Physical damage

How does physical damage coverage work for a trucking operation?

Your truck is the business. If it is wrecked, burned, or stolen, the loan or lease usually keeps running while the revenue stops. Physical damage coverage is the policy that generally pays to repair or replace the unit, less your deductible, for covered losses.

Most physical damage policies are built from two coverages:

• Collision. Damage from a crash, overturn, or striking an object, regardless of who is at fault under many policies.
• Comprehensive (sometimes called "other than collision"). Damage from causes such as fire, theft, vandalism, hail, flood, and falling objects.

Three terms decide most claims:

• Deductible. The amount you pay before the policy pays.
• Valuation. How a total loss is valued: actual cash value (a current market value less depreciation), stated or scheduled value, or an agreed amount. The wording in your policy decides, and the difference can be large on an older unit.
• Scheduled units. Coverage generally applies only to the units listed on the policy, so every tractor and trailer needs to be on the schedule.

Lenders and lessors. If a unit is financed or leased, your finance or lease agreement commonly requires physical damage coverage and names the lender or lessor on the policy. Read the agreement for the exact requirement. See equipment financing for how financing and leases work. BreadRoute does not require, sell, or place this coverage.

What does physical damage cover, and what doesn't it?

Policies vary. Read your declarations, definitions, and exclusions. In general:

Often covered

• Repair or replacement of a covered tractor, truck, or trailer after a covered collision, overturn, fire, theft, or similar loss
• Permanently attached equipment, under many policies, if listed or described
• Towing and storage costs after a covered loss, under some policies

Often not covered, or covered only with conditions

• Wear and tear, and mechanical breakdown. Engine, transmission, and similar failures that aren't caused by a covered loss are commonly excluded.
• Tires and tire damage not caused by a covered loss.
• Unlisted units. A trailer or tractor not on the schedule may not be covered.
• Non-owned trailers. Damage to a trailer you pull but don't own is usually trailer interchange.
• The load. That is motor truck cargo.
• Liability to others. That is primary auto liability.
• Loss of use or lost revenue while a unit is down. Often excluded unless a rental or downtime endorsement is added.
• The gap on a loan. If the unit's value is less than what you owe, a gap provision or separate coverage may be needed.

These are common patterns, not universal ones.

What affects the cost of physical damage coverage?

We don't publish prices. Cost is set by insurers and the licensed agents you work with. The factors that generally move it:

• Value of the units. Newer, higher-value tractors and trailers cost more to insure than older ones
• Type of unit. Tractor, straight truck, reefer trailer, or specialized body
• Deductible. A higher deductible generally lowers the premium and raises what you pay in a claim
• Valuation method. Stated or agreed value versus actual cash value
• Radius and use. Where and how the unit runs
• Where the unit is kept. Garaging location and security
• Drivers and loss history. Your claims record and driver experience
• Lender or lessor requirements. Deductible limits, loss payee wording, and gap provisions

Who typically needs physical damage coverage?

• New authority: If you financed your first truck, expect the lender to require it. Ask the lender for the minimum before you shop.
• Small fleets: A larger schedule means more to keep current. Add and remove units as they change.
• OTR and local haul: More miles and more time away from your yard mean more exposure to theft and weather. Read the conditions.
• Couriers: Cargo vans and box trucks are covered the same way if listed, with valuation and deductible choices.
• Towing and repair: Wreckers and service trucks are high-value units that often have financing behind them. Customers' vehicles are covered elsewhere. See garagekeepers liability and on-hook towing.
• Owner-operators leased onto a carrier: Your lease decides who carries physical damage on your tractor. Read it. See bobtail and non-trucking liability.