Most standard auto insurance policies will cover damage that occurs while a vehicle is being shipped, but only if the policy includes comprehensive or collision coverage and the carrier is properly licensed and insured.
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Key Factors That Determine Coverage
Insurance companies look at three main elements: the type of coverage you hold, the carrier's liability limits, and any exclusions listed in your policy. If you have comprehensive or collision coverage, the insurer typically steps in after the carrier's own insurance reaches its limits. Policies that only provide liability coverage for personal injury usually do not cover property damage during transport.
How Your Policy Works with Carrier Insurance
When a car shipper transports a vehicle, they carry their own cargo insurance, often ranging from $100,000 to $200,000. If damage exceeds that amount, your personal auto policy can act as secondary coverage, paying the remaining costs up to your deductible and policy limits. You must file a claim with the carrier first, then notify your insurer of the shortfall.
Steps to Secure Coverage Before Shipping
- Confirm the shipper's insurance limits and request a copy of their policy.
- Review your own auto policy to ensure comprehensive or collision coverage is active.
- Consider purchasing optional "transport coverage" from your insurer for added protection.
- Document the vehicle's condition with photos and a written inspection report.
Typical Coverage Comparison
| Coverage Type | What It Pays For | Typical Limits |
|---|---|---|
| Carrier's Cargo Insurance | Physical damage during transport | $100k–$200k per shipment |
| Comprehensive/Collision (Your Policy) | Remaining damage after carrier's limit | Policy limit minus deductible |
| Liability Only | Personal injury, not vehicle damage | Varies by state |
When Coverage May Be Denied
Insurers can reject a claim if the damage results from excluded causes (e.g., pre‑existing damage, wear and tear, or improper loading by the shipper). Also, if you failed to notify the carrier of damage within the timeframe specified in their contract, your claim may be void.
Final Checklist
- Verify both carrier and personal policy limits.
- Keep detailed pre‑ and post‑shipping condition records.
- File carrier claim promptly, then follow up with your insurer.