Auto Transport Insurance: What's Actually Covered (And What Isn't)

"Your car is fully insured during transport" — brokers say this constantly. It is technically true, but what that insurance actually covers is far narrower than most people assume. Here is what is covered, what is not, and how to make sure you are protected before handing over your keys.

The two types of insurance in auto transport

Cargo insurance (the carrier's)

The carrier — the trucking company that physically moves your vehicle — is required by federal law to carry cargo insurance. This is the insurance that covers physical damage to your car during transport. The minimum required by FMCSA is $5,000 per vehicle or $10,000 per occurrence for household goods carriers; auto transport carriers typically carry more, but minimums vary.

You can verify a carrier's insurance by looking up their DOT number at safer.fmcsa.dot.gov and checking their insurance filing status. Active insurance is listed there.

The broker's surety bond (not cargo insurance)

Brokers are required to hold a $75,000 surety bond — but this is not cargo insurance. The surety bond protects against broker fraud or failure to pay carriers. It does not cover damage to your vehicle. This distinction matters because many brokers emphasize their bond when customers ask about insurance, which is misleading.

What cargo insurance typically covers

• Physical damage to your vehicle caused by the carrier during loading, transport, or unloading
• Damage from accidents, fire, or collision during transit
• Damage from improper securing of the vehicle on the carrier

What cargo insurance typically does NOT cover

• Personal items inside the car. Electronics, clothes, documents, tools — none of it. This is almost universally excluded. Remove everything.
• Pre-existing damage. Anything documented on the pickup Bill of Lading condition report is your problem, not the carrier's.
• Mechanical or electrical failures. If your transmission fails during transport, cargo insurance does not cover it — there must be physical external damage.
• Acts of God. Hail, flooding, fallen trees — most cargo policies exclude natural events. Some higher-coverage policies include these, but you must ask specifically.
• Undisclosed pre-existing damage. If you had damage you failed to note at pickup, the carrier will use this against you.

Your personal auto insurance: often overlooked

Call your auto insurance carrier before shipping. Many comprehensive auto insurance policies cover your vehicle during transport — you are already paying for this coverage. If your policy covers it, you have a second layer of protection and a familiar claims process.

Ask your insurer specifically: "Is my vehicle covered for physical damage during auto transport by a third-party carrier?" Get the answer in writing if possible.

Declared value and coverage gaps

Some carriers offer additional declared value coverage — for an extra fee, they will cover your vehicle up to a stated value rather than their standard cargo policy limits. This is worth considering for high-value vehicles. Ask about it when booking and get it in writing.

For vehicles worth more than $50,000 — classic cars, exotics, collector vehicles — you should strongly consider enclosed transport with a carrier that provides documented high-value coverage. Verify the coverage limit against your vehicle's actual value.

How to make a claim if your car is damaged

See our full guide on damaged vehicles, but the key points: document damage at delivery before signing a clean BOL, notify the carrier in writing within 15 days, and provide your repair estimate. Under the Carmack Amendment, you have up to 9 months to file a formal claim.