Experience is Key
Transportation Insurance, more specifically, Motor Truck Cargo Insurance, are not fields where an agent should dabble without some expertise. The specific nuances in this class of insurance can potentially lead to extensive errors and omissions exposure for agents if they are not familiar with the caveats of coverage and terminology.
What is Motor Truck Cargo?
Motor Truck Cargo Insurance provides legal liability coverage for truckers, whether common or contract, while they are transporting property of others.
The policy protects
- the insured (trucker)
- and the covered property (cargo).
The contracts must be reviewed for legal liability.
The agent needs to know who is legally liable at which point during shipping to guarantee that the correct coverage is in place in the event of a loss.
This requires knowing
- who is transporting what,
- where,
- how
- and when.
Understanding Coverage
While other classes within the industry are seeing companies come and go, and coverage change dramatically from year to year because of catastrophe losses and capacity, Motor Truck Cargo tends to remain constant. The coverage is basic when understood; some price fluctuation may occur from year to year, as influenced by the economy,
Many Cargo forms have sub-limits, co-insurance requirements or deductibles that an insured may not be aware of when choosing a policy. It can be difficult for an agent and insured to completely understand the differences between one form and another if the agent does not review this type of form or coverage on a regular basis.
The types of forms can be narrowed down to:
- scheduled
- or composite.
The Composite Form is audited at the end of year. It can be used when looking to add new and/or replacement trucks during the policy terms. This form will charge on:
- revenue
- miles
- units.
The Scheduled Form looks at each unit individually; and is able to better control the number of drivers.
Both the Composite Form and the Scheduled Form have benefits on the size of the fleet, number of drivers (and experience) and the units of cargo.
Difficult Commodities
Policy forms usually have limitations and sub-limits for certain commodities, unless a buy-back is in place.
Certain commodities will always be difficult:
- tobacco,
- alcohol,
- precious metals,
- furs,
- monies.
The above mentioned risks pose problems and can be excluded if not specifically mentioned. In most cases, a buy-back of coverage would have to be in place. Other exclusions can include electronics or computers.
The high value target commodities are the most difficult classes to write. These would-be items that are the most common targets for theft. Tobacco will always lead the list, but pharmaceuticals, furs and automobiles are close behind.
Special Coverage Extensions
- Earned Freight Charges: this is a separate limit to cover earned freight charges outside the limit of liability.
- Debris Removal: this is a separate limit to provide clean-up of debris after an accident.
- Reloading Expenses: this coverage endorsement usually provided a flat amount of separate coverage for reloading the cargo.
- "Transit:" defined to include ordinary, reasonable, and necessary stops, interruptions, delays or transfers incidental to the route and method of shipment.
- "Loading" and "Unloading:" redefine terms to "included when immediately adjacent to the transporting conveyance."
- Spoilage or Freezing
- Diminishing Deductible: no losses each year can have the deductible diminished to a lower amount.
- Non-Owned Container and Trailer Interchange Coverage
- Owner's Goods Extension
- Pollutant Clean Up and Removal
Transportation Experience
Some carriers will allow their most experienced agents to access online rating via the Internet. Many of our markets trust us to know the correct coverages and provide quotes to our prospects/clients. We have access to many markets that are considered top of class for transportation risks. We would love to put our experience and knowledge to work for you! Contact our team of experts today to your free Motor Truck Cargo insurance quote!
