When it comes to auto transport services, a car shipping insurance is a thing for both to cover your vehicle from any possible harm it may take during the transportation process, and to make car relocation hassle-free for you, as with an auto transport insurance you can feel confident, less worrying, and leave all the job to professionals.

Car transport insurance may at first look like a complex and complicated topic, but it is really important to spend some time researching what insurance coverage is and get some knowledge about its features, as the more you know the fewer troubles you may get in the future.

Here we will try to give you some general information that you need to know about auto shipping insurance.

What Are the Types of Insurance – 3 Types of Coverage

There are three main types of auto insurance coverage, which the customer is recommended to get known with, as it will give you an understanding of how your vehicle can be protected during the automobile shipping process.

Customer Insurance

Customer insurance is a basic insurance policy that you must-have for your vehicle. It is required for both to drive your car, and to ship your vehicle by the auto transport company, as it is a legal issue. With personal insurance, your car is protected from different cases, like damages, which may occur when you drive a car, or when your auto was under the car shipping company’s responsibility. Thus, customer insurance can help you with replacement costs when needed. 

Carrier Insurance

This one is insurance coverage offered by car carriers. Together with customer insurance, it covers damage or losses, which may happen to your car during shipping. It is highly recommended to always check if your broker hires carriers, which provide insurance coverage. Because if it’s not you might get into trouble where your car is damaged and you are the one who will pay for that, even if the blame is not on your side. 

Also, you need to remember that according to the US Department of Transportation car carriers have a legal responsibility to carry liability insurance.

Broker Insurance

Commonly, as brokers often act as a middle-man between the car carrier and the client, they may offer you insurance coverage, provided by a third-party company. Thus, it is recommended to get known with broker car transport insurance before signing an order to ship a car. 

What is Cargo Insurance?

Cargo insurance is additional coverage, which may apply to your car during the shipping process by auto transport companies. 

Generally, this insurance policy may cover up to $250,000 in damages. The range of coverage costs can vary depending on different car shipping companies, but $250,000 usually is a limit.  

The main feature of cargo insurance is that it applies to all the vehicles, which were kept in a trailer at the moment of transportation. For example, if there were five cars in a trailer, which were damaged by the accident, insurance coverage would be split for each car, and you may get only 1/5 of the whole coverage amount. 

So, when it comes to the automobile shipping process it is better to always ask how many cars there will be in a trailer, which will provide you with an understanding of the damage coverage you may rely on. 

Terms You Should Know When It Comes To Auto Transport Insurance

Mainly, it is recommended to understand the difference between customer, carrier, and broker insurances, as all of these may cover various insurance cases. Also, ask your auto shipping company about supplemental coverage, like cargo insurance. Knowing more about insurance specifications you can be confident to get damage coverage if something goes wrong. As there can be some external factors like extreme weather conditions, which do not always include insurance coverage. 

How It Works?

Top-quality car shipping companies provide you with both carrier and broker insurance. These types of auto transport insurance usually complement each other even though there are some differences between them. 

Carrier Insurance

Auto transport insurance provided by carriers usually has limited responsibility in some ways. Generally, carriers give you coverage if your vehicle was damaged during the auto transportation process by road accidents. But the insurance may not apply to external events such as earthquakes, riots, terrorist attacks, etc.   

If the damage meets your company’s insurance terms & conditions, you can contact your car shipper and file a claim. Typically, most carriers provide cargo insurance up to $350,000, and $1,000,000 of liability insurance. While handling the claim, your own auto insurance company might have to be involved too.

Broker insurance

Broker vehicle transport insurance is a little bit different from the carrier’s one, and often it acts more like secondary insurance. As brokers usually work as middle-man, they may use a third-party insurance company, thus they are more dependent on the carriers’ insurance they hire. 

In rare instances, brokers can add some supplemental coverage, but the carrier’s insurance will be the primary coverage. Thus, broker insurance may be both beneficial and useless depending on the situation. 

What Are The Auto Transport Insurance Requirements?

Main auto transport insurance requirements include liability insurance and a Motor Carrier (MC) number with the Department of Transportation, which auto transport carriers are required to have. Also, cargo insurance is an additional option that can make car shipping more secure. 

Typically, cargo insurance provides coverage for any damage caused during the car shipping process, once you pay the insurance deductible.  Also, it is recommended to ensure that the amount of coverage is enough for the actual value of your car. 

How Much Does Car Transport Insurance Cost?

At ShipCar24 we provide free auto transport insurance coverage for up to $1,000,000. Thus, you don’t need to pay anything extra to protect your car from possible damage during the auto transport shipping process. By hiring our car transport company you can both save money on insurance, and be sure that your car will be delivered safely.

