Reefer Breakdown Coverage & Refrigerated Truck Insurance

Published 8/4/2022

Reefer trucks are used to transport temperature-controlled commodities that generally pay better than hauling dry freight. However, refrigerated trucking also comes with additional expenses such as reefer insurance.

Since the Food Safety Modernization Act was passed by the FDA in 2011, there has been a greater focus on safety risks that can occur when food is not properly refrigerated.

While the Act was designed to reduce the spread of illness such as salmonella, reefer insurance rates have also gone up as stricter temperature controls are now in place for hauling refrigerated goods.

If you're just looking for a few recommendations, here are our top picks for refrigerated cargo insurance.

Best Overall
Recommended for new trucking companies
Recommended for larger fleets
By clicking “Get Quote” or calling you will go to our partner, CommercialInsurance.net.  They make it fast and easy for businesses to get matched to insurance providers who fit their specific needs.  The providers above may not be one of the providers in their network at this time.
About the author
Scott Elgin of Elgin Trucking & TruckInfo.net
Scott Elgin has been in the trucking business since 1982, acting as both a motor carrier and a freight agent at Elgin Trucking Co. During this time, he has overseen thousands of units servicing the entire continental United States.
A refrigerated truck, also known as a reefer
A semi truck with a refrigerated trailer

What is Reefer Breakdown Coverage?

Reefer breakdown coverage is an insurance endorsement that protects motor carriers against refrigerated cargo spoilage when the refrigeration unit has a mechanical or equipment failure.

Reefer breakdown coverage does not typically cover refrigerated cargo spoilage from the following:

  • Driver Negligence
  • User Error
  • Delays
  • Other Incidents

Reefer breakdown insurance is different from broader “spoilage coverage,” which protects against cargo spoilage for any reason.


Is reefer breakdown an endorsement?

Reefer Coverage is an endorsement that is added onto a motor truck cargo insurance policy. 

While cargo insurance can come as a standalone policy, most carriers include it as part of a complete commercial truck insurance policy.

How does reefer coverage work?

Reefer coverage is not required by law, but most shippers and brokers will require it for carriers transporting refrigerated goods. 

The policy will cover the cost of replacing cargo up to the policy limit as defined in the insurance contract and may also cover expenses related to disposing of spoiled cargo.

The policy will not cover repair or replacement of the truck’s refrigeration system.

Who needs reefer insurance?

Reefer breakdown coverage is for anyone hauling refrigerated goods such as:

  • Refrigerated foods
  • Frozen foods
  • Medicine & medical supplies
  • Cosmetics
  • Plants & flowers
  • Other temperature sensitive goods

Reefer breakdown insurance is required for a variety of vehicle and trailer types, including:

  • Semi trucks that haul “refrigerated trailers”
  • Reefer box trucks
  • Refrigerated vans
  • Pickup trucks with a reefer unit installed in the bed of the truck or hauling a trailer with a reefer unit (most common in hot shot trucking)

Reefer Breakdown Coverage Limits

While reefer breakdown coverage limits will vary depending on the policy, most shippers and brokers will require a minimum of $100,000 in cargo insurance coverage.

While a higher policy limit may seem better, it will come with higher premiums because the insurance company is taking on increased risk in the event of a claim. 

Instead, it is better to select the lowest policy limit that still covers the maximum value of cargo being transported. This will save money on premiums while still providing full coverage if something goes wrong.


Common Exclusions

As covered earlier, reefer coverage only covers cargo spoilage from a refrigerated unit that fails. It doesn’t cover delays, user error, driver negligence, or other incidents.

Many basic policies will exclude certain items, so trucking companies should confirm with their insurance provider that the reefer endorsement covers the types of cargo they carry. These can usually still be insured, but it will cost extra. 

