What to Know about Auto Transport Insurance

Kurt Manwaring
Researcher & Writer
Read More
Published on September 21, 2021
6 min read

At a glance

Auto transport companies must provide basic liability coverage. In some cases, you can also purchase additional insurance coverage from your auto transporter. For example, our favorite car shipping companies provide extra insurance options like gap coverage and cash toward your deductible. Your personal insurance may also offer auto transport coverage, but you’ll want to ask your insurance agent about the specifics of your policy.

3 types of auto transport insurance

Customer
Carrier
Broker
Insurance type

Personal auto insurance

Liability coverage

Supplemental coverage

Insurance summary

Auto transport not typically included, but supplemental insurance can be purchased

Must have federal minimums for license and insurance

Must use licensed and insured carriers; can offer supplemental coverage

Insurance requirements

State minimums

Federal minimums

Must use adequately insured carriers

Required for shipping?

Optional

Required

Optional


Auto transport insurance: 3 types of coverage

There are three types of transport insurance to know about when you ship your car:

  1. Customer insurance. You don’t usually need personal insurance to ship your vehicle.
  2. Carrier insurance. The carrier must have insurance that covers damage to your car.
  3. Broker insurance. The broker can offer supplemental coverage to attract customers but isn’t required to provide insurance.

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Auto transport insurance: Terms to know

Auto transport insurance is easier to understand if you’re familiar with a few key terms:

  • Carrier: A car transport carrier is a company that transports your vehicle. A carrier is referred to by many names, including auto hauler, car shipper, car carrier, and transport carrier.
  • Broker: An auto transport broker is a company that connects you with a carrier. It doesn’t actually ship your car.
  • Supplemental: This just means “extra,” as in, “I got a second job for some supplemental income.” As it relates to auto transport insurance, brokers sometimes offer supplemental coverage.
  • Licensed carrier: A carrier needs a license to transport your car just like you need a license to drive it.
  • MC number: Auto transport companies are assigned a Motor Carrier (MC) number that gives them the authority to operate and take cargo across state lines.
  • USDOT number: The numerical auto transport equivalent of cookies that track you on the internet—only it can’t be deleted if the brokers or carriers do something naughty, and anyone can look at the history. USDOT stands for US Department of Transportation.

Auto transport insurance: How it works

What does the insurance policy cover?

The transport company’s insurance policy typically covers damage that occurs when loading your car, while the car is in transit, and when unloading the car. Everything else, including any damage caused because your car was in poor shape when you shipped it (e.g., leaking oil, loose parts, etc.), is your responsibility.

Exclamation
DON’T FORGET THIS IMPORTANT STEP

Be sure to examine your car upon delivery before signing the bill of lading. Once you certify the condition of your car, it’s nearly impossible to get coverage for damage you may have missed.

We like AmeriFreight because it compensates you for up to $800 worth of damage discovered within 48 hours of delivery.


Auto transport insurance: Things to know

Fraud is real

Auto transport criminals are just as real as bank robbers and embezzlers. Keep yourself from becoming a victim by learning about a few key dangers in the auto transport industry:

Fake companies

Counterfeiting is a problem. We’re not talking about money, but the falsification of USDOT and MC numbers. Fraudulent organizations can put these numbers on their paperwork or trucks to look legitimate, but then drive off into the sunset with your car, motorcycle, or Batmobile.

Nobody wants that (except the crooks).

Bad companies

Just about anyone can become an auto broker or carrier. While that can be a great opportunity for entrepreneurs, it’s not always the best thing for customers.

Imagine getting a haircut from someone who didn’t go to cosmetology school. There’s a chance everything turns out OK—but there’s also a chance something goes terribly wrong. In the case of bad auto haulers, you get a broken (or missing) car instead of a bad haircut.

Many auto transport brokers warn that carriers can just reorganize under a different name with new registration numbers. To the unsuspecting customer, the paperwork looks golden. In reality, it’s a disaster waiting to happen.

Money
GET EXTRA COVERAGE

Brokers aren’t required to offer insurance, but some go out of their way to give customers supplemental coverage options. We’re impressed with Ship A Car Direct because it offers a damage guarantee of up to $500 toward your deductible.

