Cargo vs. Reefer Breakdown Insurance: Quick Guide for Truckers
Short, plain-English differences — plus what else you need to protect your rig, your loads, and your bottom line.
1) Cargo Insurance
What it covers: the goods you’re transporting if they’re lost, stolen, or physically damaged in transit — for example due to an accident, fire, or certain weather events (per your policy terms).
Example: You’re hauling a $150,000 load of electronics. A crash damages the shipment. Cargo insurance pays for the loss (up to limits and subject to deductibles/exclusions).
2) Reefer Breakdown Insurance
What it covers: spoilage of perishable cargo when your refrigeration unit fails due to a mechanical or electrical breakdown. This is not the same as general cargo coverage.
Example: You’re hauling frozen meat. The compressor fails and the load thaws. Reefer breakdown responds to spoilage caused by that equipment failure (subject to terms).
Quick Comparison: Cargo vs. Reefer Breakdown
| Feature | Cargo Insurance | Reefer Breakdown Insurance |
|---|---|---|
| Primary Purpose | Protects the load from physical loss/damage (theft, accident, fire, some weather). | Protects perishable cargo from spoilage caused by refrigeration unit breakdown. |
| Typical Trigger | Collision or covered peril that damages the goods. | Mechanical/electrical failure of reefer equipment leading to temperature loss. |
| Common Exclusions | Inherent vice, poor packaging, certain weather/events, contractual liability, etc. | Driver temperature setting errors, lack of maintenance, gradual deterioration, pre-existing spoilage. |
| Who Needs It? | Most motor carriers and owner-operators hauling any freight. | Anyone hauling food, pharma, or other temperature-sensitive loads. |
Bottom line: If you run reefer loads, you likely need both cargo and reefer breakdown to stay fully protected.
Other Must-Have Policies for Truckers
Commercial Auto (Primary Liability & Physical Damage)
Responds to liability for injuries/property damage you cause and covers your rig for collision/comprehensive losses.
General Liability
Protects your business for non-auto risks (e.g., a visitor injury at your yard or office).
Workers’ Compensation
Medical bills and lost wages if employees are injured on the job (state requirements apply).
Bobtail / Non-Trucking Liability
Liability protection when you’re off dispatch or driving without a trailer.
FAQ
Is reefer breakdown automatically included in cargo insurance?
No. It’s commonly excluded unless added via endorsement. Always review your declarations and endorsements.
How much cargo limit do I need?
Many shippers require $100,000, but high-value freight may need higher limits or special terms. Match limits to the value of loads you haul.
How can I avoid claim denials on reefer spoilage?
Keep service/maintenance records, calibrate sensors, log temperatures, and verify set points at pickup and en route.
