Insurance Curator Cargo insurance is a fundamental piece of a coordinated trucking and logistics insurance program. For carriers operating in major U.S. freight hubs such as Los Angeles/Long Beach, CA and Dallas/Fort Worth, TX, understanding limits, valuation methods, and typical exclusions is essential to price risk correctly, satisfy shipper/broker contract requirements, and preserve margins after a loss.
This article focuses on the U.S. market, explains common policy structures, gives practical limit guidance and examples of valuation approaches, and lists the exclusions and endorsements carriers most often need.
Key cargo concepts for trucking carriers
- Policyholder: usually the motor carrier (for-hire or private) or the broker/shipper if they purchase coverage.
- Insuring basis: most U.S. trucking cargo policies are inland marine forms covering loss or damage to goods in transit.
- Per-occurrence vs. per-trailer: limits can be stated per occurrence (per loss) or per trailer/unit.
- Who’s responsible? Contracts of carriage and broker agreements drive who must carry cargo insurance; shippers and brokers often require minimum limits and specific endorsements.
See related foundational coverage differences in: Trucking and Logistics Insurance 101: Breakdown of Liability, Cargo and Physical Damage Coverages.
Typical cargo limits and what carriers buy
Typical market practice for trucking carriers in the U.S.:
- Small carriers/owner-operators: $100,000 to $250,000 per occurrence (common when hauling less valuable goods or under broker limitations).
- Mid-size carriers: $250,000 to $500,000 per occurrence.
- Large fleets or carriers hauling higher-value freight (electronics, pharmaceuticals): $500,000 to $1,000,000+ per occurrence.
- Some shippers/brokers demand limits of $1,000,000 or specialty endorsements (e.g., temperature-controlled cargo language) as contract prerequisites.
Typical related limits to coordinate with cargo:
- Auto liability: commonly $750,000 to $1,000,000 minimum for interstate carriers; certain loads or hazardous materials require higher limits.
- Physical damage (truck/trailer): varies by vehicle age and value; agreed value is common on newer units.
Practical reading on U.S. regulatory and market context: FMCSA insurance requirements and guidance — https://www.fmcsa.dot.gov/regulations/insurance
How cargo valuation works — common methods
Choosing a valuation method determines how much a carrier (or insurer) will pay after a covered loss. Below is a comparison of the most common valuation methods used in trucking cargo policies.
| Valuation Method | What it Pays | When carriers use it | Pros / Cons |
|---|---|---|---|
| Invoice / Declared Value | Actual invoice amount declared for the shipment less deductible | Standard for commercial freight; carrier or shipper declares value per load | Pros: straightforward; Cons: undervaluation or overvaluation disputes |
| Agreed Value | Pre-agreed value between insurer and insured | High-value or unique shipments (electronics, art) | Pros: eliminates depreciation disputes; Cons: higher premium |
| Replacement Cost | Cost to replace goods with like kind and quality | When rapid replacement is critical (retail goods) | Pros: full replacement; Cons: higher premiums, subject to limits |
| Market Value at Destination | Market price where goods were to be sold | Commodities with fluctuating prices | Pros: fair in changing markets; Cons: can be complex to prove |
| Actual Cash Value (ACV) | Replacement cost minus depreciation | Used when depreciation is a factor (older goods, used equipment) | Pros: lower premium; Cons: may undercompensate for true economic loss |
Carriers should document declared values on bills of lading and in dispatch systems to ensure accurate underwriting and claims handling.
For how cargo valuation interacts with physical damage and liability lines, read: How Liability, Cargo and Physical Damage Interrelate: Building a Coordinated Trucking Insurance Program.
Typical cargo policy exclusions (and common endorsements to close gaps)
Common cargo exclusions you’ll see in standard inland marine forms (and what to consider adding via endorsements):
- Theft from unattended vehicle (unless locked/secured) — carriers often need a “theft from unattended vehicle” endorsement or specific burglary language.
- Mysterious disappearance — many policies exclude losses without evidence of theft; consider a broader “mysterious disappearance” extension if loss patterns suggest risk.
- Improper packing by shipper — loss caused by shipper poor packing may be excluded; carriers should document condition and packing at pickup.
