What to Know about Auto Transport Insurance

Auto transport insurance seems confusing—but it doesn’t have to be. We’re here to explain the process, the dangers, and the ways to protect yourself and your vehicle.

CustomerCarrierBroker
Insurance typePersonal auto insuranceLiability coverageSupplemental coverage
Insurance summaryAuto transport not typically included, but supplemental insurance can be purchasedMust have federal minimums for license and insuranceMust use licensed and insured carriers; can offer supplemental coverage
Insurance requirementsState minimumsFederal minimumsMust use adequately insured carriers
Required for shipping?RequiredRequiredOptional
Insurance type
Insurance summary
Insurance requirements
Required for shipping?
Customer Carrier Broker
Personal auto insurance Liability coverage Supplemental coverage
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
State minimums Federal minimums Must use adequately insured carriers
Required 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. Your car must be insured before you can book a hauler.
  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.

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.

Heads up exclamation

DON’T FORGET THIS IMPORTANT STEP

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.

Auto shipper fraud isn’t running rampant—but it’s common enough to cause concern.

Through the first month of 2020, nearly 2,500 carriers were informed of violations.

Unfortunately, even that penalty doesn’t solve the problem. 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.

Get money

GET EXTRA COVERAGE

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 FAQs

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 Bargain Auto Transport, 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.

Recommended resources

There’s a lot more to car shipping than insurance. Check out some of these resources to learn more:

About Kurt Manwaring

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, Country Living, Good Housekeeping, Heavy, Slate, and Yahoo! Lifestyle. He would love to hear about your moving experiences and questions at kurt@move.org.