How Contingent Cargo Coverage Can Help New Authority Truckers and Owner Operators Save Thousands on Trucking Insurance

Contingent cargo coverage is one of the best-kept secrets in the trucking insurance world, but it can save new authority truckers and owner operators thousands of dollars on their policies. If you're running a hot shot or bobtail operation, this coverage is essential to keeping your costs down.

What is Contingent Cargo Coverage?

Contingent cargo coverage is a type of insurance that protects you if the shipper or broker's primary cargo insurance fails to cover a claim. Let's say you're hauling a load for a large retailer, and their cargo policy has a $100,000 limit. If you get in an accident and the load is damaged or destroyed, their insurance would cover the first $100,000. But what if the value of the cargo is $150,000? That extra $50,000 is where your contingent cargo coverage would step in.

Without it, you'd be on the hook for that additional $50,000 - a cost that could put you out of business if you don't have the proper protection. Contingent cargo is essentially a backup plan to keep you covered when the shipper's insurance falls short.

How Much Does Contingent Cargo Coverage Cost?

The cost of contingent cargo coverage varies depending on the size of your operation, the value of the loads you're hauling, and your overall driving record. But on average, you're looking at an additional $500 to $1,500 per year to add this coverage to your policy.

For most new authority truckers and owner operators, that's a small price to pay for the peace of mind and financial protection it provides. Considering a single $50,000 cargo claim could wipe out your profits for an entire year, the cost of contingent cargo is negligible in comparison.

What Happens if You Don't Have It?

If you don't have contingent cargo coverage and a claim exceeds the shipper's primary limits, you'll be personally responsible for paying the difference. That means your own assets - your truck, your savings, even your home - could be at risk.

Many new authority truckers and owner operators make the mistake of skipping this coverage to save a few bucks upfront. But it only takes one accident to realize how costly that decision can be. Without contingent cargo, you're leaving yourself wide open to financial ruin.

Why Contingent Cargo is a Must-Have for New Authority Truckers and Owner Ops

Here are a few key reasons why contingent cargo coverage should be a non-negotiable part of your trucking insurance policy:

1. Protects Your Bottom Line: As mentioned, a single large cargo claim that exceeds the shipper's limits could wipe out your profits for the year. Contingent cargo coverage ensures you're not stuck footing the bill.

1. Satisfies Broker/Shipper Requirements: Many brokers and shippers now require contingent cargo coverage as a condition of doing business with you. If you don't have it, you could miss out on lucrative loads and opportunities.

1. Covers Bobtail and Non-Trucking Use: Contingent cargo extends beyond just the loads you're hauling. It also protects you if something happens to the cargo while your truck is parked or in non-trucking use.

1. Keeps Your Primary Liability Rates Low: By having this extra layer of protection, your primary liability rates may actually be lower than if you didn't have contingent cargo coverage.

The bottom line is, contingent cargo coverage is a must-have in today's trucking landscape, especially for new authority truckers and owner operators. It's a small investment that can save you thousands in the long run and protect your business from financial ruin.

Questions about your trucking insurance? Call or text 541-681-8793 or visit GetBigRigInsurance.com.