- Wear and tear, gradual deterioration, contamination — standard; important for perishables and chemicals.
- Delay, loss of market, consequential loss — these are commonly excluded; contingent coverage or a cargo legal liability endorsement might mitigate certain contractual exposures.
- War, nuclear, government seizure — typical catastrophic exclusions.
- Unseaworthiness / unfitness of container (in intermodal/ocean transits) — for intermodal shipments, ocean carriers’ conventions and endorsements change coverage triggers.
Common endorsements carriers add:
- Theft from unattended vehicle endorsement
- Temperature control / reefer breakdown coverage
- Mysterious disappearance endorsement
- Agreed value endorsement for high-value commodities
- Transit risk extension for loading/unloading operations
A practical checklist of useful endorsements is included in: Common Endorsements in Trucking and Logistics Insurance and How They Close Coverage Gaps.
Pricing: typical premium drivers and sample ranges
Cargo premiums depend heavily on commodity class, routes (e.g., Los Angeles port runs have higher cargo-theft exposure), loss history, and deductibles.
Market observations (U.S. inland trucking market; illustrative ranges):
- General commodities (low risk): roughly $0.20 to $1.00 per $100 of declared value per shipment (i.e., 0.2%–1.0%) — lower for large-volume stable accounts.
- High-risk commodities (electronics, cosmetics, pharmaceuticals): $0.75 to $5.00+ per $100 of value depending on controls, routes, and storage.
- Annual policy premiums for small carriers often fall in the low hundreds to several thousand dollars annually per power unit dedicated to cargo exposure, depending on limits and deductibles.
Major carriers that underwrite or distribute trucking cargo programs:
- Progressive Commercial — configurable cargo products for for-hire fleets and owner-operators (commercial cargo info): https://www.progressivecommercial.com/insurance/cargo/
- Large commercial writers (regional/national) such as Liberty Mutual, CNA, Great West and specialized inland marine carriers offer competitive programs and risk engineering services for freight hubs like Los Angeles and Chicago.
For additional market perspective on cargo insurance cost drivers see: Insureon’s cargo insurance overview — https://www.insureon.com/insurance/cargo-insurance
Important: the ranges above are illustrative. Underwriting variables (claims history, driver screening, locks/seals, cargo security procedures, GPS tracking, and reefer monitoring) materially change pricing. For new accounts in a high-theft corridor (for example, L.A. port drayage to East Los Angeles warehouses), expect carriers to require higher premiums or stricter deductibles and security endorsements.
Claims triggers and best practices to reduce premium and exposure
- Record declared values and keep consistent bill-of-lading language.
- Use GPS and trunking telematics, door alarms, and sealed trailers for high-value freight.
- Maintain a documented loading/unloading procedure and photograph load condition at pickup/delivery.
- Negotiate clear contract terms with brokers and shippers to allocate responsibility for packing and tamper-proofing.
- Consider a risk audit if operating in high-theft U.S. corridors (Los Angeles, Houston, Miami) to identify coverage gaps and lower premiums.
If you evaluate when a primary policy should respond versus a contingent policy (cargo vs. motor carrier vs. broker policies), review: When to Use Primary vs Contingent Coverages in Trucking and Logistics Insurance.
Final checklist for carriers in the U.S. market
- Confirm contractual cargo limits required by brokers/shippers and match policy limits or obtain a certificate.
- Choose a valuation basis that matches commercial practices (invoice, agreed value, replacement cost).
- Add endorsements for theft from unattended vehicle, temperature-contingent cargo, and agreed value when needed.
- Implement security and documentation practices to reduce premiums and speed claims resolution.
- Shop carriers with inland marine expertise for port-centric operations (e.g., Los Angeles / Long Beach) and mention your operational controls to underwriters.
Sources and further reading:
- FMCSA — Insurance: https://www.fmcsa.dot.gov/regulations/insurance
- Progressive Commercial — Cargo Insurance: https://www.progressivecommercial.com/insurance/cargo/
- Insureon — Cargo Insurance Guide: https://www.insureon.com/insurance/cargo-insurance
For guidance on how cargo integrates with auto liability and physical damage in a coordinated program, see: Physical Damage Coverage for Trucks and Trailers: Collision, Comprehensive and Agreed Value Options.