Every trip comes with risk. Truckers know to watch for accidents, rough weather, or mechanical breakdowns, but one of the biggest threats isn’t always top of mind: the cargo itself. If the freight you’re hauling is lost, stolen, or damaged, the costs can be devastating — especially since standard liability insurance usually won’t cover those losses.
That’s where motor truck cargo insurance comes in. It’s not just a necessary policy — it’s a cornerstone of a reliable trucking operation. That’s why we’ve put together this complete guide to motor truck cargo insurance. Keep reading to understand the key details of this coverage and how to know if you’re adequately covered.
What is motor truck cargo insurance?
Motor truck cargo (MTC) Insurance provides coverage for the goods or commodities you transport in the event they’re damaged, lost, or stolen while in your care. Unlike standard auto liability insurance, which covers third-party injuries or property damage, this policy specifically protects the cargo inside your truck or trailer.
At its most basic level, it protects you from having to pay out of pocket if something happens to the freight in your care. But its benefits go beyond financial protection. Many brokers and shippers require specific cargo coverage before they’ll give you loads. Having the right policy in place shows professionalism and helps you secure better contracts.
Cargo insurance is also key to maintaining strong relationships. When a claim arises, you want it handled quickly and fairly. A drawn-out process can strain trust between you, your brokers, and your clients — and in the worst cases, it can cost you future business. Having coverage through a reputable provider ensures claims are resolved efficiently, so your reputation stays intact.
Why is motor truck cargo insurance needed?
Why is this coverage needed in the first place? Well, it all starts with the Carmack Amendment, which is a federal law (part of the Interstate Commerce Act, passed in 1906) that governs the liability of carriers transporting goods in interstate commerce. It creates a uniform national standard for carrier liability so shippers don’t have to navigate different state laws. The effect of this law is that carriers are held strictly liable for the actual loss or damage to cargo they transport, unless they can prove certain limited defenses (like acts of God, war, public authority, inherent vice of the goods, or shipper negligence).
Put simply: Carmack says carriers are financially responsible if cargo is lost or damaged — and without motor truck cargo insurance, a single claim could put a carrier out of business.
Since Carmack makes carriers liable, even if the loss wasn’t their “fault” in the usual sense, cargo insurance is the way trucking companies protect themselves from having to pay out of pocket for claims.
What does motor truck cargo insurance cover?
Motor truck cargo insurance protects against physical loss or damage to cargo while it’s in a for-hire trucker’s care, custody, or control. Put simply, if freight is damaged, stolen, or destroyed in transit, MTC pays the claim so the trucker doesn’t have to cover it out of pocket. Typical covered losses include:
- Theft of the cargo
- Fire, collision, or overturn of the truck
- Vandalism
- Certain weather-related damage (like hail, lightning, or flood, depending on the policy)
Many motor truck cargo insurance carriers also provide additional coverages, such as:
- Cleanup costs if cargo spills in an accident
- Pollutant removal if a load leaks and causes contamination
- Reimbursement for lost freight charges if the load can’t be delivered
- Expenses incurred to minimize a loss, like transloading after a wreck
Coverage can even extend while cargo is being loaded or unloaded, stored temporarily at a terminal, or left in a trailer for a short period after delivery. For refrigerated haulers, a reefer breakdown endorsement can cover spoiled goods due to refrigeration unit failure.
In short, cargo insurance protects not only the load itself but also the real-world costs of keeping freight moving.
What does motor truck cargo insurance NOT cover?
When purchasing MTC insurance coverage, it’s critical to discuss what your policy covers and does NOT cover with your insurance agent so you know the specifics of what your policy includes and excludes. In general, most MTC policies don’t cover:
- High-risk cargo (money, jewelry, fine art, live animals, explosives, contraband)
- Improper packing or poor load securement
- Natural spoilage or inherent vice of the goods
- Theft from an unlocked or unattended vehicle
- Wear and tear or gradual deterioration
- War or nuclear hazards
- Refrigeration breakdown (unless you add reefer breakdown coverage)
Motor truck cargo policies are not one-size-fits-all — there are many options, and it’s important to work with an insurance agent who understands the nuances of your business to ensure your cargo is properly covered.
For example, a refrigerated grocery truck driver without reefer breakdown coverage would be responsible for the full cost of spoiled goods if their refrigeration unit fails. Likewise, an auto hauler transporting luxury vehicles could face financial ruin if an accident occurs and their policy excludes coverage for high-value cars.
Who needs motor truck cargo insurance?
The legally required status of motor truck cargo insurance depends on the type of cargo you transport and where you operate. While it is not a federal requirement for most general freight carriers, it is mandatory for those hauling household goods across state lines and may be required by state law for intrastate carriers, depending on which state you’re in. Here are the requirements to keep in mind:
Federal requirements
The Federal Motor Carrier Safety Administration (FMCSA) mandates cargo insurance only for specific carriers.
- For-hire carriers of household goods: Interstate movers of household goods are required to have cargo insurance. The minimum federal requirement is $5,000 per vehicle and $10,000 per occurrence.
- Other for-hire carriers: The FMCSA eliminated its cargo insurance requirement for most other common property carriers in 2011, making it not legally mandatory at the federal level.
