What Is Motor Truck Cargo Insurance?
Motor truck cargo insurance is a commercial policy that covers loss or damage to freight while it is being transported by truck. The policy protects you, the carrier, against liability for cargo claims. If a load is damaged, stolen, or lost in transit and you are responsible, the cargo insurance pays the claim instead of coming out of your pocket.
Cargo insurance is separate from your commercial auto liability and your physical damage coverage. Auto liability covers people and property you hit on the road. Physical damage covers your own truck. Cargo specifically covers the freight in your trailer.
The only federal cargo insurance minimums on the books apply to household goods motor carriers: $5,000 per vehicle and $10,000 per occurrence (49 CFR 387.303). For general freight there is no FMCSA cargo minimum at all. What forces the coverage is commercial practice: shippers and brokers require proof of cargo insurance, typically $100,000, before they tender a load.
What Does Cargo Insurance Cover?
Standard motor truck cargo policies cover physical loss or damage caused by specific perils. Covered perils typically include:
- Collision and overturning of the truck
- Fire and explosion
- Theft and pilferage
- Strike and civil commotion (depends on policy form)
- Damage during loading and unloading (with the right endorsement)
- Earthquake and flood (sometimes optional, sometimes excluded)
Common exclusions in standard cargo policies:
- Inherent vice: Natural deterioration of the cargo (fruits ripening, metal rusting, chemicals reacting)
- Shipper's negligent packing: Damage caused by improper packaging by the shipper
- Acts of war and terrorism (often excluded but can be added)
- Refrigeration breakdown (covered only if you have the reefer breakdown endorsement)
- Specific high-value items unless individually scheduled (jewelry, precious metals, fine art)
- Live animals (typically requires a separate livestock cargo policy)
- Driver dishonesty (employee theft is sometimes a separate coverage)
Two policy forms to know about:
- Named perils: Covers only the perils explicitly listed in the policy. Cheaper but narrower.
- All risk (broad form): Covers any cause of loss except those specifically excluded. More expensive but broader. Most modern commercial cargo policies are written on broad form.
FMCSA Cargo Insurance Requirements
The only federal cargo minimums on the books are narrow, and they are very low:
- $5,000 per vehicle: The minimum coverage on each truck
- $10,000 per occurrence: The minimum aggregate coverage per loss event
These minimums apply only to household goods motor carriers under 49 CFR 387.303. The FMCSA dropped its cargo insurance requirement for general freight carriers in 2011. It never applied to private carriers (companies hauling their own goods) or to intrastate-only carriers in most states.
Real-world cargo insurance requirements are much higher than the federal minimum:
- Most freight brokers: $100,000 minimum cargo coverage to set you up on their load board
- Direct shippers (manufacturers, distributors): $100,000 to $250,000 typical, sometimes higher
- High-value commodity haulers (electronics, alcohol, pharmaceuticals): $250,000 to $500,000 or more
- Auto haulers: $250,000 to $1 million (depending on the value of the vehicles being moved)
- Household goods haulers: Specific FMCSA requirements under 49 CFR 387 Subpart C
The FMCSA's BMC-34 form is the proof-of-cargo-insurance filing that some carriers (specifically household goods haulers and freight forwarders) must file. Most general freight carriers do not file a BMC-34 because cargo insurance proof is handled directly with brokers and shippers, not through the FMCSA.
How Much Does Cargo Insurance Cost?
Cargo insurance is priced per $100,000 of coverage, so your limit requirement drives the premium directly. Commodity, operating radius, deductible, and loss history move it from there. Insureon reports a median of $129 per month ($1,553 per year) for motor truck cargo among its trucking customers, updated June 2025.
Pricing factors:
- Commodity type: The single biggest variable. Dry general freight is cheap. Electronics, pharmaceuticals, copper, alcohol, and refrigerated goods are progressively more expensive.
- Coverage limit: $100,000 vs. $250,000 vs. $500,000. Higher limits cost more, but the marginal cost per additional $100,000 is usually less than the first $100,000.
- Operating radius: Local hauling is cheaper than regional, which is cheaper than OTR. More miles means more exposure.
- Deductible: Common deductibles are $1,000 to $5,000. Higher deductibles lower the premium.
- Loss history: Past cargo claims raise your premium. A clean 5-year loss run is the best discount you can get.
- Truck and trailer security: Reefer trailers with theft alarms, GPS tracking, and high-security locks earn discounts on theft-prone commodities.
- Driver experience: Newer drivers with less commercial experience push premiums up.
Cargo Insurance by Commodity Type
Different cargo categories have different rating, requirements, and exclusions. The most common categories:
| Cargo Type | Insurance Considerations |
|---|---|
| General dry freight | Standard coverage, lowest premiums, most carriers will write it |
| Refrigerated goods (produce, meat, dairy) | Need reefer breakdown endorsement; higher premiums; spoilage limits often apply |
| Hazardous materials | Specific endorsements; higher liability and cargo premiums; not all carriers will write |
| Electronics, computers, phones | High-theft commodity; usually requires $250K+ limits and theft prevention measures |
| Alcohol, tobacco, pharmaceuticals | High-theft commodity; sometimes requires team driving, escort, or specific routing |
| Copper, scrap metal | High-theft target; requires GPS tracking, sealed loads, and route restrictions on some policies |
| Auto haulers | High value per load; specialty cargo policies with $250K to $1M limits standard |
| Household goods | FMCSA Subpart C rules apply; separate filing requirements; specific liability limits |
| Oversize / overweight loads | Permits required; cargo policy needs to acknowledge oversize hauling; sometimes higher premiums |
| Live animals | Standard cargo policies exclude livestock; requires a separate livestock policy |
Filing a Cargo Insurance Claim
The claims process is straightforward when documented well. Steps to follow:
- Notify your insurer immediately. Most policies require prompt notice (usually within 24 to 48 hours of discovery). Late notice can be grounds for claim denial.
- Document the damage with photos. Take photos before unloading. Photograph the trailer, the load, the damage, and any obvious causes.
- Notify the shipper and broker. They will want to inspect the damage and may have specific notification requirements in the rate confirmation or contract.
- Keep all paperwork. Bill of lading (BOL), delivery receipt with damage notation, weight tickets, photos, communication logs, police reports if theft was involved, and the rate confirmation.
- Get repair or replacement estimates. Your insurer will usually want a third-party valuation. The shipper or owner of the goods may also want to provide their own.
- Cooperate with the adjuster. Cargo claims often involve disputes over cause of loss (collision damage vs. inherent vice vs. shipper's packing). Provide complete information and respond promptly to the adjuster's requests.
- Wait for resolution. Standard claims close in 30 to 60 days. Disputed claims can take longer.
A salvage situation: if cargo is damaged but still has some value, the insurer may pay the difference between original value and salvage value, then take the salvage rights. The insurer then sells the salvage to recover part of the claim payment.
How to Get Cargo Insurance Quotes
Cargo insurance is usually written alongside your other commercial trucking policies. The same agent who handles your auto liability typically writes your cargo. Information you will need:
- Truck and trailer information for each unit
- Commodity types you haul (be specific; "general freight" is too vague)
- Coverage limit and deductible you want
- Operating radius and lanes
- Loss history (cargo claims for the past 3 to 5 years)
- Security measures (GPS tracking, dashcams, sealed loads, team driving)
- USDOT and MC number
Find an agent who can quote cargo insurance alongside your other trucking coverages. Tell them what you haul and what limits your brokers and shippers require.