Auto Transport Insurance: Complete Guide
Having a car shipped or transported can cause stress and anxiety, especially if you’ve never done it before. Chief among your concerns is ensuring that you protect your car should an accident happen along the way. In this article, the MarketWatch Guides team explains what you need to know about auto transport insurance. Find out what’s covered, who covers it and what to look for when researching transport companies and what coverage they carry.
As the customer shipping your car, it’s not your responsibility to have auto transport insurance. However, since there are some damages that may be covered by your own personal auto insurance when your car is in transit, we have a few car insurance companies to recommend at the end of this article.
Key Takeaways
- Auto transport insurance is critical to have when shipping a car, but you don’t have to buy it yourself.
- Your car carrier must carry the federal minimum limit on auto transport insurance, including liability and cargo coverages.
- Thoroughly review your car hauler’s insurance policy and triple-check your personal car insurance policy to make sure you’re adequately protected.
Learn more about our methodology and editorial guidelines.
What Is Auto Transport Insurance?
Auto transport insurance is what it sounds like. Also known as car shipping insurance, this coverage applies to cars that are being shipped from Point A to Point B. The companies responsible for transporting cars buy the insurance protecting the vehicle when it gets loaded, transported and unloaded.
To legally transport your car, vehicle shipping companies must have enough insurance to cover damages that might occur while the vehicle is in transit. Even though it’s the auto hauler’s responsibility to have adequate insurance, it’s always a good idea to make sure they have the federal minimums required, which typically include liability and cargo insurance. Review the company’s auto transport insurance policy and make sure you feel comfortable with the level of protection provided.
As a car owner, you don’t have to carry any transport insurance, but it’s still smart to keep your car insured while it gets shipped. Why? You’ll need to drop it off at Point A and pick it up at Point B, and it’s never a good idea (not to mention illegal in most states) to drive an uninsured car, even a few miles.
Secondly, if you run into any issues with the carrier’s auto transport insurance, your car insurance could help out. For example, if your car gets damaged by hail during a transport through the Midwest and your carrier didn’t have the proper insurance to cover that, your comprehensive coverage could step in to pay for damages.
Likewise, suppose your car is damaged in an accident while being transported. In that case, you might have a claim with your collision coverage to supplement anything not covered by the auto transport insurance.
Before you begin the transport, check with your insurance company what coverage you have and don’t have.
Types of Auto Transport Insurance
To understand the various auto transport insurance coverages available, you’ll first need to understand the players involved with shipping your car. If you’re sending your car across many miles — or even a short distance — work with an auto transport broker, an auto transport carrier or both.
An auto transport broker can navigate the shipping process and connect you with carriers in your area. Brokers typically work with a network of auto transport companies. It’s easy for a broker to find quality options for your car’s move.
Of course, the auto transport carrier — also known as a car hauler, auto hauler, car transporter or auto transporter — ultimately will be responsible for shipping your vehicle. If you know of a reliable carrier or feel confident in your ability to find one, you can skip the “middleman” broker and work directly with the carrier.
However, because most carriers rely on brokers to connect them with customers or function as dual brokers/carriers themselves, it’s entirely likely that you’ll end up working with a broker one way or the other. Whatever way you ship your car, here are the types of auto transport insurance to know.
| Type of Auto Transport Insurance Plan |
What It Covers |
|---|---|
| Carrier Insurance (required) | Required by law, this covers damage to your car while in transit, including things like fire damages, scratches or theft. |
| Broker Insurance (optional) | Supplemental “bonus” insurance could include gap insurance or payment of your car insurance deductible for covered claims. |
| Customer Insurance (optional) | Not legally required, but this additional insurance could help with damage not covered by a carrier policy. |
A few important things to note about each of these types of coverage:
- Carrier insurance does not cover things inside your vehicle. Most companies recommend removing all personal items from your vehicle before shipping.
- Brokers don’t always offer supplemental insurance. Strictly speaking, broker insurance is an optional bonus, and as such, might only be offered in some cases to “sweeten the deal.” When shopping around for a broker, be sure to ask if they have any additional coverages available.
