What is auto transport insurance?
Posted on 8/31/2026
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Your car is a vital part of your daily life, and a major financial investment. Handing over the keys and watching it ride away on a trailer can be a worrisome experience. Fortunately, you can take comfort in knowing that the auto transport industry requires strict insurance coverage to safeguard your asset.
Auto transport insurance protects your vehicle against damage or theft while it is in the possession of a transport company, from the moment it is loaded onto the trailer to the final delivery.
Understanding how this coverage works, who provides it, and where the boundaries lie will give you peace of mind during your car shipping experience.
Who provides insurance and how it works
Legally, all auto transport companies must carry insurance. This policy is paid by the hauler (the motor carrier driving the truck) and serves as your primary line of defense. A standard carrier policy is generally at least $100,000 and includes:
- Cargo coverage: Protects the shipped cars against theft, fire, or damage while on the trailer.
- Liability coverage: Pays for property damage or injuries if the carrier's truck causes an accident.
What does the carrier's auto liability insurance cover?
Federal law requires all auto transport carriers to carry commercial automobile liability insurance to operate on public highways. This coverage protects against major road hazards and carrier negligence.
Generally, a vetted carrier's insurance policy covers:
- Accidents caused by other drivers: Collisions on the highway where the transport truck is involved.
- Minor scratches during loading/unloading: Scrapes or structural damage caused by the carrier's equipment or ramps.
- Theft or vandalism: Criminal damage or vehicle theft while stored on the trailer (incredibly rare, but fully covered).
- Severe weather events: Major damage resulting from unforeseen hail, lightning, or severe storms while in transit.
Note: Damage caused by microscopic road debris (like tiny rock chips kicked up from asphalt) is occasionally excluded by standard open-carrier insurance templates. If you are shipping a luxury, exotic, or classic vehicle and want absolute protection from elements like road debris and weather, we highly recommend upgrading to an enclosed trailer.
Montway's $250,000 contingent cargo insurance
At Montway, we believe safety shouldn't be a premium upgrade. We maintain an independent Contingent Cargo Insurance policy, included in your shipping price as part of standard company policy. This affords additional protection up to $250,000 should the motor carrier and/or their primary insurance provider fail to fully cover a valid transport cargo claim.
Personal auto insurance: the second layer
Your standard personal auto insurance policy acts as a secondary layer of protection. Depending on your provider, your coverage may stay active while your car is in transit. It typically kicks in only if the carrier’s coverage has a rare gap or reaches its total policy limit.
The Montway broker advantage
It’s important to remember that Montway Auto Transport is an auto transport broker, not a carrier. Brokers do not own or operate the physical trucks. While we work very closely together, there are differences between a broker and a carrier. A broker like Montway serves as your advocate, streamlining the entire shipping process. Adding to our value is our carrier vetting process. We ensure that every carrier in our nationwide network holds the proper credentials, insurance, and safety records to ensure the safety of your vehicle.
Types of car shipping insurance and costs
Frequently Asked Questions (FAQ)
Does your car need to be insured to ship?
No. Personal vehicle insurance is not legally required to ship your car, but keeping your policy active is recommended. Even if your car is uninsured or unregistered, it will still be fully covered by the motor carrier’s cargo and liability insurance policies while on the road.
Is it worth getting additional car shipping insurance?
It depends on the value of your vehicle and your desired level of comfort. If you’re shipping a high-value luxury or classic car, or simply want total peace of mind, you could purchase Montway's assurance policy.
Does insurance affect car shipping prices?
No. By law, all legitimate car haulers must maintain primary liability and cargo insurance, so you won’t see an extra line item or fee just for standard protection.
What happens if my car is damaged during shipping?
In the rare event of damage, note the issues clearly on the Bill of Lading (BOL) during your delivery inspection before signing it. Our dedicated support advisors will then step in to help you file a claim directly against the carrier's primary insurance policy, backed by our contingent coverage safety net.
Does insurance cover personal items inside the car?
No. Auto transport insurance strictly covers the vehicle itself, not household goods or loose items left inside the cabin. While Montway allows you to place up to 100 lbs of luggage inside the trunk as a courtesy, these items are shipped entirely at your own risk and are not covered by cargo insurance. Never ship electronics, valuables, or important documents.
Do I need extra insurance for expensive vehicles?
Standard carriers typically carry between $100,000 and $250,000 in cargo insurance. If your vehicle is valued higher than $250,000, let your Montway advisor know ahead of time. We will specifically match your order with a specialized enclosed carrier holding a high-tier insurance cap matching your vehicle's exact appraisal value.
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