies that don’t have their clients’ best interests at heart.

If you’re going to pay deductibles on a car shipping insurance cost, you should at least ensure that you’re getting a good deal. You won’t need personal insurance to ship a car but make no mistake that your policy could have complementary provisions.

The same goes with broker insurance. You don’t have to buy it, but sometimes brokers can cover situations that the carrier won’t. Other times, you might just be paying unnecessary fees on top of the auto transport brokerage fee.

The only way to get peace of mind is to do your due diligence when selecting a broker. Armed with the information in this article, you should be able to understand the offers laid out by brokers and carriers and choose the best one for your needs. If you need additional assistance, Ship Vehicles can offer guidance and transportation with extensive car transportation insurance coverage for a wide range of vehicles across many routes.

Auto Transport Insurance – Ship Your Car Safely