Common exclusions in basic policies can include:

  • Meat
  • Seafood
  • Pharmaceuticals
  • Tobacco Products

Some insurance companies also try to avoid paying out claims with restrictive policies. Common tactics can include:

  • Proof that the spoiled cargo is from the refrigeration system failing
  • Not insuring spoilage by excluding specific parts of the refrigeration system such as sensors
  • Excluding reefer units over a certain age
  • Requiring that reefer units are regularly maintained with proper documentation

Reefer Breakdown Coverage Cost

Reefer breakdown coverage is usually included in a broader cargo insurance policy. For a reefer truck with a policy limit of $100,000, premiums are usually around $10,000 to $15,000 per year.

Like all insurance policies, cargo insurance will vary widely by truck type, size, driver history, policy limit, deductible, cargo hauled, and area/range of service.


Cheap Reefer Coverage

Motor carriers should consider the following when looking for cheap reefer breakdown coverage:

  • Opt for the lowest policy limit that still meets the requirements of the shippers/brokers and covers the value of the refrigerated cargo
  • If a trucking company does not haul cargo that is commonly excluded, such as meat or medicine, then they should not opt for additional coverage on those items
  • Opting for higher deductibles can also help carriers save on monthly premiums but trucking companies will pay more out of pocket in the event of a claim
  • Some insurance providers will offer discounts if the annual premiums are paid upfront

Ultimately, shopping around and comparing quotes with multiple insurance providers is the best way to find cheap coverage. 

Once a policy is in place, carriers can avoid expensive claims by maintaining refrigeration equipment with regular inspections. Keeping a maintenance and inspection log can also help if a claim does arise.

What Insurance Coverage is Mandatory for Reefer Trucking?

Refrigerated trucks will require the same basic truck insurance policies that are required for all commercial trucks. These policies include:

Primary Liability Insurance

Covers motor carriers from liability if any transported goods are damaged. Refrigerated motor carriers will want to add the reefer endorsement. Loading and unloading isn’t typically covered under most policies but can also be added as an endorsement.

Motor Truck Cargo Insurance

Covers motor carriers from liability if any transported goods are damaged. Refrigerated motor carriers will want to add the reefer endorsement. Loading and unloading isn’t typically covered under most policies but can also be added as an endorsement.

Physical Damage Coverage

While not required by law, most motor carriers will want to opt for physical damage coverage to cover their truck in case of an incident. There are two types of physical damage coverage:

  • Collision – Covers any damage in the event of an accident.
  • Comprehensive – Also covers damage outside of an accident. For example, if a tree branch falls on the vehicle and dents the hood or cracks the windshield.

Medical Insurance

Provides medical coverage to the reefer driver and their passengers.

Under/Uninsured Driver Insurance

Provides coverage in case a 3rd party at fault has inadequate insurance coverage.

Additional Trucking Insurance Policies

Depending on the motor carrier and whether or not they haul refrigerated goods on trailers they do not own, they may want to add either of the following:

  • Trailer Interchange Coverage – Provides coverage for a 3rd party’s trailer while in the policy holder’s possession (attached to the tractor or not). Only applies when a written agreement is in place with the trailer’s owner.
  • Non-owned Trailer Insurance – Similar to a trailer interchange except that a written contract is not required. However, coverage only applies to trailers that are attached to a semi truck.

How to Find the Best Refrigerated Truck Insurance

Motor carriers looking for trucking insurance should look for providers and insurance agents that specialize in trucking and have specific experience with reefer cargo insurance.

Carriers should compare prices by getting quotes from multiple providers before making a final decision. However, it is important to note that the cheapest option is not always the best option. It’s important to research the reputation of insurance companies online before making a final decision. 

The National Association of Insurance Commissioners keeps an online database of complaints, which helps make apple-to-apple comparison across providers. Google, Yelp, and the BBB can also be helpful but are easier for companies to manipulate. 

Lastly, it is important to read the fine print and watch out for unreasonable exclusions that could prevent a successful claim.

Best Overall
Recommended for new trucking companies
Recommended for larger fleets
By clicking “Get Quote” or calling you will go to our partner, CommercialInsurance.net.  They make it fast and easy for businesses to get matched to insurance providers who fit their specific needs.  The providers above may not be one of the providers in their network at this time.
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