What Is Cargo Shipping Insurance?

Marine, Shipping or Freight Insurance:

If the ship goes down, you could be held liable. Cargo insurance follows the maritime law, and according to those rules, if a ship goes down all the customers share in covering the losses. This is called the “general average” rule.

If you don’t dot your “i’s” and cross your “t”’s when filling out your coverage forms, or make the mistake of assuming that the minimum coverage is in place without checking first, you could be making a very costly mistake.

Choosing a company through which to purchase insurance can be complicated. It is recommended that you buy through a US company so that you have federal and state insurance laws in place to protect you, as well as an insurance agent there to advocate for you. Foreign companies frequently have different rules and can make filing a claim difficult.

Does your insurance cover all modes of transit? Is it an “all risk” policy?

While some insurance plans cover all modes of transit, some cover only ocean vessels or exclude warehouse storage. If this is the case, you will need to find this out ahead of time and purchase separate insurance for the various legs of your car's journey.

Depending on the value you hold to your vehicle, you might want to buy an “all risk” policy. You never do know what could happen to your car along the way. Some common risks include collision, theft or damage, accidents, fire, train derailment, containers falling overboard, natural disasters, and who knows what else. You don’t want to be the chump stuck with lame insurance.

Motor Truck Cargo Liability Insurance (MTCL)

Motor Truck Cargo Liability Insurance is just one way of protecting your car during the interim parts of the shipping experience. This type of insurance covers your vehicle while in transit and during loading or unloading. It also covers your car while it is at a terminal or dock awaiting final distribution.

When you are purchasing insurance give a detailed report to the broker in order to reduce your rates. The less information the broker has, the higher quote they will give you. Their minds will rest easy if you provide exact information about the destination’s exact location, the value of your car, and the reputation of the shipping company that you chose.

Extending your insurance is the logical thing to do. You want to protect your car to the utmost against any accident that may occur during every part of your car's journey. Don’t forget that the cost of insurance is minimal to the potential fees you could face should the ship go down, or what have you.

Because private insurance is expensive, very few customers purchase beyond that which is offered by freight shipping companies. This risk is one that you must decide if you are willing or able to make. You’ll have to be the judge when it comes to your vehicle, is it worth the risk?