Before shipping a car, it’s always wise to have a complete understanding of insurance coverage. What kind of damage will your personal auto insurance cover, if any – and what is covered by the shipping company? Although damage, theft, and vandalism are quite rare in the car shipping industry, accidents can happen and you want assurance that your car will be properly covered.

When asking if insurance covers car shipping – the answer is – it all depends. It depends on what your personal auto insurance may or may not cover, and several other factors. To uncomplicate the topic of car shipping insurance, we uncover the mysteries so that you’ll be armed with key information and complete peace of mind when you ship your car.

What to Know About Auto Insurance Before You Ship Your Car

If you’re planning to ship your car, you want absolute assurance that in the off chance your car is blemished, vandalized, or stolen, insurance will cover the damages. Basically, there are three types of auto insurance that you need to know about when you ship your car:

  • Personal Auto Insurance. All car shipping companies require proof that the car you will be shipping is covered by a personal auto insurance policy.
  • Auto Transport Insurance. Federal and state regulations require vehicle shipping companies to carry liability and cargo insurance that will cover loss or damage to your car.
  • Broker Insurance. Some auto shipping brokers offer supplemental insurance coverage but it is not a federal or state law requirement.

What Your Personal Auto Insurance Will or Will Not Cover During Shipping

Of all your assets, your car is one of the most valuable. Therefore, it’s essential that you have confidence your car will be fully protected before you turn it over to a car shipping company. Take the time to find out what your auto insurance company will and won’t cover during shipping.

  • Call Your Auto Insurance Agent –Talk with your agent about coverage during shipping. Knowing what your personal auto insurance company will and will not cover will help you know which questions to ask potential auto shippers about their coverage. 
  • Get Terms and Conditions in Print – Ask for a copy of your auto insurance company’s Terms and Conditions. Ask your agent to highlight the sections that relate to what they will and will not cover when your car is shipped.
  • Notify Your Insurance Company Before Shipping – Regardless of whether or not your auto insurance will provide coverage for your car when it’s being shipped, it’s a good idea to notify your agent that you’ll be shipping your vehicle. 
  • One-of-a-Kind and High-Value Autos – If you have a unique vehicle such as a vintage, antique, exotic, or luxury car, ask your agent if you can purchase supplemental insurance specifically for the shipping period. This information will help you make decisions about insurance coverage options when you start investigating various shipping companies. 

What the Auto Transport Company Will and Will Not Cover During Shipping

Reputable car shipping companies provide insurance and follow the Department of Motor Vehicles (DOT) insurance and state regulations. It’s best to stay away from auto hauling companies that charge an added fee for insurance. Trustworthy shipping brokers, like Caravan Auto Transport, thoroughly vet all the haulers in our network to ensure that they carry the full amount of appropriate coverage for your particular vehicle. 

Essentially, trustworthy interstate car haulers maintain the following minimum coverages:

  • Liability – One million dollars in public liability insurance.
  • Cargo Insurance – The amount of minimum coverage depends on the type and size of the carrier, and the amount listed is for all the cars on the carrier:
    • $150,000 minimum cargo insurance for open carriers that haul between 1 – 3 cars.
    • $250,000 minimum cargo insurance for open carriers that haul 4 – 8 cars. 
    • $350,000 minimum cargo insurance for open carriers that haul 8 -10 cars.
    • Enclosed carriers typically carry insurance starting at $500,000 and can extend coverage up to $5 million. Many enclosed carriers offer door-to-door service and their insurance usually covers a car from the time it’s picked up to the time it’s delivered. Be sure to ask if there are additional charges for door-to-door service.
  • Limitations 
    • If your car suffers loss or damage related to an  “Act of God” – natural disasters like tornadoes, hurricanes, floods, mudslides, hailstorms, or earthquakes – the auto transport company will not be liable. Acts of God fall under the car owner’s personal auto insurance policy. 
    • The auto transport company’s insurance covers the vehicle when it’s on the truck. When the vehicle is on the ground, even if parked at the carrier’s drop-off and pick-up terminals, any damage becomes the owner’s responsibility.

If you feel that the minimum insurance coverage won’t be sufficient to cover the value of your car, or the deductible is too high, ask your insurance company if you can purchase additional coverage that will supplement the transport company’s insurance. You also can ask the shipping company if you can purchase extended, or supplemental coverage. 

For extra peace of mind, you can ask for your contract to read: “vehicles are fully insured from pickup to drop-off by the transporter’s cargo insurance, with ($) deductible for the owner of the vehicle.” (The deductible amount will be filled out by you. Do not leave this blank.) Whether you upgrade your insurance through your own auto insurance provider or with the shipping company, either way, you’ll have the assurance that your valuable asset is covered. 

Be Sure to Understand What Type of Damage is Covered

Understanding the type of damage that the car transporter’s insurance will cover, will give you the ability to decide if you should add a rider for specific damage. Ask if the carrier’s insurance:

  • Covers damage to the entire car or only to specific parts of the car. The best coverage provides bumper-to-bumper insurance from the time the vehicle is picked up through to the time it is unloaded. Ask if comprehensive options are available.
  • Covers rock chips, terrorism, mechanical breakdowns, or damage that the truck driver doesn’t cause.
  • Is limited to a specific standard. Some haulers limit their coverage to the Kelley Blue Book value of the vehicle.
  • Covers loose items inside the car. Normally, If anything is left inside the vehicle, such as a tablet, cables, sunglasses, etc., the carrier’s insurance will not cover damage or theft.
  • Is limited only to the truck driver’s policy or also includes the carrier’s cargo insurance as well.
  • Has adjustable deductibles. Typically, average shipping damages total less than $2,000 in repair costs. However, most shipping deductibles start at $2,500 or can go as high as $5,000 or more. Be sure to see the deductibles in writing.

In Summary

  • It will be worthwhile to carefully read both your personal auto insurance AND auto shipping company’s Terms and Conditions.
  • Understand both your personal auto insurance and shipping company’s deductibles.
  • Take photos of your washed, clean car right before drop-off and upon delivery. Photos are the best proof of your vehicle’s condition. 
  • At delivery, before you sign the bill of lading, thoroughly inspect your car. Once you sign the bill of lading, it’s close to impossible to get coverage if you notice damage later.

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Caravan Auto Transport exclusively works with reputable, insured auto shipping companies that are experienced in moving any and all types of vehicles. You can trust that Caravan will connect you with the most trusted, insured auto haulers. Get your free quote now!

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