Shipping your vehicle can be a convenient solution when relocating, buying a car from out of state, or sending a vehicle to a seasonal residence. However, entrusting your valuable asset to a transport company can also raise concerns, especially regarding its safety during transit. One of the most frequently asked questions by customers considering auto transport services revolves around insurance. Specifically, how does Vehicle Transport Insurance work?
This guide will comprehensively address this crucial question, providing you with a clear understanding of vehicle transport insurance and how it safeguards your vehicle during the shipping process.
To begin, it’s essential to distinguish between two primary types of companies in the auto transport industry: carriers and brokers. Understanding their roles is crucial for grasping insurance responsibilities. If you’re unfamiliar with the differences, exploring resources that detail brokers vs carriers in auto transport will be beneficial (replace with an actual relevant link if possible).
In essence, carriers are companies that own and operate their own fleet of transport trucks. Your vehicle will be directly transported on their trucks. Brokers, conversely, act as intermediaries. They don’t possess their own transport vehicles. Instead, they leverage extensive networks to connect customers with suitable carriers for their vehicle shipping needs.
Knowing whether you are dealing with a carrier or a broker is paramount when discussing insurance coverage and understanding who is ultimately responsible for your vehicle’s safety during transport.
J&S Transportation operates as both a carrier and a licensed auto transport broker, offering flexible solutions to meet diverse vehicle shipping needs.
Understanding Carrier’s Auto Transport Insurance
When you choose to ship your vehicle with a carrier, you can expect them to have cargo insurance. This insurance is designed to cover the vehicles they are transporting, essentially the “cargo” on their trailers.
However, it’s important to understand the limitations of carrier cargo insurance. Carrier responsibility is typically capped at the actual cash value (ACV) of your vehicle at the time of an incident. In the unfortunate event of an accident, an insurance adjuster will assess the ACV of your vehicle. This valuation, along with the cost to repair or replace the vehicle, will determine the carrier’s financial responsibility to you, the vehicle owner.
Alt Text: Open car carrier truck transporting multiple vehicles on a highway, illustrating vehicle transport.
One significant exclusion in most carrier cargo insurance policies is coverage for what the insurance industry terms “Acts of God“. These events are generally defined as natural disasters or events outside of human control. Examples include hurricanes, tornadoes, earthquakes, and floods. Damage to vehicles resulting from these rare occurrences is usually evaluated on a case-by-case basis. While such events are infrequent, it’s crucial to be aware that damage resulting from an “Act of God” might not be covered by the carrier’s insurance unless you have your own comprehensive auto insurance policy.
Similarly, coverage for damage caused by terrorism or civil unrest may be uncertain and subject to specific policy qualifications. While these situations are also uncommon, they represent potential risks that might not be fully covered under standard carrier cargo insurance.
A common question is whether you are required to have your own car insurance policy in place when shipping a vehicle. The answer is no, it’s not mandatory. However, if your vehicle sustains damage during transport that falls outside the scope of the carrier’s insurance policy (such as damage from an “Act of God”), you will be personally responsible for those costs. Therefore, it is highly advisable for vehicle owners to maintain their own auto insurance policy while shipping their vehicle to ensure complete financial protection.
In cases where vehicle damage occurs during transit and is covered by the carrier’s cargo insurance, you will typically need to file a damage claim directly with the carrier. Each carrier has its own claims process, so it’s essential to inquire about their specific procedures before booking their services.
As a carrier, J&S Transportation provides substantial insurance coverage, including $350,000 in cargo insurance and $1,000,000 in liability insurance. This robust coverage applies when we transport vehicles using our own J&S trucks. You can review our detailed coverage information on our certificate of insurance.
Important Note on Cargo Insurance Limits: It’s vital to understand that the stated cargo insurance coverage amount applies to the entire load of vehicles on a trailer, not to each individual vehicle. For example, if a trailer carries eight vehicles and the cargo insurance limit is $350,000, the theoretical coverage per vehicle might appear to be $43,750 ($350,000 divided by 8).