State requirements
For intrastate operations (within a single state), requirements can differ. For example, in California, truckers who haul household goods within the state must have cargo insurance with a minimum of $20,000 per vehicle while in Texas, the Texas Department of Motor Vehicles requires intrastate household goods movers to carry at least $10,000 in cargo insurance.
Contractual and operational requirements
Even when not legally mandated, most motor carriers must carry cargo insurance to meet the demands of shippers and brokers.
- Shippers and brokers: The companies that hire for-hire truckers almost always require cargo coverage as part of their contract, typically with a limit of at least $100,000.
- Owner-operators: Independent owner-operators working under their own authority must purchase their own cargo insurance. Those leased to a motor carrier may be covered under the carrier’s policy, but still require it to operate.
- Specialized cargo: Highly valuable or high-risk loads, like hazardous materials or precious metals, often require additional or specialty cargo policies to be transported.
How much does motor truck cargo insurance cost?
Motor Truck Cargo insurance costs can vary widely, but on average range between $1,000–$8,000 per truck annually (or about $120–$660 per truck per month). Several key factors influence where you’ll fall within that range:
Commodity hauled
Hauling low-value freight (like egg cartons or recycled plastic) generally falls on the low end of the cost spectrum. Hauling high-value items — such as vintage sports cars — drives premiums much higher.
Coverage limits
Your insurance limit must at least cover the value of your typical loads, but some brokers and shippers may require higher limits. Cargo insurance limits often range from $100,000 to $500,000, though haulers of high-value goods may need limits in the millions. An experienced insurance agent can help you strike the right balance between adequate protection and affordability.
Fleet size
Larger fleets typically see lower per-unit costs, since risk is spread across more vehicles.
Operating areas
Routes concentrated in congested cities usually cost more to insure than runs through rural areas or less-traveled interstates.
Experience and claims history
Insurers weigh factors like how long you’ve been in business, driver experience, and whether you’ve had prior cargo losses — and if so, how severe they were.
How to file a claim for motor truck cargo insurance
When cargo is lost or damaged, knowing how to handle the claims process quickly and correctly makes all the difference. A smooth claim protects your reputation with shippers and brokers, speeds up payment, and helps you get back on the road without unnecessary stress. Here’s what to do step by step:
1. Report the incident immediately
As soon as you notice a loss, theft, or damage, notify your insurance agent and the motor carrier (if you’re leased on). Quick reporting is critical as most policies require prompt notice, and delays can slow down or even jeopardize your claim.
2. Secure the scene and protect remaining cargo
Take reasonable steps to prevent further damage. This may mean moving the truck to a safe location, calling for cleanup assistance, or transloading salvageable goods. Insurers expect you to act in good faith to minimize losses.
3. Document the loss
Thorough documentation is key. Take clear photos and videos of the damage, keep copies of bills of lading and delivery receipts, and write down what happened while details are fresh. The more evidence you provide, the faster your claim can be processed.
4. Submit required claim forms and documentation
Your agent or insurer will provide claim forms, which you’ll complete and return with supporting documents such as invoices, bills of lading, police reports, and repair estimates if applicable. Submitting a complete package upfront helps avoid back-and-forth delays.
5. Cooperate with the adjuster’s investigation
An adjuster will likely contact you to review the facts and determine coverage. Being honest, responsive, and professional helps establish credibility and keeps the process moving forward.
6. Review the settlement offer and receive payment
Once the investigation is complete, the insurer will issue a settlement offer. Review it carefully to confirm it reflects your policy terms and the documented loss. If everything checks out, payment will be made, closing out the claim.
Why choose Sentinel Insurance Partners as your trusted motor truck cargo insurance carrier
At Sentinel Insurance Partners, trucking isn’t just part of what we do — it’s our specialty. For more than 25 years, we’ve led the way in commercial trucking insurance, building long-standing relationships with carriers who understand the unique risks and requirements of the industry. That expertise allows us to navigate the market and secure the right coverage at the best value, tailored specifically to your operation.
Whether you’re running a single truck or managing a fleet of a thousand, our commitment to exceptional service remains the same. We don’t just place policies — we act as true partners in your success. From issuing a quick certificate to guiding you through the aftermath of an accident or advising on fleet growth, Sentinel gives you more than an insurance agent. You get a dedicated team that knows trucking inside and out.
Contact us today to see how Sentinel can protect your cargo and your business.
FAQs
Is motor truck cargo insurance necessary for private carriers?
Private carriers are not required by the FMCSA to carry motor truck cargo insurance. The Carmack Amendment applies to for-hire carriers moving goods in interstate commerce, not to private carriers hauling their own freight. That said, most private carriers choose to carry cargo insurance to avoid paying out of pocket if their own goods are damaged or destroyed.
Is cargo insurance worth it?
Short answer, YES. Carrying adequate cargo insurance can save you from having to pay out of pocket in the event of a loss. In this industry, the wrong loss can be enough to put a company out of business. Cargo insurance is an important safety net that protects your business and your balance sheet. Additionally, having the right coverage with the right limits is crucial when it comes to getting loaded. Having your cargo insurance squared away before you start applying to work with specific brokers gets you loaded and on the road faster.
