Insurance is an important part of the auto shipping process. It’s what protects you and your vehicle if damage occurs. If you ever need to ship your car a long distance via truck or boat, it’s wise to invest in auto transportation insurance in addition to your regular car insurance.
While the chance of your vehicle withstanding any damage is rather low (around 5% in most cases), you don’t want to end up paying for any costly damage that your insurance provider has not agreed to cover. There’s also the risk of your premium increasing should you need to make a claim.
Since auto transport insurance is often a one-time consideration, it’s important to understand how this type of insurance works, and what to look for.
In this article, we are going to cover:
- The basics of auto shipping insurance
- What kind of coverage most shipping companies carry
- Understand what your personal auto insurance will cover
- Things you can do to reduce the risk of damage
The Basics of Auto Shipping Insurance
Every auto shipping company will provide their own form of insurance. The total coverage will vary depending on who you ship with. Whatever company you choose, you’ll want to make sure they are legitimate and have insurance.
The easiest way to check if an auto shipping carrier is legitimate is to look for their USDOT number. You can search for a company through the Federal Motor Carrier Safety Administration’s website.
By law, the FMCSA requires all auto shippers to carry insurance.
- Open transport carriers typically provide up to $250,000 of coverage, which covers around $25,000 for each car. This is because most cars transported using this method are classified as standard vehicles.
- Enclosed transport carriers often carry around $500,000 of coverage, all the way up to $2 million. This additional coverage exists because sport, exotic, and luxury cars are usually transported using this method.
When in doubt, ask. Don’t be afraid to ask your auto shipping company what kind of insurance coverage they offer. Ask for any correspondence or agreements to be made in writing. This will protect you in the event a claim is necessary. Reading the fine print before handing over your keys goes a long way to making sure you get what you pay for.
Most personal auto insurance plans cover your vehicle, but there are specific conditions that you must meet. If you violate any of these conditions, your vehicle claim may be denied.
What Types of Damage Are Covered?
Auto shipping insurance is comprehensive. It’s commonly referred to as “Marine Insurance,” or “Cargo Insurance.” It will cover any damage that occurs during the transportation of your vehicle. This includes things like:
- Mechanical problems
- Total loss of a vehicle (up until the maximum amount offered)
That’s why we always recommend you purchase additional insurance if your vehicle is valuable.
NOTE: In the event of tot al loss, the Kelley Blue Book value is often used to determine the value of your vehicle. This can lead to significantly reduced payouts, and is something that you need to be aware of.
Auto shipping insurance will not cover any personal belongings in your vehicle. The coverage only extends to your vehicle
The Minimum Auto Shipping Insurance Requirements
Authorized automobile transporters are legally required to provide you with basic coverage and certain rights. For example:
- Liability insurance is always a given. The FMCSA requires it.
- The company is also legally obligated to give you a copy of their insurance certificate if you request it. Feel free to verify this information with the FMCSA.
Here’s what you need to know.Basic auto shipping insurance is limited. Auto shipping insurance plans will only cover up until a certain amount of damage. These plans do cap out. If you own a luxury vehicle, you may require additional insurance.Additional coverage comes with a higher price. If you want peace of mind for your vehicle, expect to pay more for it. Most companies carry the bare minimum insurance required by the FMCSA.Document everything. Document the condition of your vehicle before and after your shipment. You’ll need to create a detailed paper trail if you need to make a claim.
What Is a Bill of Lading?
The Bill of Lading is essentially a condition report upon arrival of the vehicle. The auto transport company will no longer be liable if you fail to note the damage on the Bill of Lading.
Base Coverage or Extended Coverage?
The answer to this question will depend on you. Extended coverage is recommended if:
- You value peace of mind and want a seamless auto shipping experience.
- Your vehicle is worth a lot and base coverage won’t cover total loss of it.
- The shipping route is considered dangerous
Understanding Your Personal Auto Insurance Coverage
While most auto shippers provide default liability insurance, these plans don’t always cover everything. Take some time to ask your personal insurance provider about your policy and what it covers. Ask things like:
What type of damage is covered?
Will the plan only cover damage incurred before and after transit? This is an important question to ask, especially if your auto shipper will be driving your car at any point.
Are only specific parts of the car covered by your policy?
Most auto insurance policies will not cover your personal belongings in the car. If you’ve decided to ship expensive electronics in your car, they likely won’t be covered. However, your possessions may be covered through your homeowner’s insurance.
When does the insurer’s liability start and stop?
In many cases, the coverage only covers whenever the vehicle is in transit. Any damage caused while your car is moved from the boat, or truck to the company’s facility might not be covered in the contract. To avoid high premiums on your end, look for full coverage that covers from the time you hand over your keys to the time you get them back.
NOTE Certain plans will only cover your vehicle within North America, leaving your vehicle unprotected when its unloaded in somewhere like Europe, or Asia.
What to Do Before Shipping
The auto shipping process is straightforward. Most shipments are completed without any issues. If you want to decrease the likelihood of complications, there are a few things you need to do:
- Remove any loose items from within the vehicle such as MP3 players, phones, change, tools, keys, and other small items that could be thrown around during shipping. Do not try and ship valuables in your car. Many policies will not cover your possessions and any damage done to the inside of a vehicle.
- Inspect your vehicle. Take photos and write down any notable damage. That means creating a record of major scratches, dents, and other damage. It’s important for you to create a thorough paper trail.
- Remove exterior add-ons. If you’ve installed any exterior add-ons to your car, remove them. It’s typically recommended that you disable your alarm system as well.
You want to be prepared. Making insurance claims is never fun, but it’s a reality that we all have to face from time to time.
In the Event of a Claim
If you notice new damage when your vehicle is delivered, immediately document it. The most opportune time to assess for damage is right after your vehicle is delivered. Remember to check the undercarriage, start the engine, and to check for mechanical problems.
If damage is present, document it on your Bill of Lading and have the delivery driver sign it. An updated Bill of Lading is an acknowledgment that this damage exists. You will need a valid one for any insurance claims that you make. Failure to note the new damage on the Bill of Lading will reduce your chances of a successful insurance claim.
Respectable companies will handle your complaints in a reasonable time frame. If you find them hard to work with, consider filing a complaint to a professional organization the company belongs to, such as the Better Business Bureau.
Are you looking for additional information on auto shipping insurance? Check out the following resources:
- Understanding auto transport insurance
- Will My Vehicle Be Insured?
- A-1 Auto Transport FAQ
Questions? Don’t hesitate to ask. A-1 Auto Transport has decades of experience shipping vehicles around the world.
Written By:Joe Webster
Joe Webster began his journey in the auto transport field by attending the University of Southern California (USC), where he graduated with a Bachelor of Business Marketing.
After college, he started his career in the auto transport industry from the bottom up and has done virtually every job there is to do at A-1 Auto Transport, including but not limited to: Truck Driver, Dispatch, Sales, PR, Bookkeeping, Transport Planner, Transport Manager, International Transport Manager, Brokering, Customer Service, and Marketing. Working with his mentor Tony Taylor, Joe Webster has learned the ins and outs of this industry which is largely misunderstood.
With over 30 years experience in the industry, we've been helping people ship their vehicles, motorcycles, RV's, heavy equipment, household goods and more across the country or overseas without a hitch. Ask us anything.