However, this is a simplified illustration. The actual insurance payout per vehicle is not determined by a simple division. Insurance companies and adjusters consider various factors when assessing coverage per vehicle in a claim situation. The crucial takeaway is that the cargo insurance coverage is shared across all vehicles on the trailer, and it’s not a fixed amount guaranteed for each vehicle.
Insurance Considerations When Working with Auto Transport Brokers
When J&S Transportation acts as a broker to expedite your vehicle transport, we leverage our network of reputable partner carriers to find the best shipping solution for you. This often allows for faster pickup and delivery times.
In our role as a broker, we meticulously vet every carrier we partner with, ensuring they maintain adequate cargo insurance. We possess in-depth knowledge of industry standards and insurance requirements. Just as you would prioritize insurance when arranging transport yourself, we prioritize it to protect our customers’ vehicles from potential damage.
For instance, if your vehicle is valued at $65,000, and we determine a carrier’s cargo insurance might only provide maximum coverage of $45,000, we would decline to work with that carrier. While total vehicle loss is exceedingly rare, we always prioritize ensuring your vehicle is fully covered in such an unlikely event.
Most reputable carriers maintain cargo insurance ranging from $150,000 to $350,000 and liability insurance of $1,000,000 or more. However, when evaluating carriers, it’s essential to look beyond just the coverage amounts. Cargo insurance applies to the entire trailer load. Therefore, understanding the types of trailers a carrier uses provides insight into the potential coverage applicable to your specific vehicle. When J&S Transportation acts as your broker, we handle all this thorough vetting and research on your behalf.
Similar to carrier-direct insurance policies, carrier insurance obtained through a broker typically excludes “Acts of God”. Again, maintaining your own vehicle insurance provides an added layer of protection against these exceptional circumstances.
In the event of damage during transit when working with a broker, you will typically file the damage claim directly with the carrier, not the broker. This is a critical distinction to understand so you know the appropriate party to contact should any issues arise.
Unfortunately, some less reputable brokers may simply direct you to the carrier and offer minimal assistance when damage occurs. However, J&S Transportation distinguishes itself by acting as a liaison in the claims process. If your vehicle is damaged while we are acting as a broker, we request that you notify us immediately. We will then contact the carrier on your behalf and assist you in filing the damage claim. We advocate for you, ensuring the claim is properly filed and promptly addressed by the carrier. We remain actively involved until the claim is resolved.
Furthermore, we ensure that every carrier in our network not only possesses sufficient insurance coverage but also has a strong reputation and a proven track record of handling damage claims fairly and efficiently. We refuse to partner with carriers who lack adequate insurance or have demonstrated a history of mishandling customer claims.
It’s also noteworthy that reputable brokers often carry brokerage insurance. J&S Transportation, as a licensed broker, maintains this additional insurance. Consider it as “secondary insurance,” which can be utilized if the carrier’s insurance proves insufficient or has unexpectedly lapsed. However, this insurance rarely comes into play for us due to our rigorous carrier vetting process. We diligently verify that the carrier’s insurance is appropriate for the vehicles being shipped and confirm its active status throughout the transport duration.
Alt Text: Example insurance certificate showcasing vehicle transport cargo and liability coverage details, essential for car shipping peace of mind.
Key Points to Remember About Vehicle Transport Insurance
When customers inquire about car shipping insurance, they are primarily concerned with cargo insurance, as this is the specific insurance type that covers damage to the vehicle during the shipping process. Regardless of whether you work directly with a carrier or through a broker, it’s crucial to confirm that the carrier’s cargo insurance provides adequate coverage for potential damage to your vehicle during transport. You should also understand the carrier’s procedures for handling damage claims.
This essential information should be obtained directly from the carrier. If you are utilizing a broker, ensure that the broker is diligent in selecting carriers with sufficient cargo insurance coverage and that they have a process in place to assist with damage claims.
Whether you choose J&S Transportation as your carrier or broker, we guarantee that the cargo insurance coverage will be sufficient to address any potential damage to your vehicle during transit. We are also committed to providing comprehensive support throughout the claims process, ensuring your claim is handled correctly and promptly, giving you peace of mind when shipping your vehicle.
