Do You Need Auto Insurance When Shipping Your Car?

The quick answer is no. All shipping companies are legally required to provide basic liability insurance under the United States Department of Transportation (USDOT). If your car is on the roads, it must be insured (except in New Hampshire and Virginia). This means that if you are shipping your car by plane, train, or auto transport truck, you are not required to have personal auto insurance on your vehicle. If you are shipping it via car driver, however, you will be required to have insurance.

Why You Shouldn’t Transport a Car Without Insurance

While personal auto insurance is not required to ship your car, many shipping companies hold very minimal insurance. Some companies offer full coverage; others do not. Personal auto insurance gives you backup coverage for the damages your shipping company may not cover.

If your shipping company states that it does not offer insurance options, you should choose a different shipping company; it may not be reliable or compliant with the law. Shipping your vehicle without any insurance is a dangerous gamble. Whether you are shipping to a neighboring state, across the country, or overseas, there is always a risk of loss or damage. You can avoid the stress of covering the cost of these losses or damages by making sure your carrier is properly insured.¹

Types of Auto Transport Insurance

Shipping your car can be a confusing task, but understanding the different types of auto transport insurance can make the process a little easier.

• Customer: “Customer insurance” is another term for the personal auto insurance required for vehicles in every state except New Hampshire and Virginia. While customer insurance is optional for shipping your car, it can be helpful for backup coverage. Auto transport is not typically included in personal insurance plans, but it’s a good idea to buy supplemental coverage through the auto insurance company that insures your vehicle.
• Carrier: USDOT requires shipping companies (carriers) to have liability coverage. This coverage is very minimal, so many companies offer supplemental insurance as well.
• Broker: Brokers sell you the shipping with insurance as an add-on option. Brokers act as middlemen between customers and carriers — they coordinate shipments using multiple carriers within a network, working with many different companies across the country. You should be cautious when working with brokers, as it is not direct communication with the company that will be insuring your vehicle.

Auto transport insurance coverage varies by company. While some companies will cover your vehicle for any damage, some car-shipping companies only cover damages from car transport. Still, here is what’s usually covered and not covered when it comes to auto transport services.

What Auto Transport Insurance Covers

• Damage that occurs while loading, transporting, and unloading your car
• Basic damages such as scratches, fire damage, and theft
• Insurance of the vehicle itself

What Auto Transport Insurance Does Not Cover

• Damages due to natural disasters, civil unrest, or weather

Damages due to your car being in poor shape when shipped, such as leaking oil or loose parts
Personal items inside your vehicle

We recommend cleaning out your car before shipping it. If you want to ship your car with personal belongings, we recommend purchasing supplemental cargo insurance.

Learning the auto transport vocabulary is an important step in ensuring a smooth shipping experience.

• Carrier: The auto transport carrier is the company that transports your vehicle. Auto transport carriers have many other names, such as auto haulers, car shippers, car carriers, and transport carriers.
• Broker: An auto transport broker is a person who connects you with a carrier. They don’t actually ship your car; rather, they act as the middleman between you and the carrier.
• Supplemental: This is another word for “additional” or “extra.” In terms of auto transport insurance, an example of supplemental coverage would be cargo insurance, which insures the personal items inside your vehicle.
• Licensed carrier: Carriers need licenses to transport your car. Do not work with any unlicensed carriers. You can find out if a carrier is licensed by cross-checking the company information on the Federal Motor Carrier Safety Administration (FMCSA) website.
• MC number: This is the motor carrier number from the FMCSA, which gives auto transport companies the authority to operate and transport cargo across state lines.
• USDOT number: The U.S. Department of Transportation number works as a monitor to track the transport company’s safety information. The information cannot be deleted, and anyone can look at the company’s history on the FMCSA website. You can use this number to do a background check on an auto transport company before you commit to working with it.

Cost of Auto Transport Insurance

The cost of auto transport insurance is usually included in the quote from your shipping company.

Auto transport companies are responsible for shipping your vehicle safely. If damage to your car occurs, the company may be liable. It is important to inspect your vehicle and take photos of it before you ship it in order to account for any damage already there.

If you notice any damage after shipping, contact the shipping company and your insurance provider immediately.² The shipping company should fix the issue quickly, and your insurance should cover the cost.

Unfortunately, people all around the world make money by scamming people who are looking to relocate and transport their vehicles. We’ve put together a few tips to help you identify a scammer.

How to Identify an Auto Transport Scammer

The research you do on a company before you decide can make or break your auto transport journey. Follow these steps to choose a reliable company:

1. Make sure the company is using an email address that matches up with its website instead of, say, a Gmail or Outlook address. Most legitimate companies have the name of their company after the @ symbol.
2. Put the company’s name into a search engine. You can find a lot of information about companies through their reviews on websites like Yelp and the Better Business Bureau.
3. Make sure the URL at the top of the company’s webpage matches the name of the company. Many scammers copy and paste other companies’ websites and give them new names.
4. Check the company’s USDOT number listed on its website. Then look up the name of the company on the FMCSA website.³ The number that the FMCSA lists it under should match the number on the company’s website. Note that some companies are not required to have USDOT numbers; instead, they will have state carrier numbers.
5. Cross-check other information on the company’s website with its FMCSA page. Verify the company’s name, address, phone number, state carrier ID number, and operating status. Its operating status should be listed as “ACTIVE.” Avoid companies that are listed as “Inactive USDOT Number,” “NOT AUTHORIZED,” or “OUT OF SERVICE.”
6. Never send money using an untraceable method such as Western Union or MoneyGram.

How to Check an Auto Transport Company’s Insurance

1. Google “FMCSA Company Snapshot.”
2. Type in the name of the company and the USDOT number or MC number listed on its website.
3. Once the search results appear, click on the name of the company.
4. In the upper right-hand corner, there will be a blue box that says “SMS Results” and “Licensing & Insurance.” Click on “Licensing & Insurance.” From here, you will be able to see whether the company’s insurance is up to date, invalid, or pending.

Whether you are shipping your car by auto transport truck or car driver, being properly insured and picking a legitimate company will help the process run smoothly. While no one ever wants damages or fraud to happen, preparing for the worst sets you up for a successful journey.