According to IBIS World, the car hauling industry did 12 Billion in 2019 across trucks, ships, and rail auto transporters. With the demand for car haulers is expected to remain high for the foreseeable future, many truckers are eager to get into the industry. For those that do, the correct insurance coverage is crucial.
Car haulers need commercial truck insurance that combines multiple policies including liability, physical damage, and cargo insurance for the valuable freight they transport.
If you're just looking for a few recommendations, here are our top picks for car hauler insurance.
A car hauler is a vehicle that is used to transport cars from one location to another. Car haulers can be either open or enclosed, single level or multiple, and they are typically equipped with ramps or lift gates to make loading and unloading cars easier.
Car haulers are also referred to as car-carrying trailers, auto haulers, and auto transporters.
While there is no “standard” size car hauler, depending on the truck and trailer setup, car haulers can transport anywhere from a single vehicle up to eleven.
However, as electric and hybrid vehicles have increased in popularity, weight can now be the limiting factor rather than the size of the trailer. The battery on hybrid and electric vehicles adds significant weight so car haulers are sometimes unable to fully load their trailer without exceeding federal weight limits.
In 1982, Congress passed the Surface Transportation Assistance Act, which stipulates that states are not allowed to impose a length limitation of less than 65 feet for traditional auto transporters (5th wheel located on tractor frame over the rear axle) or less than 75 feet on stinger-steered transporters.
Compared to tow trucks, car haulers are designed to transport vehicles over longer distances and depending on the truck and trailer setup, can transport more vehicles at one time.
Individuals moving their own vehicles for personal use will likely not need commercial car hauler insurance but should confirm with their insurance company that the vehicle being towed is covered in case of an accident.
Any commercial truck that plans on transporting vehicles will need car hauler insurance. These business can include but are not limited to:
Pickups or dually trucks are often used when transporting a few vehicles at a time but semi trucks with larger trailers are also quite common.
Car haul trailers come in a wide variety of setups but they can generally be broken out into three types:
Car hauling typically pays better than dry van trucking but it also comes with additional risk and driver stress. Common risks when car hauling include:
Hauling heavy cargo is also more dangerous because it is more difficult to turn or stop. In the event an accident does occur, the damages will likely be worse.
Multi-level trailers can also be top heavy and increase the risk of the car hauler tipping in a bad accident.
Like all commercial truckers, the federal law requires car haulers to carry at least $750,000 in primary liability insurance. Beyond primary liability insurance, motor carriers hauling cars will want to need additional coverage options such as physical damage and cargo insurance.
Cargo insurance for car haulers is non-negotiable. Because the trailer size and types of vehicles being transported can vary widely, cargo coverage requirements can be anywhere from $100,000 to millions of dollars.
Most cargo insurance policies do not cover cargo while it is being loaded and unloaded. When trucking companies are responsible for high-ticket items such as automobiles, loading and unloading insurance is recommended.
Although not required by law, motor carriers will want to make sure they properly insure their car haulers in the event of an incident. Collision damage coverage will only cover accidents while driving the vehicle so most opt for comprehensive coverage.
While physical damage coverage protects the power unit, usually a pickup or semi, trailer insurance covers any damage to the trailer unit. Any damage the trailer causes in an accident will be covered by the primary liability policy.
Other basic insurance coverage options include:
While car haulers and tow truck operators both involve transporting vehicles, they do not always require the same insurance policies. Two coverage options which tow trucks will require but car haulers typically won’t include:
Car hauler insurance can cost anywhere from $800 a month to upwards of $1,500 a month. Like all commercial truck insurance, it will vary based on a number of factors including:
Car hauler insurance can be more expensive compared to other types of truck insurance because the cargo is more expensive than most alternatives and the increased weight with hauling cars also increases the risks.
Auto haulers looking for cheap car hauler insurance should keep in mind that opting for the “budget option” is not always advised because if an accident does happen, the most important thing is having enough coverage. However, carriers can find the best deal by utilizing the following strategies:
Motor carriers looking for car hauler insurance should look for providers that specialize in trucking and have specific experience with car haulers.
As mentioned above, carriers should compare prices from multiple carriers to get a sense of price but to also see what policy options are available and what exclusions each company might have.
Additionally, carriers should research each insurance provider option online to see reviews from past customers. While most insurance reviews will be polarizing, it can still be helpful to see what complaints customers consistently have. Complaining about an online portal can be frustrating but it’s preferable to complaints that insurance claims are not getting paid out.
Car hauling can be very profitable for the right business owner. While the rates can be higher than other types of trucking, the expenses and risks are also greater. In general, trucking is a low margin business so operational proficiency is key.
Not all car haulers will need a CDL but it is very difficult to find employment with or lease onto a car hauling company. Most car haulers without their CDL will need to know the industry and operate under their own authority.
Car haulers can find loads any number of ways but car hauler load boards are the most popular. Other options include freight brokers, working with a dispatcher, and forming direct relationships with shippers.