Car shipping insurance and carrier liability are two different things. A carrier’s liability usually depends on the carrier being at fault, and it is capped by international rules at an amount per kilogram, not by what your car is worth. Cargo insurance is a separate policy that pays for insured loss or damage under its own terms. For a valuable car, the gap between the two can be very large.
This guide explains the limits that apply by air and by sea, the main types of cargo cover, and the questions to ask before you accept an insurance quote. It is general information, not advice on a particular policy, so read the actual wording you are offered.
Why carrier liability is not enough for a valuable car
A specialist transport insurer describes liability cover as negligence-based and subject to limits set by convention or contract, while cargo insurance responds to insured events whoever was at fault. Another marine insurer notes that carrier liability is limited to an amount per unit of weight, not the value of the goods.
The limits are set in Special Drawing Rights (SDR), a unit defined by the International Monetary Fund.
By air. Under the Montreal Convention, the liability limit for cargo rose to 26 SDR per kilogram from 28 December 2024. ICAO puts this at about US$35 per kilogram.
By sea. Where the Hague-Visby Rules apply, the limit is 666.67 SDR per package or unit, or 2 SDR per kilogram of gross weight, whichever is higher.
What those limits mean for one car
Take a hypothetical car weighing 2,000 kg and worth US$400,000. These figures are illustrative only.
| Route | How the limit is calculated | Approximate maximum |
|---|---|---|
| Air, Montreal Convention | 2,000 kg x 26 SDR | 52,000 SDR, about US$70,000 |
| Sea, Hague-Visby Rules | Higher of 666.67 SDR or 2,000 kg x 2 SDR | 4,000 SDR, roughly US$5,400 |
The US dollar figures use ICAO’s own conversion of 26 SDR to about US$35 and will move with exchange rates. Even before questions of fault, exclusions and time limits, the carrier’s maximum sits far below the car’s value in both cases. That gap is what cargo insurance is for.
The three main types of cargo cover
Marine cargo policies are commonly written on the Institute Cargo Clauses, which come in three levels.
Institute Cargo Clauses (A). The broadest cover. The clause wording covers all risks of loss of or damage to the subject-matter insured, except as excluded by the exclusion clauses.
Institute Cargo Clauses (B). Named perils only, including those in (C) plus events such as earthquake or lightning, washing overboard and the entry of sea, lake or river water into the vessel or container.
Institute Cargo Clauses (C). A narrower list of major events, including fire or explosion, the vessel being stranded, grounded, sunk or capsized, collision, and jettison.
“All risks” does not mean every loss is paid. The (A) clauses themselves exclude ordinary wear and tear and loss caused by insufficient or unsuitable packing or preparation, among other things.
Exclusions that matter for cars
Policies differ, so read the one you are offered. One published cargo policy wording from a major insurer, for example, excludes paint damage, chipping, denting and scratching of second-hand goods, along with mechanical or electrical breakdown unless caused by an insured peril. The same wording values second-hand goods at the lower of the original purchase price or the second-hand replacement value, and applies a deductible to each loss.
For a used exotic car, those clauses matter. Ask specifically how paint damage is treated, how the car’s value is agreed, and what the excess is per claim.
Questions to ask before you accept a policy
- Which clauses is the policy written on: (A), (B) or (C)?
- What value is the car insured for, and how was it agreed?
- What is the excess per claim?
- Which stages are covered: collection, storage, loading, the main leg, unloading and final delivery?
- How are cosmetic damage and pre-existing marks treated?
- What condition records are needed to support a claim, and who produces them?
The last question links insurance to handling. Dated photographs and a signed condition report at each handover can make a claim easier to assess. Ask your provider what they record at collection and delivery. Our guide to choosing an exotic car transport company lists the condition records worth asking for.
How we approach insurance for luxury cars
Opera Shipping offers insurance options matched to the shipment for luxury and exotic car shipping. Ask us to set out the insured value, the excess and the stages covered alongside the freight quote, so you can see the whole picture before you book. Our guide to air freight car shipping costs also explains how to keep freight, insurance and government charges separate when comparing quotes. If you are still choosing between methods, our comparison of RoRo and container car shipping sets out how each one works.
Send the model, its approximate value, the route and your preferred method through our shipping quote form, and ask for the insurance terms to be included.