Posted on October 18, 2016
Truckers and motor carriers need a variety of insurance types to ensure they have full coverage. Understanding trailer interchange insurance can be confusing. Find out more about what it is, who needs it, and other important details below.
What is Trailer Interchange Insurance?
This is a type of coverage available to truckers and motor carriers. It provides coverage in the event that the insured damages a trailer that belongs to another individual. It is not uncommon for truckers and motor carriers to transport trailers that belong to a different motor carrier. This is how drivers can trade trailers en route to maintain scheduling demands. This type of arrangement is known as a trailer interchange agreement. The trailer interchange insurance labels the trailer possessor as the responsible party. It provides coverage in the event of an accident, fire, theft, and other types of physical damage.
Who Needs It?
If you make use of trailer interchange agreements, then you need trailer interchange insurance. The purpose is to protect you while you are moving cargo or a trailer that is not yours. The truck driver or motor carrier moving the trailer is almost always responsible for paying for damages should they occur.
Things to Know
Like other types of insurance, trailer interchange insurance has limits and deductibles. Limits and deductibles go hand-in-hand. The limit is the max amount of coverage an insurance provider will provide for a claim. Another way of looking at it is it is the max value of the trailer. The deductible is the amount the driver or motor carrier pays out of pocket in the event of a claim.
Select your limit and deductible wisely. Lower limits and high deductibles often cost less, but they can come back to haunt the insured. For example, let’s say the insured has a $15,000 limit with a $5000 deductible and the trailer they’re driving gets stolen. The driver would pay the $5000 up front and their insurance provider would pay up to $15,000 to replace it.
However, if the trailer was worth more than $15,000, that difference in cost is up to the driver to pay. High deductibles can be a burden as well. The insured should be certain they can pay the deductible at any given time if necessary.
Through an exclusive arrangement we are also able to provide coverage for any Trailer or Container in the insured’s care, custody and control, as most policies require a trailer interchange agreement in order for coverage to apply. This is a much broader application and prevents any issues of coverage for the driver and motor carrier/steamship line.
For more information on trailer interchange coverage and other transportation policies, contact us.