Insurance
LTL shipping typically involves multiple handoffs, transfers, and shared truck space. This increased handling elevates the risk of accidental damage, loss, or theft. With freight insurance, you’re not just insuring against unforeseen mishaps—you’re also securing peace of mind that your financial investment in your shipment is protected.
Insurance cost is 1% of the value you’re insuring (minimum $60).
Understanding the Difference: Freight Insurance vs. Carrier Liability
When shipping freight, it's crucial to understand the distinction between a carrier's standard liability and a separate freight insurance policy. Relying solely on one can leave you exposed to significant financial risk.
Standard Carrier Liability (Included by Default)
This is a limited form of protection that all carriers are legally required to provide. It's important to know that it is not full coverage and often falls short of the actual value of your goods.
- Limited Coverage: Compensation is based on the weight of the shipment, not its declared value (e.g., typically limited to $2 per pound or less).
- Strict Conditions: It only applies to loss or damage that is proven to be the carrier's fault. This means you must prove their negligence caused the issue.
- Numerous Exclusions: It does not cover damage caused by things outside the carrier's control, such as natural disasters, or improper packaging.
In short, carrier liability provides minimal protection and will likely not reimburse you for the full value of your goods in the event of damage, loss, or theft.
Freight Insurance (Optional but Strongly Recommended)
Freight insurance, is an optional policy that provides comprehensive protection by covering the full value of your shipment. It's the best way to safeguard your financial interests.
- Full Value Protection: It covers up to the full value you declare for your shipment (based on the commercial invoice or agreed-upon value).
- Comprehensive Coverage: It protects against a wide range of risks, including those not covered by carrier liability, such as theft, fire, natural disasters, or other unforeseen events, regardless of fault.
- Streamlined Claims Process: The claims process is often faster and more efficient because you don't need to prove carrier negligence.
For high-value, fragile, or time-sensitive shipments, purchasing freight insurance at the time of booking is strongly recommended.
Freight Insurance Can Help You Seek Compensation For:
- Obvious damage discovered upon delivery
- Concealed damage found after delivery
- Total loss of the entire shipment
- Partial loss of items within a shipment
How to Add Freight Insurance to Your LTL Shipment
Including insurance in your LTL shipment is easy and only requires the total value of your goods (matching your commercial invoice or purchase order). Our team is here to guide you through the process and answer any questions you may have about coverage and claims.
FreightSimple offers you the option to easily add insurance during the quoting process, and add it in CAD or USD currency. Insurance is automatically added to your quote once you select this option. You must ensure that the information you entered during quoting is correct, as insurance is based on this exact information.
Steps to Add Freight Insurance to Your LTL Shipment
Select Insurance at the time of quoting: Choose the option to add freight insurance when quoting your shipment.
Enter the Total Value: Provide the full value of your goods to ensure complete coverage.
For cross-border shipments, this should match the value on your commercial invoice
For domestic shipments, where no commercial invoice exists, use the Invoice (or more specifically, a Sales Invoice or Purchase Invoice.
Other common terms based on context:
- Receipt – if the purchase is completed and payment has been made.
- Purchase Order (PO) – if you initiated the order but haven't received the goods or final invoice yet.
- Proforma Invoice – a preliminary bill of sale sent before goods are shipped or delivered.
If you're unsure what declare value to use, our Support team can help confirm the right amount.
Select the Item Condition: Choose whether your goods are new or used.
Confirm with Our Team: If you have any questions about calculating or entering the insured value, our team is here to help ensure your shipment is fully protected.
Entering the Commercial Invoice Value
When insuring your cross-border shipment, it's essential that the insured value matches the amount on your commercial invoice.
Why This Matters:
- Insurance claims are validated against the commercial invoice you provide.
- If the declared insured value is higher than the invoice, the insurer may only approve a partial payout based on the documented value.
- If the declared value is lower than the invoice, you risk being underinsured, meaning you won’t be fully reimbursed if the shipment is lost or damaged.
