Reefer insurance, also known as reefer breakdown insurance, covers losses to refrigerated goods caused by a breakdown of the refrigeration unit.
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Why You Need Reefer Insurance
Trucker’s cargo liability insurance (discussed in a separate article) does not always include coverage for perishable goods damaged or destroyed by a breakdown of the refrigeration unit. For this reason, if you have a refrigeration unit and haul such goods, check your cargo liability policy carefully and discuss with your broker; if this policy does not include reefer coverage you must buy it separately.
A refrigeration unit can break down for a number of reasons. A collision obviously can cause damage, as can lack of proper maintenance, especially on an older unit. Some goods, such as pears or apples, might survive fine for some period of time; some goods, such as seafood or ice cream, might not. Another issue can be goods that were shipped at a time when they were beyond peak freshness and spoil even though there was no problem with the refrigeration unit itself.
A typical limit, the maximum amount the insurer will pay, might be $250,000, though policies vary. The amount of coverage you want will also vary from load to load — if you are carrying especially valuable goods, you might want to increase your limits.
- One-time increased limits can be arranged. Call your broker prior to taking delivery of the goods and arrange for higher limits for that particular load.
- Shipper-required limits: some shippers, especially those who deal in expensive goods, will have a minimum requirement for you to have on your cargo coverage. Again, a one-time limit can be arranged if necessary.
Deductibles and Exclusions
As with all insurance policies, deductibles will apply; $1,000 is common. The lower the deductible, the higher the premium (monthly payment) for your policy will be. Also, some reefer policies exclude coverage for certain types of goods. Be sure to read your policy and discuss what coverage you need with your broker. If you do not haul particularly expensive goods, you might not be concerned about certain exclusions and can save on your premiums.
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