You can get your car shipping price using our instant quote calculator, which already includes the cost of insurance to ship a vehicle.  

What Will Be Covered?

Auto transport insurance coverage may vary depending on companies’ terms & conditions policy. Thus, it is highly recommended to check all the insurance details before your car goes to shipping. Commonly, your vehicle will be protected from any damage, which was caused by road accidents. But, if the reason behind the damage were external factors like extreme weather conditions, you won’t get the coverage. The same situation if your items, which were inside the car during the transportation, caused damage to the vehicle because not being properly packed. 

As a bonus, check if the company provides car shipping insurance when your car was damaged while being loaded and unloaded from the trailer.  

Main Things You Should Know About Auto Transport Insurance

When choosing a car shipping company and vehicle transport insurance you should always pay attention to documentaries and policies, as it is in your best interest to make your car shipping safe and protect yourself from fraud. 

Fake companies

There were cases of auto shipping companies with fake certificates pretending to provide car transportation services. Once the customer believed in a fraudulent vehicle shipping service, the car was then picked up and stolen. Thus, always make research before authorizing someone to relocate your vehicle. 


In rare incidents, you may get in touch with a fraudulent company, which can steal your car in the worse case, or give you fake information from the very first moment, for example ensuring you in providing auto transport insurance coverage, without any real backed up insurance company, thus your car actually won’t be protected during the shipping process. 

Companies with inadequate car shipping insurance

Even though inadequate car shipping insurance is not a huge fraud, you may authorize your vehicle shipping to a low-quality auto transport service. Companies like these may not even have insurance coverage for many cases or provide you with terrible terms & conditions policy, which may lead you to losses, as if damage happens on that company’s side, they might even decline to pay you for their mistakes.

Check the insurance details in your paperwork

Even if everything seems okay with the car shipping company, it is highly recommended to pay special attention to paperwork, which includes all of the car transport process features. 

Besides regular moments such as an estimated price for car relocation and time of transit, always check auto transport insurance details, as your vehicle first of all is your responsibility. Thus, to avoid trouble in case your car was damaged, and the insurance company doesn’t want to cover it, read the auto insurance policy carefully before signing the contract. Also, ask questions about details you may not fully understand or disagree with.

Bad companies

As there is always a possibility to hire a bad car company, plan your vehicle transportation before placing an order for car shipping. Spend some time to get known with company reviews and ask the company for all the details you are interested in. 

Commonly, you can easily find a list of reputable auto transporters, as well as the bad ones on the Internet. So, don’t forget to use other people’s experiences to ensure your car shipping will be smooth, safe, and hassle-free.  

How To Protect Yourself – Car Shipping Insurance Tip

These simple tips can help you to protect your car and save money, by avoiding possible fraud, when it comes to the car shipping process. 

Ask for proof of insurance

It is one of the main things before signing a car shipping contract. Always ask vehicle transportation companies for proof of insurance certificate and their insurance provider company. As you might need this information both to ensure your car will be well protected during shipping, and to file a claim in the case of the vehicle damages while being relocated. Thus, never skip this step, as it may cost you money and mental health.    

Get everything in writing

Do not believe only in verbal agreements as they don’t have any legal meaning. Always get everything in writing, as with a signed contract you are protected by the law in the case something happens to your vehicle on the car shipping company’s side. Also, before signing the contract read carefully all of its details and ask your questions to know for sure what you are paying for. Give special attention to auto transport insurance terms & conditions policy to get guaranteed coverage in the case of car damage.

Remove all your belongings from your car

It is recommended to remove your belongings from a car before the shipping process. For that, there are a few reasons. First of all, there is always a risk your items might be stolen, thus if you have some expensive things inside the car, take them away. The second one, personal belongings if they were not properly packed, may damage a car interior during the shipping, and this is not an insurance case. Also, if a car hauler got into an accident and both your vehicle and items were damaged, you can get coverage only for the car.   

Check with your auto insurance company

It always would be better to speak with your auto insurance company before shipping a car. By taking this step you may get more information about your insurance details, and discover which cases can be covered by your insurance provider and which by the carrier’s insurance. Thus, your car will be more protected, as both of these can be combined to cover your possible damage.

Pre-Possession Inspection

Before a car shipping company takes control of your vehicle, it makes pre-processing inspections to check any existing damages your car might have before the transportation process. It is better if you join the inspection as well to ensure all the process has been done properly. Also, you can take some pictures of your vehicle before the shipping, which you then may use in a claim as proof if your car was damaged during shipping.

Bill of Lading

Bill of lading is the condition report you will get once your car comes to the destination point. Check your car conditions carefully before signing it. If you find any damage that appeared after the shipping, contact your car transportation company for insurance coverage.

Published by Katerina Boyko
Categories: Uncategorized