Cargo Insurance Rates

Get the Best Cargo Insurance Rates

While the most expensive part of trucking insurance is the liability coverage, cargo policy rates can be high or low depending on several factors:

  • Type of Goods Being Hauled: If you’re transporting goods like fuels, fertilizers, chemicals, foods, meats, and so on, your cargo insurance will be more than say, if you’re transporting toys or plastic items.
  • The Limit of Your Cargo Policy: Most limits are $100,000, which should ideally cover your goods in case of minor damages. However, you might have to look for higher limits and a more detailed policy if you’re hauling cars. In that case, your limit will also be higher, around $250,000-$300,000. Higher limits mean higher costs for the policy.
  • Prior Losses: If you have had losses in shipping cargo before and made insurance claims for the same, they will be factored into your premium.
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How Much Does Cargo Insurance Cost?

The cost of cargo insurance can vary wildly, as insurance providers use many ranking factors to determine your rate.

So, how much is cargo insurance? The average cost of cargo insurance usually ranges between $400 – $1,800 a year. To get a specific price for your needs, you can connect with an insurance agent and get a quote.

Three important factors affect average cargo insurance costs for trucking companies:

  • The type of commodity: The type of cargo impacts the premium you pay. The more dangerous the cargo is (for example, very dangerous flammable gas), the higher the premium will be.
  • Your claims history: If you had many claims during your trucking history, you would probably need to pay more for your cargo insurance.
  • Insurance policy limits: Typically, your insurance company will set limits on the pay-out from your policy. 

Read Next:The Complete Guide to Commercial Truck Insurance

Typical Coverages Under Cargo Insurance Policy

How much is cargo insurance for truckers? Well, the cost of a cargo insurance policy depends on the type of goods you will be hauling and the coverage limits. Some cheaper insurance policies may be tempting, but when the time comes for the insurance company to cover your losses, you may lose money.

For instance, you want to buy a cheap insurance policy, but in the fine print, the policy states that there is a debris removal coverage of only $10,000. Another policy might be slightly more expensive at $25,000. 

What if, because of a bad road, you end up spilling your cargo of paint cans all over the highway and the clean-up bill amounts to $18,000? If you bought the first, slightly cheaper insurance policy, you would have to pay up to $8,000 from your pocket for the bill. The second insurance policy, however, will cover you entirely without spending a penny.

A cargo policy generally includes some common coverages:

  • Debris Removal: It covers the costs of removing materials like paints or other cargo that may have dropped onto the roads or water bodies.
  • Pollution Liability: It covers costs to clean up spilled goods like fuels.
  • Theft and Hijacking: It covers losses caused when your goods are either stolen or hijacked.
  • Earned Freight Coverage: It covers your income which you may have otherwise not lost if your goods were not damaged.
  • Infidelity/Dishonesty Coverage: If your driver is at fault for stealing goods from a shipment, this covers your loss.
  • Water Damage: It protects you against damaged goods from water leakages into the trailer.
  • Loading/Unloading Coverage: It covers losses when goods get damaged during loading and unloading.

How is Cargo Insurance Calculated?

The cargo insurance price of a single shipment is usually calculated as the insured value times the policy rate.

Cargo Insurance Premium = Insured Value X Policy Rate

The easiest way to calculate insured value is to add the goods’ commercial invoice value to the cargo cost and then add ten percent to cover additional expenses. Also, it is important to review the terms of the policy, especially the valuation clause, to be sure of how the policy values the goods.

Another important step while calculating truck cargo insurance rates is to select the correct insured value when insuring the cargo. Making mistakes when selecting an amount can have direct financial consequences. 

To calculate the cargo insurance premium, you need to enter the:

  • Shipment value
  • Cost of cargo 
  • Extra expenses percentage 

What is Reefer Breakdown Coverage? For perishable items such as meats and foods, this coverage insures you when there is a breakdown of refrigeration equipment.

Limits of Some Cargo Insurance Coverages

Type of Cargo Insurance Coverage

Typical Coverage Limits

General Motor Truck Cargo Insurance


Pollution Liability

$10,000 or more

Trailer Interchange



$5,000,000 or more

Livestock Cargo


Debris Removal




Earned Freight


Fun Fact: What does $1 million dollar cargo insurance cost? You’d need to pay much more than the average premiums — probably between $3,000 and $5,000 yearly. 

How to Reduce Costs for Cargo Insurance?

The most important factor in buying cargo insurance is the type of cargo you will be hauling. Make sure to purchase only those insurance coverages that you would require. Read the fine print in your insurance policy for substances excluded from coverage like tobacco, liquors, and jewelry. Or on the other hand, if you do come across a shipment that can be very lucrative, find out if your insurance company can give you a bonus coverage for goods that you don’t normally haul.

In general, you can reduce your truck cargo insurance average costs by:

  • Avoiding Irrelevant Coverage or Repeating Coverage: For example, if you haul fruits and vegetables but not meats, then your reefer breakdown coverage needs to compensate for your loss in a product only. You don’t necessarily need to add extra coverage for seafood, which is more expensive.
  • Comparing policies from different companies.
  • Shopping every year for cargo insurance instead of putting up with the increase in costs with the same company.
  • Understanding and comparing the limits offered in different policies and choosing one which will take care of your damages in the case of an accident.

You can reduce rates on reefer breakdown coverage, too:

  • Pick the Right Coverage Limits: You can have coverage limits ranging from $100,000-$300,000. The difference is enormous, and you might have to shell out on your monthly premiums. Gauge how much coverage limit you require.
  • Pay in Advance: Instead of paying in monthly installments, you might save up to 20% if you buy the reefer coverage at once by paying the full amount.

Read More: The Complete Guide to Box Truck Insurance

What’s the Difference Between Freight Insurance and Cargo Insurance?

The main differences come from who these two policies are meant to cover. Freight insurance costs about the same but protects the freight forwarder or carrier. On the other hand, cargo insurance covers the sender of the goods (sellers and manufacturers). 

What Are the Three Levels of Cargo Insurance Cover?

The three main levels of cargo insurance policies are open cover cargo policies, specific cargo policies, and contingency insurance policies. 

Open Cover Cargo Policies

The open cover cargo policies become active when the insurer requires coverage for a few different cargo shipments. These policies can be renewable (can be renewed after a certain period) and permanent (have a longer duration) in nature. 

Specific Cargo Policy

When one specific cargo shipment is insured, it falls under the specific cargo policy.

Contingency Insurance Policy

If customers don’t insure their goods or accept damaged shipments, it can create a confusing situation for the sellers. In these cases, they can seek protection through their own legal system, which is mostly useless. That said, they can turn to a contingency insurance policy with lower premium rates, and sellers are not even required to tell their customers about it. 

Are you still confused about cargo insurance, or do you need some help getting a quote for your business? Contact us today and get all the information you need fast and for free!