Trailer interchange insurance provides physical damage coverage for trailers that are part of a trailer interchange agreement. This insurance provides coverage for trailer damages caused by fire, collision, vandalism, or explosion, specifically designed for non-owned trailers. In cases where you exchange trailers with another driver, your physical damage insurance will not cover the exchanged trailer.
However, trailer interchangeable insurance covers them in times of unexpected events. This insurance does not only cover the trailer damages but also the trailer driver and the trailer company against liabilities for damages to the trailer. Irrespective of the fact that the trailer is not theirs, as long as it is in their possession, this insurance coverage covers all unexpected related expenses for damaged trailers. This write-up contains insights into trailer interchange insurance and how it works.
Who Needs It?
A trailer interchange agreement is a contract between two trailer companies that arrange the transfer of a trailer from one trucker to another to complete the shipment. Truckers under a trailer interchange agreement are responsible for any damages or unexpected occurrences on the interchanged trailer. Making these payments out of pocket can be quite difficult to do; for this reason, this insurance offers policies to cover events that may cause damage to these trailers.
What Does Trailer Interchange Insurance Cover?
Trailer interchange coverage covers a policyholder in different events that may cause damages to the non-owned trailer. Some of these events include the following:
- Theft.
- Fire.
- Collision.
- Vandalism.
- Explosion.
- Cargo shifts that may cause damages.
- Accidents.
- Other physical damages to a trailer in a trucker’s possession.
If a trucking company that is under an interchange agreement and has purchased this insurance coverage gets involved in any of the above events, it will be covered. However, this depends on what is covered under your policy.
Why do I need interchange agreements?
Some trucking companies handle their trailer shipping from their warehouse to where it is meant to be delivered. Other trucking companies that need to ship goods from one location to another most times get into a contract agreement with a trucking company to handle the shipments. For instance, if a trailer manufacturer needs to ship goods from one country or state to another, they may need to get into an interchange agreement with a trucking company to make shipment faster and better.
Who Needs Trailer Interchange Insurance?
Not everyone needs to get this insurance coverage. This insurance offers financial protection to drivers, owner-operators, and motor carriers. Truckers storing non-owned trailers under an interchange agreement and motor carriers’ trailers in someone else’s possession require trailer interchange coverage. Truckers not under an interchange agreement cannot purchase coverage for their possession of trailers.
How Much Does Trailer Interchange Insurance Cost?
Trailer interchange insurance coverage premium costs depend on what insurance company you are working with. It also depends on the trucker’s driving record, the locations they operate in, the trailer’s condition, the types of freight being handled, and whether or not the policyholder has a poor insurance record. However, the average policy cost of this insurance ranges between $20,000 and $30,000, meaning they cost between $1,000 and $1,500 each year. To know the actual cost of trailer interchange coverage, you need to contact your company.
Trailer Interchange Insurance Additional Features
Trailer interchange insurance offers two additional insurance options that policyholders can purchase as add-ons to their insurance policies. Truckers storing non-owned trailers under an interchange agreement and motor carriers’ trailers in someone else’s possession require trailer interchange coverage. Truckers not under an interchange agreement cannot purchase coverage for their possession of trailers.
Trailer Interchange Insurance Types
The driver’s ownership of interchanged trailers is not covered by comprehensive and property damage insurance. If ever a non-owned trailer gets stolen or damaged, trailer interchange insurance will cover repairs and replacements of the trailer. In cases where the stolen trailer is worth more than the $20,000 insurance coverage, you would be required to pay the balance out of pocket. If it is less than your insurance cost, your insurer will cover the expenses after you pay for deductibles.
Trailer Interchange Insurance Exceptions and Restrictions
The trailer under an interchange agreement must be in the possession of an insured trucker. The trucker must be under an interchange agreement before they can purchase this insurance coverage. Truckers must purchase liability insurance for trailer interchange insurance, which is only available for tractors and pickups. It does not cover any other type of vehicle.
