When pulling a non-owned trailer under a trailer interchange agreement, trucking companies will need to have trailer interchange coverage.
As dictated by the interchange agreement, trucking companies are responsible for any damage to non-owned equipment in their possession and unfortunately, regular physical damage insurance only covers owned tractors and trailers.
While often confused with non-owned trailer coverage, the key difference is that trailer interchange coverage protects trucking companies the entire time a trailer is in their possession – unlike non-owned trailer coverage, which only kicks in when a trailer is attached to the truck.
Our guide below covers everything you need to know about trailer interchange insurance, including how much it costs, what it covers, and more.
For those just looking for a quick answer, here are our top picks.
Trailer interchange coverage is insurance that protects motor carriers against physical damage to a third-party trailer in their possession while under a trailer interchange agreement.
Coverage typically includes but is not limited to:
A trailer interchange agreement is a prerequisite to getting trailer interchange insurance. In case of a claim, if you can’t furnish the trailer interchange agreement, it will be denied.
Yes, trailer interchange coverage is available as an endorsement to most commercial truck insurance policies and does not need to be purchased as a separate policy.
A trailer interchange agreement is a written contract that assigns the terms and responsibilities between the owner of the trailer and the trucking company in the possession of the equipment.
The trailer interchange agreement covers the entire time the trailer is in the trucker’s possession whether or not it is attached to the truck.
Most agreements outline details including the duration of the trip, responsibilities of both parties (the party transporting the goods and the one receiving the goods), expectations about maintenance, dispute resolution process, and the compensation structure.
As mentioned above, trailer interchange coverage protects a trucking company while they are in possession of a trailer they don’t own. However, the trailer must be exchanged under a written trailer interchange agreement for the insurance to be valid.
While selecting a policy, you must select:
If a trucking company selects a policy with a $2,000 deductible and a $30,000 limit and totals the trailer in an accident, the trucking company will be responsible for paying the first $2,000 to replace the trailer. The insurance company will then pay the difference between the deductible and the policy limit. In this case, $28,000.
If the trailer is worth more than $30,000, the policy will not be able to replace the trailer and the trucking company will be responsible for the additional expenses.
Any trucking company that takes possession of a non-owned trailer while under a trailer interchange agreement will need trailer interchange coverage.
While a wide range of trucking companies may utilize interchange agreements, a few common examples include Amazon Relay drivers and anyone under a UIIA agreement will need trailer interchange coverage. Power-only truckers also frequently require trailer interchange insurance.
Some motor carriers also require their owner operators to purchase trailer interchange coverage if they are pulling non-owned trailers under an interchange agreement.
Although other vehicles may be able to pull a trailer, coverage is typically only offered to tractors and pickup trucks.
When a trucker doesn't have a trailer interchange agreement, they need non-owned trailer insurance. However, this coverage is applicable only when the trailer is attached to their truck.
In comparison, trailer interchange coverage provides protection the entire time the trailer is in the possession of the trucking company, whether the trailer is connected to the truck or not.
Both policies may be required depending on a trucking company’s client base. For example, some brokers will require non-owned coverage and do not operate with a trailer interchange agreement. If a trucking company works with such a broker and then signs a contract with a shipper that uses a trailer interchange agreement, they will need both types of coverage.
A trailer interchange limit is the maximum amount the insurance company will pay out from a claim against a trailer.
The typical policy limit for trailer interchange coverage is $20,000-$30,000 with a $1,000 deductible.
Most interchange insurance policies will not cover the following events:
Trailer interchange insurance can cost anywhere from $100 to $1,500 a year in premiums depending on the policy.
The following factors can all affect your premium:
While the trailer interchange agreement may dictate the required policy limit, it’s a good idea to opt for the lowest policy limit allowed that still covers the cash value of any trailers covered under the agreement.
Insurance providers will only pay the fair market value of a trailer so a policy that over-insures the trailer will provide no benefit and result in higher premiums.
In addition to selecting the right policy limit, trucking companies can lower premiums by opting for higher deductibles and getting quotes from multiple insurance providers.
Yes, trailer interchange insurance is required even if transporting an empty trailer.
In transportation or logistics, interchange refers to the transfer of equipment between two parties. One common example would be a shipping container that is transferred from a ship to a train and finally to a truck. The parties that do not own the trailer would need interchange insurance in case the container is damaged while in their possession.
Trailer interchange coverage is not the same as cargo insurance. While trailer interchange coverage protects carriers if a non-owned trailer is damaged while in their possession, cargo insurance covers the cargo they are transporting. Motor carriers will need both types of coverage.
While UIIA’s minimum requirement for interchange insurance is $15,000, most agreements require $20,000-$25,000 in coverage.
Tiger Cool Express requires a $65,000 policy limit, which is the highest requirement among equipment providers.
Yes, Amazon Relay requires a trailer interchange insurance policy with at least a $50,000 policy limit.