Refrigerated truck insurance has to deal with three separate things: the truck, the refrigeration unit bolted to it, and the load that unit is keeping cold. A fridge failure on a hot afternoon can leave the truck untouched and the load worthless, and a standard motor policy is not built for that loss. If you run reefers, start by checking how your refrigerated truck insurance treats each of the three, because each is insured differently and each carries its own conditions.
Three Things to Insure, Three Different Covers
- The truck or trailer. The motor policy deals with accidental damage, fire, theft and your liability to other road users. It is written on the vehicle, usually including the insulated body.
- The refrigeration unit. The unit can form part of the vehicle’s insured value, but a motor policy typically responds to the unit only when it is damaged in an insured event such as a collision or a fire. Mechanical or electrical failure of the unit itself is generally a breakdown question, not a motor one.
- The load. Goods on board sit under goods in transit or carriers liability cover. Deterioration of those goods because the temperature moved is usually an extension to that cover, not something it includes automatically.
It is easy to assume one policy reaches all three. It rarely does.
When the Fridge Unit Breaks Down
A compressor seizes or a controller fault shuts the unit down. The truck keeps driving and nothing has hit anything. Under a motor policy, that is breakdown, and breakdown is generally excluded.
Cover for the unit’s own failure, where it is available, typically comes through a machinery breakdown section or a specific extension for refrigeration plant. Our guide to machinery breakdown insurance explains how that kind of cover is structured. Points to check:
- Whether the unit is listed as a separate item with its own sum insured, or folded into the vehicle value.
- Whether the cover pays for repair of the unit only, or also for the resulting loss of stock.
- What excess applies, and whether it is a monetary excess, a time excess or both.
- Whether wear and tear, gradual deterioration and lack of servicing are excluded, which they commonly are.
Deterioration of Stock: How the Extension Works
Deterioration of stock, sometimes called spoilage cover, pays for goods that perish or lose value because their temperature changed. It typically sits on the goods in transit or carriers liability policy rather than the motor policy. Our guide to goods in transit insurance explains how that policy is built.
The cause of the temperature change is where the wording matters. Extensions are commonly written around specific triggers:
- breakdown or malfunction of the refrigeration unit;
- accidental damage to the vehicle or the unit, such as a collision;
- failure of the power supply to the unit, including standby power at a depot;
- in some wordings, fire or theft of the vehicle.
Some extensions apply only after the unit has been out of action for a stated minimum period. That is a time excess, and it matters: chilled produce can be lost faster than a frozen load. Check the period against what you actually carry.
Exclusions vary by wording, but these appear frequently:
- Goods loaded above the required temperature, or loaded into a box that was not pre-cooled.
- Incorrect thermostat settings, or the wrong mode (chill versus freeze) selected.
- The unit running out of fuel, or being switched off.
- Doors left open, or seals that were already damaged.
- Inherent vice: goods deteriorating because of their own nature or condition, rather than anything that happened in transit.
- Delay, loss of market or rejection by a customer where the goods were not physically damaged.
Several of those are operational rather than mechanical. That is why the paperwork below matters as much as the policy.
Temperature Records Are Your Evidence
After a deterioration claim, the first questions from the insurer or loss adjuster will be about temperatures: what the goods were at loading, what the unit was set to, and what the air in the box did during the trip. Your records either answer those questions or leave them open.
- Pre-cool records showing the box was at temperature before loading.
- Product temperatures probed and written on the consignment note or loading record at pick-up.
- Data logger or telematics downloads for the whole trip, including door-open events.
- Service records for the unit, including the last service before the loss. Our article on why maintenance records matter during truck insurance claims explains how insurers use them.
- The fault codes or repair report from the refrigeration technician who attended.
- Photographs and a disposal record for the rejected goods.
Keep logger data well after delivery. Late rejections happen, and the trip download is your answer to them.
Power Failure and Standby Power
Trailers parked at a depot overnight are often plugged into mains power so the unit runs on standby. If the depot power fails or a circuit trips, the unit stops and the load warms up with no driver there to notice.
Power failure is treated differently from unit breakdown in some wordings. Some extensions include failure of the public supply, some exclude it, and some include it only where the failure follows damage to the supply network. Ask which applies to yours. Also ask whether a load sitting in a parked trailer at your depot is still in transit under the goods policy at all, because temporary storage is sometimes limited by time or location.
Alarms that send a phone alert when box temperature moves out of range are practical risk control. They give you time to move the load before it is lost.
Your Goods or Someone Else’s
An operator carting its own product, such as a food manufacturer delivering to its customers, insures its own goods. A carrier moving other people’s chilled and frozen freight has a liability question instead: what it owes the owner of the goods under its terms of carriage and the customer’s contract.
Contracts with food distributors and retailers commonly ask for carriers liability at a stated limit, with deterioration included. Some ask carriers to accept responsibility regardless of fault. Read that clause against your policy before signing, because a policy that pays only when you are legally liable will not always stretch to a contract that makes you responsible for everything. The difference between carting your own goods and carting for others is set out in our post on hire and reward truck insurance.
A Refrigerated Truck Insurance Checklist
- Is the refrigeration unit included in the vehicle’s sum insured, and at what value?
- Does anything respond to the unit’s own breakdown, and with what excess?
- Is deterioration of stock included on the goods cover, and what triggers it?
- Is there a time excess, and does it suit the shelf life of what you carry?
- Is power failure at the depot included, excluded or limited?
- Does the goods limit match your highest-value load, not your average one?
- Do your customer contracts ask for more than the policy gives?
If reefers are part of a wider fleet, look at how they sit within the whole arrangement on our fleet insurance page. After a unit replacement or trailer swap, update your refrigerated truck schedule so the unit sits against the right vehicle.
Common Questions
Will my truck policy pay if the fridge unit fails and the load spoils?
A motor policy generally will not. Unit breakdown and stock deterioration are usually separate covers, and whether they respond depends on the policy wording and the cause of the failure.
Does it matter whether the unit is on the truck or the trailer?
It decides which vehicle the unit’s value sits on. Make sure the schedule matches, particularly where trailers swap between prime movers.
What if my customer rejects the load but it was not actually damaged?
Rejection without physical deterioration is commonly excluded. Temperature logs showing the goods stayed in range are your strongest answer to a rejection.
Talk It Through
Request a quote or call 1300 983 940 and we will set out how your trucks, fridge units and loads are each insured, and where the conditions sit.
General advice only. This article does not take your objectives, financial situation or needs into account. Consider the relevant PDS and Target Market Determination before deciding on a policy.