Trucking is a unique industry. There are many different scenarios and risks that you face as a trucker, and that means that you need a variety of insurance coverages to protect you. However, all of these transportation and commercial auto coverages can get a little confusing. There are a lot of them, so they can get jumbled. One type of trucking insurance that you might be curious about is trailer interchange insurance. What exactly is trailer interchange insurance? What does it cover? When and why would you need it? We can answer those questions and shed a little light on this very specific type of coverage.
What is trailer interchange insurance?
Trailer interchange insurance is coverage for when you have a trailer interchange agreement with another trucking entity. You haul a trailer to a specific meeting spot, then drop if it and take a different trailer (not owned by you) to its destination. Meanwhile, someone else will pick up your trailer and take it to its final destination.
These agreements exist in the trucking world to make shipping easier. You’re swapping trailers with someone so both parties can deliver their loads more efficiently. However, these interchange agreements also create a risk for you as the truck driver. You do not own or have any association with the trailer attached to your truck when you pick up the designated load, but you’re still responsible for the trailer and its cargo. Since you don’t own the trailer, your other insurance coverages won’t cover it.
And hence the creation of trailer interchange insurance, which will protect you while you’re hauling a trailer you don’t own under a trailer interchange agreement.
What does trailer interchange insurance cover?
Trailer interchange insurance functions similarly to cargo insurance. It can protect the trailer against a variety of losses, such as…
Remember, since you’re responsible for the trailer you exchange you could be on the hook for covering the damages if any of these losses happened. Which is where your insurance comes in. It can help you cover what you’re legally obligated to pay if disaster struck.
What’s an example of trailer interchange insurance in action?
Let’s say you’ve got a trailer exchange agreement to haul a trailer from Atlanta to Richmond. Your trailer’s final destination is New York City, and the other trucking entity has a trailer in Richmond that needs to go back to Atlanta. They have a driver who can meet you in Richmond and take your trailer to NYC while you take their trailer and head back to the ATL. You get to Richmond, drop your trailer off at the designated storage lot, and pick up the exchanged trailer that needs to go to Atlanta.
So, you’re in the scenario where you’ve got a trailer interchange agreement, you’re hauling a trailer that you don’t own, and you’re responsible for it. (No one ever said the life of a semi truck driver is simple.)
Anyways, on the way to Georgia, you’re driving through South Carolina when it starts raining. The roads are slick and you lose control of your truck, skidding off the highway. Fortunately, you’re fine and so are all the other drivers involved, but the trailer attached to your truck…well, it’s trashed and the load is done for. Since the trailer is your responsibility, you’re responsible for covering the expenses associated with replacing the trailer and the load.
But your trailer interchange would cover it, up to the limit on your policy and minus the cost of your deductible (the amount you agree to pay in the event of a claim.)
So, to wrap things up, let’s recap:
Trailer interchange protects you when you have a trailer exchange agreement and you’re driving a trailer that doesn’t belong to you. It protects your liability for the non-owned trailer in your care by covering losses like theft, vandalism, collision, fire, and explosion.
It’s essential that you have a transportation insurance plan that’s customized to your business. Each trucking business faces different risks, so each one needs a plan that will cover those risks. Our truck insurance experts can help you get the coverage you need to protect your business. We can also help you save money on your truck insurance by shopping for the best rate. We’re here to answer all your questions and make the insurance process as easy as possible. Get started with your quotes by filling out our online form or giving us a call today.