Trailer Interchange Coverage: Everything You Need to Know

Thang Truong
Thang Truong
Updated on:

Trailer interchange insurance provides physical damage coverage for trailers pulled under a trailer interchange agreement. It is essentially physical damage coverage for non-owned trailers used under these agreements. If the trailer gets damaged by collision, fire, theft, explosion, vandalism, weather events, and other covered causes, this insurance protects you.

Because you don’t own the exchanged trailers, they require separate insurance coverage because they are not covered under your regular trucking physical damage insurance.

This article will explain all you need to know to secure trailer interchange coverage.

What is a trailer interchange agreement?

A trailer interchange agreement is a contract that allows for transferring a trailer from one trucker to another. The transfer happens to complete a shipment and optimize trucker scheduling. One trucker may begin the journey, while others complete other parts. Typically, the trucker in possession of a trailer is responsible for paying any damages incurred while they have it. The cost associated with trailer damage or theft can be high, which is why it’s essential to get coverage for it. 

Another thing to consider is that a damaged trailer can create bad blood between the borrower and the owner. Having trailer interchange insurance can help speed repairs, get the trailer back on the road faster, and maintain a good relationship with your important business partners.

Who needs trailer interchange insurance?

If you have a trailer interchange agreement, you need trailer interchange insurance. It will protect you while you have possession of a container or trailer that you don’t own.

What do I need to know about limits, deductibles, and other aspects of trailer interchange insurance?

When you request a quote for trailer insurance coverage, the insurer will ask you to select both a limit and a deductible. The limit is the total amount your insurance company will pay if you make a claim on the insurance. The deductible is the amount you must pay out of pocket to help with the repairs or to get a replacement trailer before your coverage kicks in.

How does trailer interchange coverage work?

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 regular commercial truck insurance policy, including the comprehensive or property damage coverages, 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, and you would have to cover the first $1,000 of repair costs.

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.

What is the difference between trailer interchange and non-owned trailer coverage?

Truckers regularly use someone else’s trailer. Both types of insurance provide protection for damage you do to a trailer that you do not own but are borrowing.  

Trailer interchange coverage provides protection when there’s a written trailer interchange agreement in place. As we’ve already gone over, it provides protection when you are in custody and control of one or many trailers. That’s the case whether they are attached to your truck or not.

Non-owned trailer physical damage coverage is similar but different. It’s in effect when there’s no written trailer interchange agreement and only when the trailer is attached to your truck.

Like trucking physical damage and trailer interchange coverage, non-owned trailer coverage requires that you select a limit and a deductible. Truckers have to get both trailer interchange and non-owned physical damage coverage in many cases.

What else do I need to know about trailer interchange coverage?

Here are some little known facts about this protection:

  • You must purchase truck liability insurance before you can get trailer interchange coverage.
  • You must buy trailer interchange insurance from your trucking general liability insurer. Learn more at the best trucking general liability insurance companies.
  • The trailer must be in the insured trucker’s possession under a written trailer interchange agreement to make a claim.
  • Trailer Interchange insurance is only available for tractors and pickups. Other vehicle types are not currently eligible for trailer interchange coverage.
  • There must be at least one trailer listed for each tractor or pickup.
  • Trailer interchange insurance is not available in the commonwealth of Virginia.

How can I get cheap trailer interchange insurance?

You get this coverage from your primary truck insurance carrier as an add-on to your policy. You should request it when you get truck general liability insurance quotes. Compare quotes and select the one that provides the most complete protection for the lowest premium. 

Do my truck insurance also cover my trailer?

This is a rather complicated question because the answer depends on the specific scenarios. If the trailer is a part of the truck that you own and you have comprehensive commercial truck insurance, including trucking physical damage coverage, your truck insurance will cover almost any damages on your trailer. You can learn more about this in our article trucking physical damage coverage.

Obviously, if you don’t have trucking physical damage coverage, damages on your trailer will not be covered.

If you do not own the trailer and it was just given to you together with the cargo by your shipper or your broker, even if you have comprehensive trucking insurance, including physical damage coverage, the trailer isn’t covered. You need to have trailer interchange coverage to cover the trailer in this case.

Learn more at does my truck insurance also cover my trailer?

Thang Truong

Thang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

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