How to protect yourself

There are a few simple things you can do to avoid many of the dangers associated with auto transport insurance:

  1. Know the difference between carriers and brokers. If you go into things expecting a broker will help with insurance issues, you’ll be disappointed. Remember, brokers connect you with carriers, and carriers transport—or carry—your vehicle to its destination. If a transport company doesn’t clearly state if it's a broker or carrier, you should probably go to the next one on your list.
  2. Check the paperwork. There’s an easy way to see if a car hauler or auto transport broker is what it claims to be. Go to the Federal Motor Carrier Safety Administration website and enter the name of the business. Click on the company name when it appears, and then verify that the USDOT and MC numbers match what the company says. Keep your distance if the company makes it hard to find its MC number.
  3. Keep an eye on your financial transactions. If you pay with a credit or debit card, make sure the transport company doesn’t take more than what you authorized. If it does, contact your financial institution and file a complaint.
  4. See what Move.org has to say. We are continually updating our lists of the best car shipping companies and adding new company-specific reviews like AmeriFreight, Ship A Car Direct, and Sherpa Auto Transport. It’s our job to help you find the most reliable companies.
  5. Check review boards. Take 10 minutes to read customer reviews. If you make it through 10 minutes and don’t find any complaints about potential fraud, you’ll feel a lot more comfortable moving forward.

Auto transport insurance FAQ

Does auto transport insurance include pick-up and delivery?

Car shipping insurance typically covers pick-up, transportation, and delivery. However, you should always check the specific terms and conditions of the insurance policy to be sure.

How do I know the truck driver will keep my car safe?

You can minimize risk when shipping your car by using a broker that conducts background checks on each auto transport truck driver. Some of our recommendations include American Auto Shipping, Montway Auto Transport, and Sherpa Auto Transport.

How much is car hauling insurance?

Basic coverage is typically built into your car shipping quote, but you can ask the broker or carrier to break down the specific costs for you.

Is insurance higher on trucks or cars?

Auto transport insurance costs vary depending on several variables, including the value of your vehicle and whether you are using open or enclosed auto transport.

Do you need insurance to ship a car?

Yes. Both the customer and the car carrier must have insurance to ship a vehicle.

Are there any car shipping companies in Hawaii?

Yes, many carriers provide auto transport services in Hawaii. You can even buy a car on the mainland and ship it to Hawaii. Contact one of our best car shipping companies or motorcycle shipping companies to learn more.

Do you need car insurance to ship a vehicle?

No, you typically don’t need car insurance to ship a vehicle. However, personal insurance is necessary if you plan to file a claim with your insurance company.

What should I ask an auto transport company about its insurance?

You should ask an auto transport company to verify the insurance status of the carrier assigned to your shipment. Additionally, it helps to ask if the transport broker offers additional auto hauler insurance (like gap coverage or cash toward your deductible).

How much does car carrier insurance cost?

Car carrier insurance doesn’t cost anything (every auto transporter must provide free basic liability insurance). However, some auto transportation brokers sell extra insurance for a small fee. For example, AmeriFreight offers gap coverage worth up to $2,000 for $50–$100.

Does commercial auto insurance cover bodily injury?

You’ll want to check the terms and conditions of your contract to see if commercial auto insurance covers bodily injury. The basic cargo insurance carried by a car transport company usually covers only damage to your vehicle due to driver negligence.

Does my insurance company cover car shipping?

Insurance companies sometimes cover car shipping. You should speak with your insurance provider to learn what is covered by your specific insurance plan.

Does auto transport insurance cover property damage?

No, auto transport insurance typically doesn’t cover property damage. Many transport brokers require your car to be free of personal belongings before agreeing to ship your vehicle.

Where can I find a car shipping company that uses an enclosed carrier?

You can find a car shipping company that uses an enclosed carrier by contacting any transport broker. Every auto shipping company offers both open and enclosed transport and provides basic liability coverage for both shipping services.


Kurt Manwaring
Written by
Kurt Manwaring
Kurt Manwaring brings nearly a decade’s worth of research experience as a business consultant to the Move.org team. He specializes in taking complicated issues (like moving) and presenting them in a way that everyone can understand. His writing has been featured in hundreds of publications, including USA Today, Martha Stewart Living, Country Living, Good Housekeeping, Heavy, Slate, and Yahoo! Lifestyle. He brings a BS in sociology and an MPA (masters of public administration) to the Move team. He would love to hear about your moving experiences and questions at kurt@move.org.