Insurance for Auto Transport Carriers
In the world of auto transport, having the right insurance isn’t just a good idea—it’s a necessity. As a carrier, your trucks will be responsible for safely transporting a variety of vehicles across the country, and any mishap or unforeseen event can result in significant financial loss if you’re not adequately protected. But how do you choose the right insurance? What should you consider? This article will walk you through the basics and key points of securing insurance as an auto transport carrier.
- Understanding the Legal Requirements
In the U.S., auto transport carriers are required by federal law to have a minimum level of insurance to protect both themselves and the vehicles they’re transporting. The Federal Motor Carrier Safety Administration (FMCSA) mandates a minimum liability coverage of $750,000 for carriers, but this amount can vary depending on the type and quantity of vehicles you transport.
- Assess Your Risks
While you can go with the minimum requirement, it’s essential to evaluate the risks associated with your business. Are you transporting luxury cars or standard vehicles? Is your route prone to accidents or weather-related risks? Understanding these variables will help you decide on the appropriate level of coverage.
- Types of Insurance to Consider
Liability Insurance: This covers any injuries or damages that you may cause to other people or property during transport. It’s the primary insurance every carrier must have.
Cargo Insurance: This is specifically for the cars you’re transporting. It covers damage or loss during transport due to accidents, theft, or other events.
Physical Damage Insurance: This covers damages to your trucks, whether it’s from a collision or other events like fire or vandalism.
General Liability Insurance: It covers broader aspects, like customer injuries at your premises or advertising injuries.
Workers’ Compensation: If you have employees, this is essential. It covers their medical expenses and wage replacement if they get injured on the job.
- Shop Around
Just as with personal car insurance, it’s a good idea to get multiple quotes. Different insurers might have different premiums, coverages, and exclusions. Speak with an insurance agent who specializes in commercial trucking—they’ll have insights specific to auto transport carriers.
- Consider Deductibles
Higher deductibles usually result in lower monthly premiums, but they mean higher out-of-pocket costs if an incident occurs. It’s a balance between what you’re willing to pay monthly versus in the event of a claim.
- Regularly Review Your Policy
Your business might grow, routes might change, and the value of vehicles you transport could increase. Reviewing your policy annually ensures you’re always adequately covered and not overpaying for insurance you no longer need.
Insurance for auto transport carriers is a vital aspect of the business, safeguarding you from potentially significant financial setbacks. By understanding your risks, regularly reviewing your policies, and staying updated with industry requirements, you can ensure your business remains protected while also thriving in the competitive world of auto transport.