Trailer interchange insurance provides physical damage coverage for trailers pulled under a trailer interchange agreement. A trailer interchange agreement is a contract that allows for transferring a trailer from one trucker to another. Because you don’t own the exchanged trailers, they require separate insurance coverage because they are not covered for losses under your regular physical damage insurance coverage. It is essentially physical damage coverage for non-owned trailers used under these agreements.
The trailer interchange agreement will specify a minimum coverage limit. The limit is the total amount your insurance company will pay for losses caused by collision, fire, theft, explosion, vandalism, weather events, and other covered causes. Here’s a scenario that shows how trailer interchange insurance works:
Imagine you’re hauling an exchanged trailer owned by someone else. You pull off the highway to fuel up and grab a bite to eat. While you’re inside eating, someone steals your truck. Since you don’t own the trailer you’re hauling, your truck insurance policy won’t pay for the stolen trailer. Instead, you would make a claim on your trailer interchange insurance.
If you selected a limit of $20,000 and a deductible of $1,000 when you purchased your policy, your insurance would pay up to $20,000 toward the replacement trailer, and you would have to pay for the first $1,000 to replace the trailer. If the trailer is worth more than $20,000, you would be responsible for paying expenses over $20,000. If the trailer was worth less than $20,000, then your insurance would cover the total cost after your deductible.
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