Your Carrier Had No Insurance: What Happens to Your Claim

Your car was damaged — and you just found out the carrier had no valid insurance, or their policy doesn't cover what happened. This is more common than it should be. Here's what you're actually entitled to and how to pursue it.

The difference between "no insurance" and "excluded damage"

These are two different situations with different remedies:

• No valid insurance at all: The carrier was operating without the minimum cargo insurance required by law. This is an FMCSA violation and the broker may share liability for hiring them.
• Insurance exists but excludes your damage: The carrier has a policy, but your specific damage type (hail, flood, acts of God, pre-existing condition claimed) is excluded. This is a coverage dispute, not fraud.

What the law requires carriers to carry

FMCSA regulations require auto transport carriers to carry a minimum of $5,000 per vehicle in cargo insurance, or $10,000 per incident. Carriers moving higher-value vehicles often carry $50,000–$250,000. The carrier's insurance certificate (COI) should have been provided to you or your broker before transport.

You can verify a carrier's insurance status at safer.fmcsa.dot.gov by searching their MC or DOT number and checking the "Insurance" tab.

If the carrier had no valid insurance

This is an FMCSA violation and the carrier is operating illegally. Your remedies:

• Sue the carrier directly — without insurance they are personally liable for your vehicle's damage. Small claims if under your state's limit; civil court for larger amounts.
• Go after the broker — brokers have a legal duty to verify carrier insurance before dispatching. If they failed to verify and sent an uninsured carrier, they share liability. File against the broker's surety bond (all licensed brokers carry one — minimum $75,000).
• File with the FMCSA — operating without required insurance is grounds for immediate authority revocation.
• Check your own auto insurance — some comprehensive policies cover transport damage, especially if your vehicle was a total loss. Call your insurer and ask specifically about transport coverage.

Filing against the broker's surety bond

Every licensed freight broker is required to carry a $75,000 surety bond (BMC-84 or trust fund). This bond exists specifically to protect shippers — that's you — from broker misconduct, including dispatching uninsured carriers.

To file a bond claim:

• Find the broker's bond information on their FMCSA record (safer.fmcsa.dot.gov → search broker → "Insurance" tab)
• Contact the surety company listed on the bond directly
• Provide documentation: contract, proof of payment, damage evidence, proof the carrier was uninsured or inadequately insured
• Bond claims are not automatic — you may need an attorney for larger amounts

If your damage type is excluded from coverage

Common carrier insurance exclusions include:

• Hail, flood, lightning, and other "acts of God"
• Scratches, chips, and paint damage (often under a deductible threshold)
• Mechanical failure unrelated to transport
• Damage to items left inside the vehicle
• "Pre-existing condition" (this is contested — see our damage claims article)

If your damage is genuinely excluded, you may still have recourse through your personal auto insurance or by demonstrating the carrier was negligent — negligence can override policy exclusions in court.

Document everything now

If you haven't already:

• Photograph all damage from multiple angles
• Get an independent repair estimate from a certified body shop (not the carrier's preferred shop)
• Pull your delivery Bill of Lading — was the damage noted before you signed?
• Request the carrier's insurance certificate in writing immediately