20 FAQs on Car Transport Insurance

March 5, 2020 Old American car on black and white background

When you’re shipping your car to another city or state, there’s no doubt you’ll have plenty of questions such as – How much does it cost? How long will it take? When’s the best time to ship a car? What’s the best car shipping method? You might even be particularly curious about car transport insurance because you want to make sure you’re covered in case anything goes wrong in transit.

So we’ve put together some of the most common questions about car carrier insurance to help you make an informed decision.

1: What are the Minimum Requirements for Car Carrier Insurance?

By law, every auto transport provider should have liability insurance along with a Motor Carrier number. Some carriers will also provide cargo insurance to cover any damage to your car in transit.

2:  Is My Car Insured During Shipping?

If the auto transport provider has cargo insurance, your car is insured against damages and theft during shipping, whether due to equipment failure or carrier negligence. This means it’s insured from the time the carrier loads it onto the hauler to the time they unload it.

Note, however, that this only applies to the car itself and not the personal items inside it. There may also be some restrictions on which parts of the car are covered, so make sure you verify the coverage details with the company. In addition, moving companies that rent out tow dollies will typically not cover your car if it gets damaged while you tow it yourself.

3: How Much Coverage Can I Get?

The actual coverage amount varies from carrier to carrier, so you’ll have to check with the specific transport provider you plan on using. At the bare minimum, auto transport providers should carry at least $1,000,000 in liability insurance. Their cargo insurance will usually range from $30,000 to $50,000 per vehicle.

4: Is The Minimum Coverage Enough?

In most cases, the minimum coverage amount is more than enough to cover damage in transit such as minor dents and scratches. However, you might need a policy that provides even better coverage if you’re shipping high-value vehicles such as classic cars and sports cars. In this case, you’ll need to find a company that provides at least three times the minimum insurance amount.

5: What Happens When My Car Gets Damaged in Transit?

Upon delivery, make sure you thoroughly inspect your car with the driver to look for any damages that occurred during shipping. Make a note of all the damages in the vehicle inspection report or Bill of Landing before you sign the release, and get a copy of the report from the driver. Don’t forget to take a picture of all the damages so you can include them in your claim.

After that, reach out to the auto transport carrier and file your claim along with all the necessary documents.

6: What is a Bill of Landing?

This is a document that records the vehicle’s condition prior to shipping as well as its condition at delivery. Simply put, it’s a vehicle inspection report that notes if any damage occurred in transit and will act as documentary proof if you need to file a claim. It’s crucial that both parties agree to the details on the Bill of Landing before you sign off on the release.

7: What Steps Can I Take to Guarantee an Easy Settlement?

Ideally, you should have a vehicle inspection report detailing the condition of your care prior to shipment. Make sure you take pictures too in case there are any existing scratches or dents. This will make it easier for the insurance provider to compare the pre and post-shipping conditions to process your claim. Check out our car shipping and preparation tips to learn more.

8: If I Leave Any Personal Items Inside the Car, Are They Insured Too?

Your car transport insurance will not cover any personal items inside your car. So if any theft or damage of those items occur, the carrier will not be liable for it. It’s best if you remove any valuables from your car before shipping it. This also helps prevent accidental damage from loose items bouncing around inside your car during shipping.

9: How Much Is Insurance?

Most auto transport providers will carry basic liability coverage by default at no extra charge besides the regular cost to ship your car. Some will also provide default cargo insurance for every shipment, but a few carriers may ask for an additional fee to get this type of coverage.

10: Can I Pay Extra to Upgrade My Insurance Coverage?

Some auto transport providers give you the option to get additional insurance if you want more extensive coverage. This will come at an extra fee, which may vary from carrier to carrier and from policy to policy.

11: Does My Insurance Cover Transit Delays?

No. Most car transport insurance policies will not cover transit delays. This means you won’t get any refund or concession for delayed deliveries. However, some car shipping companies may offer additional perks to make up for this such as rental cars so there’s minimal inconvenience for the customer.

12: Is the Broker Liable to Provide Insurance?

No. Auto transport brokers are not liable to provide car carrier insurance. The insurance should come directly from the company that’s transporting your car. At the same time, leading brokers will carefully vet the shipping companies they work with and verify their insurance status to make sure you get the appropriate coverage.

13: If I Have any Modifications or Custom Parts on my Car, Are They Insured Too?

Most default car shipping insurance policies will not cover specialty items like modifications and custom parts. However, some carriers might offer an option to upgrade your insurance and cover these items. If you need to ship specialty vehicles, make sure you go with a company that offers this type of coverage even as an add-on.

14: Is There a Deductible for Car Transport Insurance?

This varies from company to company. While some will provide insurance without any deductible, others may ask you to pay a deductible fee in case damages do occur.

15: How Can I Be Sure I’m Covered?

Although any reliable car shipping company will carry insurance, you should still check for proof of policy to avoid any issues in the future. This will give you written proof of the extent of coverage and whether there are any limitations on parts covered. Verifying the proof of policy will also help you avoid car shipping scams and choose a reliable transport company to work with.

16: Are There Any Policy Limitations?

In most cases, your car carrier insurance will only provide coverage for the value of your car according to Kelly Blue Book. This could also vary from company to company, so it’s a good idea to check about the specific coverage and policy limitations for the carrier you’re planning to work with.

17: Is Insurance Worth It?

Although there’s minimal risk of damage especially when you ship through an enclosed car carrier, there’s no knowing when accidents or equipment failures might occur. So having car transport insurance protects you from expensive repairs and is worth the investment.

18: Does My Regular Car Insurance Also Cover Damages During Shipping?

Some car insurance policies may also offer coverage for damages during shipping. This can come in handy in cases where your carrier only provides limited coverage. Make sure you check with your insurance provider about the details and limitations of the policy.

19: Is It Absolutely Necessary to Have Insurance to Ship My Car?

While having car transport insurance is not a necessity, it’s highly recommended because there’s no knowing what could happen in transit. For example, shipping your car during bad weather could leave it more susceptible to damage because accidents are more likely to occur due to slippery roads and low visibility. It’s particularly riskier if you’re using an open air car transport in these conditions.

20: What Happens If the Carrier Refuses to Honor My Claim?

If the car shipping company refuses to honor your claim and if you’ve been treated unfairly, you can always file a complaint with the local Better Business Bureau. In case of interstate car shipping where the vehicle was transported across state lines, the U.S. Department of Transportation will handle all complaints.

Final Thoughts

We hope the answers to these 20 frequently asked questions give you a better understanding of car transport insurance. For some of the more specific details such as coverage amount, deductible, and additional insurance, you’ll need to check with the specific car shipping company you want to work with as the answers may vary.

If you have any other questions about shipping your car, we also have a couple of posts about seasonal auto relocation and expedited car shipping, so make sure to check those out too. If you need a more accurate idea of how much it’ll cost to ship your car, use our online auto shipping cost calculator to get an estimate.