Car Shipping Insurance: What You Need to Know

Car Shipping Insurance: What You Need to Know


There are lots of occasions that call for auto transport. You might be relocating, heading south for the winter, attending a car show, or buying a car from the other side of the country. Driving a car might not be the best option for any of these situations, especially if you’re pushed for time. 

An alternative method, on which thousands of car owners rely, is to use auto transport. It’s a smooth and straightforward process, and your car is shipped safely and securely from A to B. 

Your car is possibly your most valuable possession, second only to your home. While the chance of something happening is exceptionally remote, damage might occur during the auto transport service. The possibility of something happening is unlikely, but a reputable auto transport company will offer shipping insurance to give you peace of mind.

But what does car shipping cover? How can you be sure the auto transport insurance protects your car against any issues? What are the auto transport insurance requirements, and how much does it cost?

Let’s see if we can answer these questions, along with a few more.

Do you need insurance to ship a car?

The simple answer to this is no. You don’t need insurance to ship a car. However, according to the US Department of Transportation, auto transporters have a legal responsibility to carry liability insurance. This legal requirement applies to the company that is physically shipping your car. In other words, the carrier must have insurance.

What are the auto transport insurance requirements?

An auto transport carrier is legally required to have liability insurance. They must also have an MC, or Motor Carrier number with the Department of Transportation. It’s also a good idea to check whether the carrier offers cargo insurance.

Cargo insurance should cover any damage caused during the automobile shipping process after you pay the insurance deductible. Depending on the company, the terms and amount of coverage will vary, so it’s always a good idea to check.

It’s essential to make sure you’re comfortable with the amount of coverage offered. The minimum amount of insurance required by law will provide you with some protection. However, you may find that it falls short of the actual value of your car. 

Always find out the exact terms of the carrier’s insurance policy. Some crucial questions to ask include:

  • Is there any deductible?
  • How much will the deductible be for damage claims
  • What type of damage is covered?
  • What is the limit of the coverage?
  • Are only specific parts of the car covered?
  • Will specialty items such as spoilers be covered?
  • Can additional coverage be purchased if necessary?

When you ship a car with us, insurance coverage is included in the price. So, don’t hesitate to get in touch if you want to ask any of these questions. Our shipping advisors will be only too happy to put your mind at rest.   

What will be covered?

Most auto transport carriers have liability and cargo insurance. What this means is that the insurance covers any damages incurred during transit. However, you should note that the coverage provided only protects the cars. Anything inside is not covered by the insurance and is one of the main reasons we recommend you always clean out your car and remove all your personal possessions. 

How much does auto transport insurance cost?

If you book your car shipping with SGT Auto Transport, the auto insurance coverage costs nothing extra. 

Get an instant quote for shipping your car, and the cost of insurance coverage is included in the price. 

Car shipping insurance tips

When you’ve chosen the best auto transport company to ship your car, there are a few things you should do to ensure the process is a smooth and hassle-free experience. Here are our top car shipping insurance tips:

Request proof of insurance

If you’ve found a reputable auto transport company, they’ll be more than happy to supply you with proof of insurance. In addition, they should also be open to any questions you might have about the policy. If you encounter a company that is hesitant to provide this information, think of this as a red flag and think things through carefully before proceeding. 

Get everything in writing

Before you agree to anything, get any considerations or special agreements in writing. This will protect you should something unforeseen happen. This is particularly important if they provide you with a service or agree to something not indicated in their regular contract. 

Check with your own auto insurance company

As well as checking with the auto transport company, it also pays to check with your own auto insurance company. It depends on your policy, but some insurance companies cover your vehicle while it is being transported. However, never assume this is so, and check to make sure. 

Enquire whether the same coverage applies if the vehicle is being shipped. Also, ask whether the car shipping company must provide any form of shipping notification. 

Remove all your possessions from your car

Generally, auto transport insurance provided by the carrier will not cover any damage to your vehicle’s interior. Therefore, remove all personal and loose items from your car before handing over the keys to the carrier if you want to reduce the risk of anything happening. 

Items you should consider removing include:

  • CDs or cassettes
  • Loose change
  • Removable electronics
  • Coats and jackets
  • Anything else that could become airborne

As well as reducing the risk of damage, you’re also removing any temptation from potential break-in thieves. 

Perform an inspection

When the driver arrives to collect your car, the original condition of your car must be documented. In addition, a note will be made of any existing damage. Therefore, it is in your own best interests to be present and inspect your car with the driver. It’s also a good idea to take photographs of the vehicle to record its condition before shipping. 

