Does commercial auto insurance cover trailers?

What your commercial auto policy covers when you tow

Liability is the part that usually follows the trailer. Insureon explains that for smaller trailers, a commercial auto policy covers damage caused by the towing vehicle and the trailer, including injuries and property damage, and pays legal fees if you are sued after the accident. If your trailer swings into another car on a turn, the claim generally goes to the auto liability on the truck pulling it.

Physical damage is different. Insureon notes that auto insurance won’t cover physical damage to the trailer or its contents unless you add coverage, and that larger trailers may need their own insurance and registration. In practice, a trailer that is not listed on your policy with its own physical damage coverage is usually your loss if it is wrecked or stolen.

Policy wording varies by insurer and by trailer size, so check the covered autos section of your policy and ask your agent how your trailer is treated, especially when it is unhitched and parked.

Which coverage pays: common trailer claims

Most trailer losses fall under one of a handful of coverages. The table shows where each typical claim usually lands; your policy’s exact terms decide the final answer.

Insuring the trailer itself

To protect the trailer, list it on your commercial auto policy and add physical damage coverage. Progressive Commercial describes collision as paying to repair or replace a vehicle that collides with another object, overturns or rolls, and comprehensive as covering non-collision events such as fire, theft, vandalism and hail. Progressive also notes that to buy collision you must carry comprehensive or fire and theft with combined additional coverage.

Value the trailer carefully. Progressive defines a stated amount as the value you submit for a vehicle after depreciation, including any permanently attached equipment, and its list of such equipment includes items bolted or welded to an insured vehicle or trailer, such as pressure washers, generators, air compressors and tool boxes. If you understate the value, a total loss may pay less than it costs to replace the trailer and its built-in equipment.

Progressive Commercial says it insures utility trailers used by landscapers and construction businesses, as well as dump body, concession, flatbed and car hauler trailers, and that utility trailer coverage can be set up to protect both the trailer and what you carry.

Tools, equipment and cargo inside the trailer

The contents are the gap that catches most contractors. Insureon warns that if items hauled in a cargo trailer or on a flatbed are damaged or stolen, the commercial auto policy may not protect them, and points to inland marine insurance, which covers business property wherever you take it, including in transit.

If you haul other people’s goods for pay, the coverage you need is motor truck cargo, which Progressive Commercial lists among its truck coverages. Brokers and shippers usually set the cargo limit they expect, so check the load contract before you book.

• Landscapers and contractors: inland marine for mowers, tools and equipment kept in an enclosed or open trailer.
• Hotshot and car hauler operators: motor truck cargo for the freight or vehicles on the trailer.
• Food and concession trailers: coverage for kitchen gear that is not bolted in, since only declared, permanently attached equipment counts toward the trailer’s insured value.

Rented, borrowed and interchanged trailers

A trailer you don’t own is not one of your listed vehicles. Progressive Commercial defines hired auto coverage as liability coverage for an unlisted vehicle you lease, hire, rent or borrow, so it is the piece that responds if a rented trailer is involved in an accident. Hired auto liability does not pay to repair the rented trailer itself, so ask whether your policy offers physical damage for hired vehicles or rely on the rental company’s damage waiver.

Truckers who pull trailers owned by other carriers need trailer interchange coverage. Progressive defines it as physical damage insurance for trailers you don’t own while they are in your care, custody or control, such as under a written trailer interchange agreement.

What adding a trailer does to your premium, and how to keep it down

Insureon reports its small-business customers pay a median of $245 a month for commercial auto, and notes that cargo trailers and utility trailers usually cost more to insure than vans and sedans. Insureon also lists the number and types of vehicles, limits, deductibles and the coverages you choose among the main price factors, so physical damage on a valuable trailer with a low deductible adds the most.

These steps keep the cost in line without leaving a gap:

• List every trailer you own with its VIN and a realistic value, including bolted-on equipment.
• Choose a physical damage deductible you could pay from cash, and drop collision on an old trailer worth little.
• Insure tools and equipment under inland marine rather than relying on the auto policy.
• Lock trailers with hitch and wheel locks, and park them in lit or fenced areas to reduce theft claims.
• Remove sold trailers promptly so you stop paying for them.
• Compare several insurers; a broker such as Florin can compare quotes for the truck, trailer and equipment together.