Always use the exact value shown on your commercial invoice as your insured value when booking. This ensures your claim is processed smoothly and avoids disputes over reimbursement amounts.
What If I Don’t Have a Commercial Invoice?
If you're shipping within the same country (domestic), you likely won't have a commercial invoice — and that’s perfectly okay.
In these cases, declare the fair market value or replacement cost of the shipment. Examples include:
- Internal company transfers (use the internal transfer value or original purchase price)
- Personal items (estimate replacement cost)
- Domestic sales (use your sales invoice or sale price)
You’ll still be able to insure your shipment — just be ready to provide supporting documentation if a claim is filed.
If you unsure, contact our team before booking — we can help determine the best way to declare value and ensure you're properly covered.
Understanding Deductibles and Coverage Amounts in Freight Insurance
When insuring your shipment, it’s important to understand how deductibles work and how coverage amounts can vary based on the commodity type and condition (new vs. used). This helps ensure you’re making informed decisions and avoid surprises in the event of a claim.
What Is a Deductible?
A deductible is the amount that will be subtracted from any approved claim payout. It’s your portion of the financial responsibility in the event of a loss or damage. For example, if your shipment is insured for $10,000 and there’s a $500 deductible, the maximum claim payout would be $9,500.
Deductible amounts vary depending on:
- The type of insurance selected
- The declared value of the shipment
- The nature of the commodity (e.g., fragile goods vs. standard items)
New vs. Used Goods: Coverage Differences
Insurance providers often treat new and used items differently in terms of coverage value:
- New items are generally insured for full replacement value, based on invoice or declared value.
- Used items are often subject to depreciated value, or a maximum capped payout per pound or per item, depending on the insurer's terms.
Some carriers or insurers may also apply higher deductibles for used goods or limit coverage altogether for high-risk used items like electronics or machinery.
Special Commodities May Have Custom Rules
Certain commodity types—especially higher-risk or high-value items—may have unique coverage limits, deductibles, or conditions. For example:
- Artwork, antiques, or collectibles may have limited or no coverage unless properly documented and pre-approved.
- Perishable items are often excluded unless covered by specific temperature-controlled or specialty insurance.
- Fragile items like glassware or ceramics may carry higher deductibles or require specific packaging to be eligible for claims.
Always review your commodity’s eligibility and any specific restrictions before booking insurance. If you’re unsure, our Support team is happy to help clarify coverage options.
Packaging Requirements for Insured Freight
To ensure your freight qualifies for insurance coverage, it must be packaged securely according to carrier and insurer guidelines. Proper packaging protects your shipment and confirms it meets the standards needed for insurance eligibility. Freight that is determined to not have been packaged properly for transport may have its claim denied.
Key Points:
- Packaging Standards: Use sturdy boxes, crates, or pallets, and secure items to prevent movement. Include internal cushioning (e.g., bubble wrap, foam) to absorb shocks and protect items from damage.
- Carrier Inspection: Carriers inspect freight for packaging integrity. If packaging is deemed inadequate, they may refuse to move it or mark it "At Owner’s Risk."
- "At Owner's Risk" Status: When a carrier labels freight "At Owner's Risk," any insurance purchased becomes void. The shipment is no longer covered for loss or damage during transit.
Key Benefits of Insuring Your LTL Freight
- Greater Coverage for High-Value Shipments: If your shipment is particularly valuable, insurance can provide full value coverage in case of loss or damage, unlike limited carrier liability.
- Reliable Claims Process: Insurance claims are usually handled faster and are less restrictive than carrier liability claims, reducing disruption to your business.
Proper packaging ensures your freight is protected and eligible for insurance, giving you peace of mind throughout its journey.
Learn more about Properly Packaging your Freight
Still have questions about insurance coverage, deductible amounts, or what's included? Contact us at support@freightsimple.com or via Live Chat — we're here to help!