The Bill of Lading

Upon delivery of your vehicle, you’ll need to check the condition of your car against the Bill of Lading and record any existing damage. You’ll need to provide detailed documentation if you need to file a claim. 

Filing a claim

Damage during auto transportation is a very rare occurrence, but should you find yourself in the unfortunate situation that you need to file a claim, it’s nice to know what to do.

The condition of your vehicle before transportation will be compared with its condition after transport. 

You and the driver will complete an inspection before your car is loaded, and any dings, dents, scratches, or chips will be noted on the Bill of Lading. A similar inspection will be completed upon delivery of your car. 

Should you notice any damages, contact the auto shipping company immediately. The car shipping company should then proceed to fix the problem efficiently and speedily. 

If this doesn’t happen, you’ll need to file a complaint against the company. You do this via the Better Business Bureau. If your vehicle was transported across state lines, you could also file a complaint with the US Department of Transportation.

Frequently Asked Questions

In our experience, several questions are asked concerning car shipping insurance. In this final section, we’re going to answer the most common ones.

Do I need insurance to ship a car?

Generally, you don’t need insurance to ship a car. However, according to the US Department of Transportation guidelines, the auto shipping company’s legal responsibility is to have liability insurance. This liability insurance protects your vehicle during shipping. 

Is my vehicle fully insured during car transport?

According to the law, an authorized transportation company must have liability insurance and a motor carrier number registered with the Department of Transportation. Typically, the insurance covers common damage to your vehicle that could occur during transit, for example, fire damage, scratches, and theft.

This type of insurance doesn’t cover personal items that might be inside your vehicle. This is why most shipping companies recommend emptying your car before you ship it. 

Most shipping companies also carry cargo insurance that covers additional damage during the automobile shipping process. However, it’s not a legal requirement, so double-check whether your carrier has cargo insurance. It’s also essential to verify the cargo insurance terms because they can differ considerably from carrier to carrier. 

Here at SGT Auto Transport, we always pre-screen the carrier to ensure they meet all insurance requirements per the Department of Transport regulations. How much your vehicle will be insured depends on the type of trailer, the company, and your car’s value.

Open car carriers generally have cargo insurance coverage between $100,000 and $150,000. Enclosed transport carriers offer cargo insurance between $250,000 and $3,000,000.

If you’re shipping a car to Hawaii, it will be subject to the ocean freight liners’ insurance limitation.  

Can I ship personal items in my car?

You can store up to 100 lbs in the trunk or cargo area of your vehicle. You must secure the items in a single box or suitcase. Both the front seat floorboards and front seats must be free of any personal items. The backseat must also remain empty unless you’ve made prior arrangements. 

If, however, you’re shipping your car to Hawaii, no personal items are allowed inside the car. 

Are my personal items insured?

Put any personal items in your car at your own risk as they are not covered by the carrier’s cargo insurance. 

Can I ship furniture in my car?

It is not possible to ship furniture in your car as this service is not included under the terms of a carrier’s license. Therefore, you can only ship your car and some specific personal items when it comes to auto transport services. 

What do I do if my car is damaged during car transport?

It’s a very rare occurrence, but it should put your mind at rest if you know what to do should it happen. There is a specific procedure you should follow, and it starts with an inspection of your car upon delivery. If you notice any damage, make a note of it on the Bill of Lading. Make sure the carrier gives you a copy. Then, take detailed pictures of the vehicle and the damaged areas. 

Individual auto transport companies tend to follow similar procedures to ours. Once you’ve taken photos, we recommend you contact our shipping advisors and request a copy of the carrier’s Certificate of Insurance. Then you submit a claim form to our dedicated Claims Department. 

Do I have to pay a deductible?

Our customers do not have to pay a deductible. The deductible on the carrier’s certificate of insurance doesn’t apply to you. However, remember that the monetary value of the damages must be greater than or equal to the carrier’s deductible amount if the claim is to be processed by the carrier’s insurance company. 

What if there is damage to my car caused by my personal items?     

If you have personal items in your car and they cause damage, they will not be covered by the carrier’s cargo insurance policy. Any personal items you ship are at your own risk. If you choose to ship personal items, it is strongly recommended that you pack and secure them inside your car’s trunk or rear cargo area. If you do this, you’re reducing the risk of damage to your car.

Are there any hidden costs or charges I need to be aware of?

SGT Auto Transport prices are all-inclusive. There are no hidden fees or charges. Prices include all taxes, toll fees, full insurance, and all other shipping freight costs. 

If you have any other questions or want to get an instant quote for shipping your car, please get in touch by calling (864) 546-5038 or use our Live Chat option. You’ll also find an instant quote calculator here on our website that you can use at your convenience.

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