Insurance for Car Shipping: What’s Covered and What’s Not?

Shipping your car across states or overseas can be nerve-wracking. What if something happens to your vehicle during transit? This is where car shipping insurance comes in—it offers protection against unforeseen mishaps. But not everything is covered. Let’s dive into what’s typically included and excluded so you can better protect your vehicle.

Understanding Car Shipping Insurance

What Is Car Shipping Insurance?

Car shipping insurance is a specialized policy designed to cover potential damage to vehicles during transport. Whether you’re relocating, buying a car online, or sending a vehicle to a buyer, this insurance ensures financial protection should the unexpected occur.

Why Is Car Shipping Insurance Important?

Without insurance, any damage to your car during transport could leave you liable for repairs. Even professional transporters encounter risks such as weather-related damage, theft, or accidents. Insurance acts as a safety net, giving you peace of mind.

Types of Car Shipping Insurance

Carrier-Provided Insurance

Most shipping companies include basic carrier-provided insurance in their services. This type of coverage is required by law and ensures some protection. However, it often comes with limited coverage amounts that may not fully compensate for high-value vehicles.

Third-Party Auto Transport Insurance

If the carrier’s insurance doesn’t provide enough coverage, you can opt for third-party insurance. These policies offer customizable options to cover potential gaps, ensuring a broader range of protection.

Coverage Included in Car Shipping Insurance

Damage During Transit

The most common type of coverage protects against physical damage like dents, scratches, or more severe harm caused during loading, unloading, or transit.

Theft Coverage

In case your car is stolen while in the shipping company’s possession, theft coverage ensures you’re reimbursed for your loss.

Fire or Natural Disasters

Acts of nature, such as fires, floods, or hurricanes, are usually included under the natural disaster coverage. Always verify this with your provider.

Exclusions in Car Shipping Insurance

Pre-Existing Damage

Insurance doesn’t cover issues that existed before transport. Documenting your car’s condition pre-shipping is crucial to avoid disputes.

Personal Belongings Inside the Car

Standard policies exclude any damage or theft of personal items left inside the vehicle, so it’s best to remove everything beforehand.

Acts of War or Terrorism

Most car shipping insurance policies specifically exclude coverage for damage caused by war, terrorism, or political unrest.

How to Verify Your Insurance Policy

Requesting a Certificate of Insurance (COI)

Always ask for a certificate of insurance (COI) before agreeing to ship your car. This document outlines the carrier’s coverage limits and terms.

Understanding Coverage Limits

Take time to review the coverage amount and deductible. High-value cars may need additional coverage.

Steps to File a Claim

Documenting the Damage

Take photos and videos of your car from multiple angles before and after shipping to document any potential damage.

Contacting the Insurance Provider

Inform your insurer immediately about the damage and provide the necessary evidence, including the bill of lading.

Resolving Disputes

Disputes may arise if the carrier denies liability. Third-party arbitration or a legal route can help resolve such issues.

How to Choose the Right Shipping Company

Researching Reputable Companies

Check reviews, ratings, and testimonials to find a reliable company with excellent insurance policies.

Checking for Licensing and Insurance

Ensure the company holds a valid FMCSA license and adequate insurance coverage.

Tips to Protect Your Vehicle During Shipping

Conducting a Pre-Shipping Inspection

Document your car’s current condition with a checklist and photos to serve as evidence if a claim is necessary.

Removing Personal Items

Leaving belongings inside the car increases risks of theft and potential disputes with the insurer.

The Role of Supplemental Insurance

When Should You Consider Additional Coverage?

If you own a luxury, vintage, or custom car, consider supplemental insurance for added peace of mind.