Recently a truck filled with 44,000lbs of Beer was stolen from a truck stop. The poor driver was distraught, not about the loss of beer, but the fact he had just bought the truck a mere 3 weeks prior.
"I don't mean to cry about it,” said Van Thomas through tears. “I'm just trying to do the best I can and make a better life.”
Anyone in this position would probably feel the same way. So what does the driver do next? He calls his insurance agent and files a claim. Depending on his coverage he will either feel a sense of relief or added distress.
So what type of coverage does the driver need to ensure his loss will be indemnified?
Since the driver turned out to be the owner of the truck he would need an Auto Physical Damage policy. The physical damage policy will reimburse the owner to the actual cash value of the tractor. Keep in mind, some Physical Damage policies exclude theft. It is extremely important to read the exclusions in your policy before purchasing this type of coverage.
How does the driver recuperate the loss of the Cargo; in this case, the Beer?
A Motor Truck Cargo policy would be responsible for the loss of the driver’s load. It is always important to know the value of your loads to ensure you have enough coverage in the event of a loss. In this case the Beer was valued at $40,000. Had the driver had a policy limit that was less than the value of the beer, then he would be on the hook for the remainder of the loss. Also, it is important to make sure that your MTC policy does not exclude reefer exposure. Had the driver policy excluded reefer loads than he would have to pay this loss out-of-pocket.
What if the truck had a GPS or a vehicle tracking system installed?
Tractors that include a vehicle tracking system have a significantly greater chance of recovery. It may be a costly investment, but the benefits in the long run will pay dividends. For example: Insurance companies will apply premium credit to Truck policies if the vehicles include a tracking system. Also, when a vehicle is stolen they are more likely to be recovered, which will mitigate the cost of the total loss. Then in long the long run your loss ratio is better and you are a more attractive risk to a potential
insurance company.
This blog post is not intended to be exhaustive nor should any discussions or opinions be construed as legal advice - it is intended for educational and/or informational purposes only.
