Auto Shipping FAQ: How Does Auto Transport Insurance Work?
Auto transportation is an expensive process which requires a lot of faith, really, on your part. You have to have faith that the auto transport broker will find you a reputable and legitimate auto transport carrier, and you’re also putting faith in that carrier that they’ll take good care of your vehicle during transport.
Usually your faith is well-rewarded; stories of misconduct in the car shipping industry aren’t all that uncommon, but they’re far from the norm; in an industry as sparsely regulated as ours, you’ll usually find a lot of smaller companies trying to get a slice of the pie before things tighten up, and the car transport industry is no exception.
There are probably over ten thousand auto transport companies between all the brokers, carriers and quote providers out there, and finding ones that really know what they’re doing can be a pain if you’re new to the experience or don’t know where to go.
So where to start? Well, this blog post should help. When it comes to insurance, only auto transport carriers actually have to carry insurance – if a broker tells you they have additional insurance coverage for sale, it’s a scam.
Brokers don’t need insurance for transporting cars because, simply put, they don’t physically transport them; they just broker the load between you and the carrier and make it easier for everyone to communicate and get along. Also, it doesn’t matter if you have insurance on your vehicle or not; your auto transporter’s insurance will always take precedent.
Any damage that the car is subjected to during transit will be repaired at the carrier’s expense (or their insurance company’s, anyway), which means that even if you have top-flight insurance on your car it won’t make a difference when it’s being shipped.
All auto transport carriers are required, per federal law, to carry at least $750,000 of public liability insurance as well as cargo insurance, though the latter may vary depending on the types of cars the company ships, how big their truck is, etc. Most standard transporters will carry upwards of $1 million worth of cargo insurance in case of catastrophic loss, which is incredibly rare.
Damage to vehicles most often consists of cracked windshields, minor dings and dents, and of course they’ll get dirty as most vehicles are shipped via an open transport carrier. However, any and all damages, as mentioned, must be taken care of via the transporters’ insurance policy. You will need to submit a claim through them and jump through all the (admittedly annoying) hoops to get your vehicle repaired.