Minimum Cargo Insurance?

P51bombay · Feb 3, 2009

Got a pretty good quote off State Farm for my two (1 ST, 1 cutaway) but apparently (agent is checking) they don't offer cargo. Right now I'm looking in [ Part 387: Minimum levels of financial responsibility for motor carriers ] and it makes no mention of cargo requirements, only liability - am I looking in the wrong place or is there no requirement for cargo? The company I am contracting the trucks to self insures their cargo so if there is not a requirement to carry cargo there's not much point in having it.

pjjjjj · Feb 3, 2009

We had also checked into State Farm, being our personal insurer, and were also told they don't cover cargo. Apparently insurers want 'everything', they don't want to just insure cargo alone, without also getting the liability portion. An 'all or nothing' type of deal, is what I have been told.
Are you getting your own authority Bombay?
Apparently, even though there is no difference any more between 'common' and 'contract' carrier authorities, the common carrier authority requires the insurer to publicly post cargo coverage.
Confusing.
If you know you will only ever be carrying cargo for one company who insures it themselves, I guess you have the cargo insurance aspect covered.
Be sure you also get CGL (I'm not sure if it's called the same thing in the USA?).
And ask State Farm if they know how to do what they're required to do, as far as posting coverages with FMCSA.
And remember... if the deal seems too good to be true, it probably IS. But what do *eye* know?

P51bombay · Feb 3, 2009

Yes, I already filed, apparently in WA state it is a requirement regardless if you "lease on" to someone which isn't really what I am doing. They pay X amount of $ for exclusive use of the trucks and hourly use of drivers. Anyway, SF said they will do everything BUT cargo - so I was just looking to see if there is actually a FMCSA requirement to have it and as it stands I don't see one that says I must. The only scenario I can see where I "might" need it is if I were to do some side jobs to get the trucks paid off faster. The other option is the company (who is a customs broker as well as FF and logistics) said they may be able sell me just cargo - usually they offer insurance on specific shipments so this option needs checking into.

What's CGL?

pjjjjj · Feb 3, 2009

Here, CGL stands for something like 'commercial general liability' (I think?).. there is something the same, but called different (I think) over there. Its purpose is to cover all the inbetween things, the hidden spots you would never think about, until it was too late. That's why it really is best to deal with an insurer who is very experienced in the trucking industry specifically. Too many loopholes which can screw you in the end.
If I may, I would suggest contacting at least 2 other popular truck insurers, and just getting a quote, asking questions, try to get some explanations.. educate yourself.. better to take that bit of extra time just to gain knowledge, even if you end up going with SF in the end. There might not be any reason NOT to go with them under your circumstances. I can tell from your posts you are the type to investigate your options.
If you do some reading up on some of the lawsuits that have taken place, and what insurance companies try to get out of paying, when it comes down to it, it'll scare you to bits!

When you got your authority, (I'm assuming MC?) Was it 'contract carrier' or 'common carrier'? This is quoted from OOIDA's website: Truck Insurance coverage - OOIDA - small business/owner-operators/small fleets

15. Do you need different types of insurance if you have contract authority vs. common authority?

FMCSA does require that common carriers have at least $5,000.00 Cargo Insurance on file with them and they do not require you to file Cargo coverage with them, if you have Contract Authority. However, depending upon your operation, most for-hire types of authority will carry at least $100,000 cargo.

JennyLucas39 · Mar 18, 2021

P51bombay said:
Yes, I already filed, apparently in WA state it is a requirement regardless if you "lease on" to someone which isn't really what I am doing. They pay X amount of $ for exclusive use of the trucks and hourly use of drivers. Anyway, SF said they will do everything BUT cargo - so I was just looking to see if there is actually a FMCSA requirement to have it and as it stands I don't see one that says I must. The only scenario I can see where I "might" need it is if I were to do some side jobs to get the trucks paid off faster. The other option is the company (who is a customs broker as well as FF and logistics) said they may be able sell me just cargo - usually they offer insurance on specific shipments so this option needs checking into.

What's CGL?

Commercial General Liability (CGL) is a type of insurance policy that provides coverage to businesses for bodily injury, personal injury, and property damage caused by the business's operations, products, or injuries that occur on the business's premises.
for further FMCSA consultations, you can contact A+ Agents of Process.