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April 24, 2023

Importance of Having a Trailer Interchange Insurance

 

Trailer interchanges are popular in the trucking industry, particularly when truckers transport trailers owned by another trucker or transportation company. This trailer interchange agreement helps decide liability in the event of trailer damage. In this case, trailer interchange insurance for rented trailers is required if a transport company is a signatory to any interchange agreements. The policyholder will protect the policyholder if the non-owned trailer is damaged as a result of a collision, fire, theft, explosion, or vandalism.

About the Trailer Interchange Agreement

A contract of trailer interchange agreement between trucking companies facilitates the trading system while recognizing on both sides that the truck driver or company in control of the trailer is responsible for any damage, whether the trailer is loaded, empty, being towed, or sitting idle.

 

Interchange agreements allow the company to subcontract the complex task of choosing optimal routes to carriers and logistics managers. When a trailer is moved from one region to another, it is protected by a trailer interchange agreement in which the partnering operators agree that the first driver or rental company will be liable for the trailer’s condition until it is assigned to the next carrier.

Who needs the insurance?

Trailer exchange insurance can be pretty helpful for those who fall into one of these categories:

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Intermodal Truckers

The UIIA Agreement (the Uniform Intermodal Interchange and Facilities Access Agreement) applies to intermodal truckers. Truckers who are UIIA members must carry insurance, and its premium is decided by the equipment provider.

Power-Only Drivers

Generally, power-only drivers are contracted to haul vacant trailers as a loadout. Before being hired, such drivers must get trailer interchange insurance.

Leased Operators

Leased drivers are sometimes obligated to get interchange insurance. It is important to check with the company to determine if this is required.

Independent Owner/Operators

Since they do not own the trailer, independent owners/operators haul trailers under a trailer interchange agreement. As a result, having insurance for trailer interchange is an intelligent choice

Insurance Coverage Amount

A trailer interchange coverage may cost between $100 and $1500 per year, depending on the amount and deductible users select. The driving record, region, asset value, and loss history are all factors that affect how much policyholders pay.

 

The typical deductible for trailer interchange coverage is $1,000, with a limit between $20,000 and $30,000. Knowing the trailer’s actual cash value will help policyholders choose the appropriate limit. In the event of a total loss, the insurance provider will only pay out the trailer’s value and not the policy limit. Hence, over-insuring a trailer is a waste of money. On the other hand, if the trailer is damaged above the insurance limits, under-insuring can result in significant out-of-pocket expenses.

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Conclusion

A trailer is an expensive asset to insure since it is expensive to buy and even more costly to be repaired if they are damaged. An insurance plan for commercial vehicles called “trailer interchange insurance” covers trailers that a company borrows or exchanges.

 

 

 

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