Trailer Interchange vs Non-Owned Trailer Coverage

Understanding truck insurance is crucial when it comes to protecting trailers you don’t own, but use in your business. Commercial truck insurance policies offer two coverage options: trailer interchange and non-owned trailer physical damage.

But which coverage do you need? It comes down to your specific trucking operation.

While the coverages may seem similar on the surface, there are important differences between the two.

Trailer Interchange Coverage

Trailer interchange insurance is designed for truckers who exchange trailers with other carriers under a trailer interchange agreement. This agreement allows for an easy transfer of trailers between companies. In addition, trailer interchange provides coverage when the trailer is detached from the truck.

Logistics networks often utilize trailer interchange agreements to facilitate smooth and efficient freight movement.

Another reason you might need trailer interchange is for intermodal trucking operations. The Uniform Intermodal Interchange and Facilities Access Agreement (UIIA) mandates trailer interchange insurance, among other coverage, to operate in ports and railyards.

When considering trailer interchange coverage, it’s essential to understand the following:

• Trailer interchange insurance requires a trailer interchange agreement.
• Coverage may be provided while the trailer is unattached to the power unit.

Depending on your limit and deductible, trailer interchange insurance will cost between $800 and $1,700 per year. The average limit for trailer interchange is between $20,000 and $40,000, however certain agreements such as Amazon Relay requires $50,000 trailer interchange.

Non-Owned Trailer Physical Damage

Non-owned trailer physical damage insurance is broader than trailer interchange. It provides coverage against physical damage coverage to any non-owned trailer in your care, custody, or control, regardless of whether a trailer interchange agreement exists.

However, non-owned trailer coverage does not extend to unattached trailers.

In addition, non-owned trailer insurance does not meet UIIA requirements for intermodal hauling in ports and railyards.

This coverage is recommended for most long-haul truckers who frequently borrow trailers or engage in power only trucking.

Key Differences: Trailer Interchange vs Non Owned Trailer

Your choice between trailer interchange and non-owned trailer depends on your specific trucking operation.

1. Scope of Coverage:
   • Trailer Interchange: Limited to trailers under trailer interchange agreements, acceptable for UIIA requirements
   • Non-Owned Trailer Physical Damage: Covers any non-owned trailer you’re using, but does not meet UIIA requirements
2. Written Agreements:
   • Trailer Interchange: Requires a formal interchange agreement
   • Non-Owned Trailer Physical Damage: No agreement required
3. Coverage Flexibility:
   • Trailer Interchange: More restrictive, tied to specific contractual trucking operations
   • Non-Owned Trailer Physical Damage: Flexible and broad coverage, covers various scenarios and operations

If you’re primarily engaged in power-only operations, non-owned trailer physical damage is essential. Having broad protection is crucial.

However, if you operate as part of a logistics network with a written trailer interchange agreement or haul intermodal containers out of ports and railyards, you will need trailer interchange insurance.

Assess your trucking operations carefully and discuss with a licensed insurance agent to determine which coverage best suits your business. By understanding these distinctions, you can ensure that your business is covered, regardless of whose trailer you’re pulling.