What Does Trailer Interchange Insurance Cover?

Trailer interchange insurance protects against physical damage to non-owned trailers while in a motor carrier’s possession under a written trailer interchange agreement. This specialized coverage is essential for trucking businesses that frequently exchange trailers with other partners. Its purpose is to address financial responsibility for damage to these borrowed assets, helping ensure continuity of operations by covering unexpected repair or replacement costs.

Covered Scenarios

Trailer interchange insurance covers physical damages and perils to non-owned trailers, including collision, overturning, fire, theft, explosion, and vandalism. Natural events like floods and lightning are also covered. This coverage applies when the non-owned trailer is under the care, custody, and control of the insured party, as stipulated by a written interchange agreement.

This insurance protects the physical structure of the trailer itself, regardless of fault, as long as the incident occurs while under the insured’s responsibility. For instance, if a non-owned trailer is damaged while being refueled or parked, the policy covers the physical damage. Coverage extends whether the trailer is attached to the truck, sitting idle, or in storage, provided it remains under the terms of the interchange agreement.

Situations Not Covered

Trailer interchange insurance has limitations. It does not cover damage to cargo inside the trailer; that falls under motor truck cargo insurance. This policy also does not cover physical damage to trailers owned by the insured company, as these are typically covered by the company’s own physical damage insurance.

The policy excludes liability for bodily injury or property damage caused to third parties by the trailer. Such liabilities are addressed by general liability or primary auto liability insurance. Coverage is contingent on a written trailer interchange agreement; damage occurring without such an agreement, or when the trailer is not under the insured’s direct care, custody, and control, is generally not covered.

How It Differs from Other Policies

Trailer interchange insurance serves a distinct purpose within trucking insurance. A key distinction is its requirement for a written trailer interchange agreement, outlining responsibilities for physical damage to non-owned trailers. This differs from non-owned trailer physical damage coverage, which applies to trailers borrowed or rented without such an agreement, and often only covers the trailer when hitched to the power unit.

Bobtail or deadhead coverage covers the tractor (truck) when operating without a loaded trailer or with an empty trailer, usually when not under dispatch. This coverage addresses liability for the tractor itself during these scenarios. In contrast, trailer interchange insurance focuses solely on physical damage to the non-owned trailer, whether attached or unattached, as long as it is under the terms of the interchange agreement.

Primary auto liability insurance covers bodily injury and property damage to other parties resulting from the insured’s operations, including incidents involving a trailer. Trailer interchange insurance, however, exclusively covers physical damage to the non-owned trailer itself, protecting the asset rather than third-party liabilities.