What Insurance Covers Your Car During Transport?
Here's what shocks most people: your personal car insurance probably won't cover transport damage. We've handled over 50,000 shipments since 2015, and insurance confusion causes more headaches than actual damage claims.
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What Type of Insurance Do Car Transport Companies Carry?
Every licensed auto transport company must carry cargo insurance and liability coverage - it's federal law. At Liberty Car Shipping, we carry up to $250,000 per vehicle in cargo coverage, plus $1 million in liability insurance.
Cargo insurance covers physical damage to your car during loading, transport, and unloading. This includes scratches, dents, broken glass, or major collision damage. Liability insurance kicks in if the carrier causes property damage or injury to third parties.
But here's the catch: not all damage scenarios are covered equally. Weather damage, pre-existing conditions, and certain types of wear can create gray areas that leave customers frustrated.
Does Your Personal Auto Insurance Cover Car Shipping?
Most personal auto policies don't cover your car while it's being transported commercially. We've seen this surprise hundreds of customers over the years.
Your comprehensive coverage might apply in specific situations - like if your car gets stolen from the transport truck. But damage from loading mishaps or road debris? Usually excluded. The insurance company's logic is that you've handed control to a commercial carrier.
Smart move: call your insurance agent before shipping. Get it in writing whether you're covered or not. Some premium policies include commercial transport coverage, but don't assume yours does.
How Much Coverage Do Transport Companies Actually Provide?
Federal regulations require minimum coverage of $750,000 for carriers hauling 1-8 vehicles, and $1.2 million for larger operations. But that's total coverage across all vehicles on the truck - not per car.
Most reputable carriers carry $100,000 to $1 million per vehicle. We carry up to $250,000 because we've seen what luxury cars and classics cost to repair properly. A minor scrape on a Tesla Model S can easily hit $8,000.
Here's what most companies won't tell you: they'll try to pay actual cash value, not replacement cost. That 2018 BMW might be worth $35,000 on paper, but you paid $42,000 last year. The difference comes out of your pocket unless you fight for it.
What Damage Is Typically Covered vs Not Covered?
Covered damage includes scratches from loading equipment, dents from road debris, broken windows, and collision damage from accidents. We've processed claims for everything from door dings to total losses from carrier rollovers.
Not covered: pre-existing damage, normal wear and tear, damage from items left in the car, and sometimes weather-related issues. That last one trips people up. If hail damages your car during terminal-to-terminal shipping while it's sitting in an open lot, some carriers claim it's "act of God" exclusion.
The biggest fights happen over pre-existing damage. This is why that pre-transport inspection is important - and why you need photos from every angle before the driver shows up.
When Does the Insurance Coverage Start and End?
Coverage begins the moment the driver takes possession of your keys and completes the pickup inspection. It ends when you sign the delivery receipt - not when you drive away.
This timing matters more than you think. We had a customer in West Palm Beach who noticed a scratch two hours after delivery. Because he'd already signed off, proving the damage happened during transport became nearly impossible.
During loading and unloading, you're in the highest risk window. Most damage happens in those first and last 15 minutes. Stay present, take photos, and don't sign anything until you've done a thorough walk-around.
How Do You File an Insurance Claim for Transport Damage?
Document everything immediately - photos, detailed notes, and get the driver to acknowledge the damage on the delivery receipt. Don't let them rush you or claim "it's just a small scratch."
Contact the transport company within 24-48 hours with your claim. Most carriers require written notice within a specific timeframe - usually 5-10 days. After that window, you might be out of luck regardless of who's at fault.
Expect the process to take 30-90 days minimum. Insurance companies will request repair estimates, want to inspect the vehicle, and often try to lowball the first offer. We've seen claims drag on for six months when customers don't stay on top of the process.
Should You Buy Additional Insurance Coverage?
For vehicles worth over $50,000, additional coverage makes sense. Standard carrier insurance might not fully cover a luxury or classic car's true value or specialized repair needs.
Third-party transport insurance costs $200-$500 per shipment but can provide gap coverage your personal policy and the carrier's insurance won't. Companies like Shipaddict and ReloCube offer policies specifically for auto transport.
Classic and exotic car owners should definitely consider it. A 1967 Mustang might only be "worth" $30,000 on paper, but finding original parts and proper restoration work costs way more. Corporate relocation clients often add coverage since they can't afford delays with employee moves.
What Questions Should You Ask About Insurance Before Booking?
Ask for the carrier's insurance certificate and MC number so you can verify coverage independently. Don't just take their word for it - we've seen unlicensed brokers fake insurance documents.
Find out their claims process upfront. How long do you have to report damage? What documentation do they require? Do they use preferred repair shops or let you choose? Getting this in writing prevents surprises later.
Most importantly: ask about their damage history. Reputable companies will tell you their claim rate and average settlement times. If they dodge this question or get defensive, that's a red flag you can't ignore.
Insurance Coverage Comparison: Personal vs Carrier vs Additional
| Coverage Type | What's Covered | Typical Limits | Best For |
|---|---|---|---|
| Personal Auto Policy | Usually excludes commercial transport | $0-$25,000 | Daily driving only |
| Carrier Cargo Insurance | Physical damage during transport | $100,000-$1,000,000 | Standard vehicles |
| Third-Party Transport Insurance | Gap coverage + specialized repairs | $50,000-$500,000 | Luxury/Classic cars |
| Carrier Liability Insurance | Property damage to others | $750,000-$1,200,000 | Accident protection |
Most transport damage claims are under $2,000 and get resolved within 60 days. The real insurance nightmare isn't major accidents - it's small damage that wasn't properly documented at delivery.
Key Takeaways
Frequently Asked Questions
Answers to common questions about Liberty Car Shipping services.