Trailer interchange

How does trailer interchange coverage work for a trucking operation?

Some operators pull trailers they don't own: a shipper's or broker's trailer, a trailer-pool unit, or equipment from another carrier under an interchange. When you take one, you take responsibility for it under the agreement you signed. If it is damaged while you have it, the owner can look to you for repair or replacement.

Trailer interchange coverage is the policy that generally responds to that damage to the non-owned trailer. A few points that decide how it works:

• A written agreement. Interchange coverage is generally written to respond to damage to non-owned trailers that are in your possession under a written trailer interchange agreement. Without one, a claim may not be covered. Policies vary, so ask your insurance agent how yours defines it.
• Limit and deductible. The agreement may set a minimum limit, and your policy sets the limit and deductible that actually apply.
• Perils. Policies may cover only certain causes of loss, such as collision, or broader causes, such as fire and theft, depending on the form.
• The period. Coverage usually applies while the trailer is in your possession, between pickup and return. Read when that starts and stops.
• Responsibility for the trailer. The agreement, not the insurance policy, sets what you owe the owner. The policy only pays what it covers.

What does trailer interchange cover, and what doesn't it?

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

Often covered

• Physical damage to a non-owned trailer while in your possession under a written interchange agreement, up to the policy limit, less the deductible
• Covered causes of loss as the policy defines them, such as collision or fire

Often not covered, or covered only with conditions

• Trailers without a written agreement, or outside the agreement's terms
• Trailers you own. That is physical damage.
• The load inside. That is motor truck cargo.
• Liability to others from the trailer in motion. That is primary auto liability.
• Wear and tear, mechanical breakdown, and tire wear
• Contract liability beyond the policy limit, such as damages the agreement lets the owner claim that the policy doesn't pay
• Loss of use of the trailer by its owner, under many policies

A common mistake is signing an agreement that asks for a higher limit than your policy has. Compare the agreement to your declarations before you sign.

What affects the cost of trailer interchange coverage?

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

• Limit. The amount required by the interchange agreement or the value of trailers you pull
• Number and type of trailers. Dry van, reefer, flatbed, or specialized
• Deductible
• Causes of loss covered. Narrow or broad
• How often you pull non-owned trailers
• Radius and routes
• Claims history and experience
• What the agreement requires. Limits, deductibles, and named parties

Who typically needs trailer interchange coverage?

• Small fleets: Fleets that pull shipper-owned or pooled trailers are the typical audience.
• OTR and local haul: Drop-and-hook and dedicated lanes often involve trailers you don't own.
• Couriers: Operators pulling a customer's trailer for expedited or dedicated work.
• New authority: Ask early whether your first contract has an interchange agreement, so you can compare its requirements to your policy before the first load.
• Brokers and dispatchers: Brokers don't pull trailers, but their carriers may be asked about it. Brokers' own coverages are a different matter. See contingent auto liability.