Does my business need Non-Owned Trailer coverage or Trailer Interchange Coverage?

You’ve worked hard building your business. Make sure you have the right coverage in place so that there are no surprises. Both types of coverage, generally speaking, provide protection against physical damage of all kinds for trailers not owned by your company.

Non-Owned Trailer Coverage:

Non-owned trailer coverage is an insurance policy that provides protection for trailers that your trucking operation doesn’t own, but you may use or haul for others. This coverage is essential when your company is using trailers owned by other entities, such as customers, vendors, or other motor carriers. It helps mitigate the financial risks associated with damage to or loss of these trailers while they are in your care, custody, and control. This coverage is usually more broad in scope & therefore generally costs more.

Trailer Interchange Coverage:

Trailer interchange coverage, on the other hand, specifically protects you from the legal liability & physical damage/theft of trailers owned by other companies, and hauled by you under a trailer interchange agreement. It can also cover your trailers in someone else’s possession. The coverage should be equal or greater than the value of all units in your possession. Many shippers require this coverage in order to haul for them, so be you contract a load, check to make sure what their requirements are.

Choosing Between Non-Owned Trailer and Trailer Interchange Coverage:

The choice between non-owned trailer coverage and trailer interchange coverage depends on the nature of your trucking operation and the type of relationships you have with other companies. It also depends on the extent to which your for-hire trucking operation engages in each of these types of activities.

1. Non-Owned Trailer Coverage:

Consider non-owned trailer coverage if:

• Your for-hire trucking operation hauls trailers belonging to different customers or vendors.
• You occasionally use trailers owned by other motor carriers to fulfill your transportation contracts.
• You want comprehensive protection against damage or loss to trailers that you don’t own but are responsible for during transportation.

2. Trailer Interchange Coverage: Choose trailer interchange coverage if:

• Your trucking operation frequently participates in trailer interchange agreements with specific carriers.
• You interchange trailers as part of your routine operations with companies to optimize transportation efficiency.
• The shipper you are contracted with requires a formal written or verbal trailer interchange agreement.

A VERY important note:

Generally, both types of coverage only provide protection while that trailer is hooked to a SCHEDULED vehicle on the underlying policy. If your driver comes on location, and drops that trailer for any reason and something happens, there is no coverage.

Different policies have different conditions and language on what constitutes an “abandoned” trailer. Make sure you know these provisions to avoid financial catastrophe.

This is why it’s important to work with an experienced insurance professional to assess your specific needs and tailor your insurance plan accordingly to appropriately manage risk.

Give us a call today so that we can provide you that peace of mind at the very best rates.