- Customer insurance does not always protect the car in transit. Be sure to check with your agent to find out if your policy will remain active while the transport company hauls your car.
It’s also key to note that auto transport insurance policies vary from carrier to carrier. When comparing quotes from different vehicle shipping companies, take a close look at their insurance offerings, read the fine print and make sure you understand exactly what is and isn’t covered. Then, double-check with your own insurance company to see if they’ll cover any potential “holes” in your protection plan.
Car Transport Insurance Requirements
Because many people transport their cars across state lines, auto transport carriers are required to meet federal minimums on insurance. A standard car transport policy usually includes both liability and cargo insurance.
| Liability insurance | This covers damage to property or injury to others if your truck driver is at fault for an accident. Most companies carry at least $1,000,000 in liability insurance. |
| Cargo insurance | This covers damage to your vehicle while it’s being loaded, transported or unloaded by the carrier. Most companies carry between $150,000 and $350,000 in cargo insurance. However, the amount carried is usually split across the number of vehicles on the car hauler and not based on the value of each individual vehicle. For example, suppose the load was insured for $300,000 and there were 10 cars being transported. In that case, each would have $30,000 in coverage. So, if you’re shipping a particularly expensive vehicle, make sure the total amount of cargo insurance is enough to reimburse you for the actual cash value (ACV) in the event of a total loss. |
Before your car shipper takes possession of the vehicle for transport, it will conduct a thorough inspection to identify any pre-existing damage. A detailed report on the condition of the vehicle will come with what’s known as the bill of lading. This report, which is often a digital document, will include descriptions (and possibly photographs) of any damage, including dents, dings, scratches and other blemishes.
It’s important to be present for the inspection to make sure that you and your shipper agree on the condition of the car pre-transit. This can help avoid both headache and hassle if damage is discovered post-transit.
Equally important is inspecting your car again once it’s been delivered. You should look at your car before you drive it away from the unloading site, but some companies will allow for up to $800 for any damages discovered within 48 hours of delivery.
How Much Does Auto Transport Insurance Cost?
As the owner of the shipped car, you won’t pay for auto transport insurance. The insurance is on the car hauler and the costs will fall to them to cover.
With that said, however, it’s highly recommended that you maintain car insurance on your vehicle even while it’s in transit. Doing so serves as an added layer of protection and could help with any damages not covered by your auto transport carrier, like damage in a weather storm, for example.
While you don’t need to buy auto transport insurance, per se, it’s a good idea to make sure your standard car insurance policy is up to date. While you’re at it, be sure to check with your agent to find out what will and won’t be covered during shipping.
Do You Need Auto Transport Insurance?
Yes you do, but it’s nothing you need to buy — or even can buy. What you need to do instead is thoroughly review your carrier’s auto transport insurance.
When researching auto transport carriers, read through their insurance offerings to make sure they have both liability and cargo coverage. The amounts of these coverages will vary by company, but a good rule of thumb is to look for at least $1,000,000 in liability insurance and $350,000 in cargo insurance.
Once you’ve done that, review your car insurance policy to make sure it’s up to snuff as well. Read through your policy details or check with your agent to see if your vehicle’s covered during transport.
Car Transport Insurance: FAQ
Below are frequently asked questions about car transport insurance:
The transportation carrier provides transportation insurance and includes liability and cargo coverages. Liability covers any damage to people or property if the driver (or company) are at fault for an accident. Cargo insurance covers the actual cargo being carried, such as your car and any others.
Auto transport insurance costs nothing to you if you transport your car. The car hauler, or auto carrier, is responsible for covering the cost of insurance while the vehicle is being loaded, transported and unloaded.
Auto transport costs will vary based on a number of factors, including number of transport miles. According to our research, most customers can expect to pay between $1,000 and $2,000 to have a vehicle transported.
Our Methodology:
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.
Here are the factors our ratings take into account:
Our credentials:
*Data accurate at time of publication.
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