Insurance: When Trailers Need Coverage

Whether or not you need to carry insurance on a trailer depends on several factors, including the type of trailer, its intended use, and your location. In most cases, the liability policy for your vehicle will cover damage caused by a towed trailer, but it's important to check with your insurance provider to be sure. Some trailers, such as those used for business purposes or those with their own motor, may require separate insurance. Additionally, certain types of coverage, such as comprehensive and collision insurance, may need to be purchased separately. It's always best to consult with an insurance agent to ensure you have the appropriate coverage for your trailer.

Liability insurance

Liability Coverage

The liability policy of the vehicle doing the towing typically covers any damage caused by a towed trailer. This means that if you are liable for injuries or damages while pulling a trailer, your existing vehicle insurance's liability coverage will protect you. However, it's important to note that this coverage has limitations and may not apply in all scenarios.

Limitations of Vehicle Liability Coverage

Benefits of Separate Trailer Insurance

Having separate insurance coverage specifically for your trailer provides better protection against damage. It can cover accidental damage, vandalism, theft, and severe weather damage, among other things. This type of insurance can also provide peace of mind when leaving your trailer unhitched at job sites or in your driveway, as it will be covered even when not connected to your vehicle.

Types of Trailer Insurance

When considering trailer insurance, there are two main types to choose from: collision coverage and comprehensive coverage. Collision coverage pays for damage to your trailer in the event of an accident with another vehicle or object, while comprehensive coverage protects against accidental damage from non-collision incidents, such as vandalism, theft, and extreme weather.

Additional Considerations

It's important to note that the required insurance coverage for your trailer may depend on its model, purpose, and usage. If you use your trailer for business purposes, you will likely need to purchase commercial trailer insurance. Additionally, if you have a loan on your trailer, your bank may have specific insurance requirements that you need to comply with.

In conclusion, while liability insurance for your trailer is often covered by your vehicle's insurance policy, it is beneficial to have separate trailer insurance to ensure comprehensive protection. By understanding the limitations of your vehicle's liability coverage and the benefits of specialized trailer insurance, you can make an informed decision to adequately protect yourself and your assets.

Collision insurance

Collision coverage is an important aspect of trailer insurance, protecting you from financial losses in the event of an accident. It covers damage to your trailer resulting from a collision with another vehicle or object, regardless of who is at fault. This includes scenarios such as a fender bender, impact with infrastructure, or a rollover.

When purchasing collision insurance for your trailer, you will need to provide specific details about the trailer, including the year, make, model, serial number, and/or the VIN number. This information is necessary to ensure that your trailer is properly insured and covered in the event of a collision.

It's worth noting that collision insurance for trailers is typically separate from your auto insurance policy. While your auto insurance may cover liability for damages caused by your trailer, it usually does not include collision coverage for the trailer itself. Therefore, it is recommended to purchase a separate policy or add-on to your existing auto insurance to ensure your trailer is protected in case of an accident.

The cost of collision insurance for your trailer will depend on various factors, including the trailer's intended use, the type of coverage you choose, how often you use the trailer, the average number of miles travelled, and the size and value of the trailer. It's always a good idea to shop around and get quotes from multiple insurance providers to find the best rate for your needs.

In addition to collision coverage, comprehensive coverage is another important aspect of trailer insurance. Comprehensive coverage protects your trailer from non-collision incidents, such as vandalism, theft, and extreme weather events. By having both collision and comprehensive insurance, you can have peace of mind knowing that your trailer is protected in a wide range of situations.

Comprehensive insurance

The cost of comprehensive insurance will depend on various factors, including the trailer's value, intended use, coverage amount, frequency of use, and average mileage. It's recommended to consult an insurance broker or agent to determine the specific coverage and costs for your trailer.

Standalone comprehensive insurance policies for your trailer can provide additional benefits. These policies ensure that your trailer remains covered even when it's unhitched, and they protect your property and auto policies from being depleted in case of a claim.

When considering comprehensive insurance for your trailer, it's essential to review the terms and conditions carefully. Understand what specific risks and damages are covered, as policies can vary. Additionally, some insurance companies may offer bundled services or discounts if you insure your vehicle and trailer together.

Personal umbrella policy

In most cases, the liability policy for your vehicle will pay for damage caused by a towed trailer. However, this is not always the case, and it is recommended to carry a separate travel trailer insurance policy. This is because there are countless situations that may occur with a trailer, and it is not certain that your auto insurance policy will provide liability protection if your trailer causes damage or personal injury.

A personal umbrella policy (PUP) is an optional form of insurance that provides extra protection. It is referred to as "umbrella insurance" because it provides liability coverage over and above your standard auto or homeowners insurance. It offers protection for you and your family against large and potentially devastating liability claims or judgments. A personal umbrella policy kicks in when your other liability underlying limits have been reached.

For example, if you are at fault for an accident that injures another driver and your auto policy liability coverage pays up to your limit of $250,000, but the other driver sues you for $1 million, your personal umbrella policy can cover the difference up to your policy limits. Other scenarios where a personal umbrella policy can provide coverage include accidents on your swing set or pool, fires that damage neighbourhood homes, boat crashes, and pedestrian accidents caused by teen drivers.

Personal umbrella policies cover a wide range of losses, including bodily injury, personal injury, and property damage. They typically cover anyone named on the policy, as well as any relatives or dependents living with you. It's important to note that a PUP doesn't cover everything, and there are certain exclusions such as liability or damages related to your business or personal belongings.

When it comes to insuring a trailer, a personal umbrella policy can be useful if your trailer and boat cause damage or injury in an auto accident beyond your liability coverage. This type of policy can help cover the remaining expenses if the other driver sues you.

Commercial trailer insurance

The cost of commercial trailer insurance varies depending on the state of operation, the type of goods hauled, the trailer's hauling capacity or weight, and the travel distance. Regular dry trailer insurance can cost anywhere between $250 and $1000 per month. The average cost of commercial trailer insurance is $300 a month or $3,600 a year for $1 million liability policies.

When shopping for commercial trailer insurance, it is important to compare quotes from different companies to ensure you are getting adequate coverage at a competitive rate. Some companies offer discounts for customers who purchase multiple types of insurance policies.

Frequently asked questions