Get the Best Cargo Insurance Rates
While the most expensive chunk in trucking insurance is the liability coverage, cargo policy rates can be high or low depending on a number of factors:
- Type of Goods Being Hauled: If you are 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 if you’ve made insurance claims for the same, they will be factored into your premium.
How Much Does Cargo Insurance Cost?
The cost of cargo insurance can vary wildly, as insurance providers use many ranking factors to determine your unique rate.
That said, cargo insurance usually ranges between $400 – $1,800 a year. To get a more accurate number for your needs, you should connect with an insurance agent and get a quote.
Typical Coverages Under Cargo Insurance Policy
The cost of a cargo insurance policy depends not only on the type of goods you will be hauling but also on the limits of the coverage. Some cheaper insurance policies may be tempting, but when the time comes for the insurance company to cover your losses, it may not be that effective.
For instance, you want to buy an insurance policy that’s cheap, 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 a price of $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 have bought the first, slightly cheaper insurance policy, then you will have to pay up to $8,000 from your pocket for the bill. The second insurance policy, however, will cover you entirely without you having to spend a penny.
Some common coverages that a cargo policy generally includes are:
- 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 spilt 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 for your loss.
- Water Damage: It insures you against damaged goods because of water leakages into the trailer.
- Loading/Unloading Coverage: It covers losses that occur when goods get damaged during loading and unloading.
Reefer Breakdown: 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||$100,000-$300,000|
|Pollution Liability||$10,000 or more|
|Hazmat||$5,000,000 or more|
Pay Lesser for Your Cargo Insurance
The most important factor when it comes to 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 cargo insurance rates 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 choose one which will take care of your damages in the case of an accident.
You can particularly 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 quite enormous, and you might have to shell out on your monthly premiums. Gauge how much coverage limit you actually 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.
East Insurance Group gives you a variety of insurance options to suit your requirements. We take a look at your requirements and optimize the quote in order to ensure that your business gets the best bang for its buck. Call us today and find out how we can help you save money on your insurance policy!
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Our Cargo Insurance agents are available to guide you.