Motor Freight Insurance
What is Motor Freight Insurance?
The entire transportation community relies on motor carrier certificates of insurance, including shippers, brokers and freight forwarders alike. State regulatory agencies also rely on these certificates as evidence of carrier insurance.
Insurance for your truck and trailer is typically going to be one of your biggest expenses outside of fuel. Finding the best insurance instead of the “cheapest” is always good business in this case because being in an accident involving an uninsured or under- insured truck and/or trailer can leave you financially devastated for years.
There are 3 forms of coverage found.
• Physical Damage
• Trailer Interchange Insurance – Used to cover damage to a specific trailer when it is borrowed or hired by an insured trucker from another trucking firm. Damage must be from a covered peril under the Physical Damage coverage section.
There are two flaws result in unrecoverable losses when brokers, 3PLs and shippers rely on insurance certificates without doing more than filing them in their carrier files.
• A certificate of insurance does not disclose exclusions in the policy that it purports to cover.
• The insurance agent that issues the certificate of insurance only endeavors to notify the certificate holder of a cancellation or a modification of the policy, with no legal liability for failure to do so.
Exclusions from coverage typically encompass whatever happened to cause the loss. For example, “water damage caused by rain, sleet or snow” was excluded in a carrier’s policy without the carrier’s knowledge (and the insurer automatically presumed the water damage was from one of these sources). In another example, a frozen food carrier’s policy excluded “mechanical breakdown of the refrigeration unit”. Why did that carrier pay premiums for a policy that excluded the principal cause of its losses?
Most transportation contracts require the carrier to present a certificate of insurance without demanding that the carrier furnish a copy of the cargo policy, or at least a copy of the portion of the policy that states what is covered and what is not covered.
• Parties that are relying on cargo insurance coverage must include in their contracts a requirement that the carrier produce a copy of that portion of their policy that states what is covered and what is not covered.
• You must insist on receiving a written agreement from the issuer of the certificate that they will give notice of cancellation or modification within a stated period, and that the issuer will be liable for the consequences of their failure to do so.
What is Non-Trucking Liability, Bobtail, and Deadhead Coverage?
These are different terms for the same type of coverage. This type of insurance provides coverage protection for your truck when you are off the job. While you are working, the company you are leased onto is usually responsible for your insurance coverage.
What you need to know concerning the Motor Carrier Act of 1980 and the MSC-90 Endorsement
To view the form, visit http://www.fmcsa.dot.gov/forms/print/MCS-90.htm
What you need to know
• Do you need insurance to cover you, your drivers, or both?
• Do you need workmen’s compensation?
• Are you looking for insurance to cover collision, fire, theft, CDC?
• Do you need full liability?
• Are you looking for bobtail liability?
• Do you want to insure your cargo?
• Do you need fuel bonds?
Please Note: Once you decide the type of insurance you need for your semi truck and trailer, you’ve also got to determine coverage limits.
Get multiple quotes – This is always a good idea no matter what you’re shopping for. The best way to comparison shop is to go online. Usually, all you have to do is fill out an online form and submit it. You should have the pricing information you need in no time!
Compare your quotes – When one quote is lower than another, it’s important to make sure you’re being quoted for comparable coverage. Some companies bundle their coverage while others offer a basic package and then offer additional coverage options as riders.
Research the insurance company – You always want to find out as much as you can about the insurance company before purchasing a policy. First and foremost, you want to work with an insurance company that is financially able to pay out claims, and you also want a company that processes claims in a timely manner. Start by checking with the various rating services and regulatory agencies to see what you can find out. Also, find out what you can about the company’s claims processing policy.
Revisit your needs – Access your situation to ensure that your policy is updated to your needs.