Trailer Interchange vs Non-Owned Coverage: What Every Truck Owner Needs to Know
You do not always haul your own
trailer. Whether it is a swap, a rental, or a quick pull for a broker or power
only load, you are often running equipment that does not have your name on the
title. And the second you hook up? You are on the hook for the damage.
But here is the part that trips up
a lot of truckers: just because you have coverage for someone else’s trailer
does not mean you are actually protected.
Let’s break down the difference
between Trailer Interchange Coverage, Non-Owned Trailer Physical
Damage Coverage, and the reason rented or leased trailers need to be
added to your policy to be fully protected.
What is Trailer Interchange
Coverage?
Trailer Interchange Coverage (TI) protects
you when you are pulling someone else’s trailer under a formal interchange
agreement (contract in writing). This is usually written into a bill of lading
or contract that transfers responsibility to you while the trailer is in your
possession.
If you damage the trailer while it
is under your control, this coverage pays for:
- Collision (like overturns or hitting another object)
- Comprehensive losses (theft, fire, vandalism, and
more)
The key requirement is a written
agreement. Without that contract in place, you do not have coverage under this
form.
From the policy:
We will pay damages for property damage for which you become legally
responsible because of loss to a trailer not owned by you, and its equipment,
while in your possession under a written trailer or equipment interchange
agreement.
If you are doing a trailer swap
and the agreement says you are responsible, this is the coverage that responds.
What is Non-Owned Trailer
Physical Damage Coverage?
Non-Owned Trailer Physical Damage
Coverage (NOPD) applies to trailers you do not own and are not using under an
interchange agreement. Think broker supplied trailers, short term rentals, or
borrowed units for one-off hauls.
It covers:
- Collision (like overturns or contact with another
object)
- Comprehensive losses (fire, theft, vandalism, weather
events, and more)
From the policy:
We will pay damages for property damage for which you become legally
responsible because of loss to a trailer not owned by you, and its equipment,
while in your possession.
But there is one critical
condition: the trailer must be physically attached to your insured tractor
at the time of the loss.
If the trailer is:
- Dropped at a dock
- Parked at a lot
- Being moved by someone else
Then Non-Owned Trailer Physical
Damage does not apply.
This is a key difference from
Trailer Interchange. Just having possession or a contract is not enough. The
trailer must be hitched to your truck (power unit) for the coverage to be
active.
Rented or Leased Trailer? You
Still Need to Schedule It
Yes, Non-Owned Trailer Physical
Damage can apply to rented or borrowed trailers, but only if all of the
following are true:
- You are legally responsible for the trailer
- It is in your possession
- It is physically attached to your insured power unit
Even then, coverage only applies
if you have the endorsement on your policy with active limits and deductibles
shown on the declarations page.
If the trailer is dropped, idle,
or stored somewhere without being attached to your truck, you are NOT
covered under this form.
That is why you must list rented
or leased trailers on your policy. Most insurers require you to schedule the
trailer if:
- You are leasing it longer than a few days
- Your rental agreement requires a specific coverage
amount
- You are responsible for more than just liability
Let your agent know:
- The trailer's VIN or equipment ID
- The name of the rental or lease company
- The length of time you will have the trailer
Even with both coverage types in
place, your insurer will not pay if the trailer was not listed or was sitting
unattached when the loss occurred.
Why Hired Auto Physical Damage
Does Not Cover Trailers Automatically
We hear it a lot. Customers assume
that Hired Auto Physical Damage will cover any trailer they rent or
borrow. And they are wrong.
Hired Auto PD is designed to cover
rented or borrowed vehicles, including trailers, but only when that
trailer qualifies as a hired auto on your policy.
It does not replace Trailer
Interchange or Non-Owned Trailer Physical Damage.
It does not apply to a dropped trailer.
And it does not cover you unless the trailer itself is part of the hired auto
agreement and is actively being hauled by your scheduled power unit.
If you walk away from the trailer,
leave it parked at a yard, or forget to list it, you are out of luck.
So if someone tells you hired auto
covers “whatever trailer I’m pulling,” just know that is not true unless the
policy has been structured to do exactly that. And it almost never is.
Do Not Forget These Policy
Details
Both coverages include:
- Defense and settlement of lawsuits related to damage
- Reimbursement for towing and return of stolen
trailers
- Exclusions for wear and tear, tire damage, war, and
nuclear events
But they also come with limits:
- The most they will pay is the actual cash value, cost
to repair, or your declared limit
- Deductibles apply and only one deductible will be
used per incident
- If the trailer is a total loss and not properly
listed, you could be left paying out of pocket
Neither Trailer Interchange nor
Non Owned Trailer Coverages will cover an unscheduled power unit.
Final Take
Pulling someone else’s trailer?
You are not automatically covered. Trailer Interchange and Non-Owned Trailer
Physical Damage solve different problems, and both have strict conditions.
Ask yourself before you hook:
- Is there a written agreement?
- Is the trailer physically attached?
- Is the trailer scheduled on my policy?
- Am I relying on hired auto for something it does not
actually do?
Because if something happens and
you are not set up right, your insurance carrier will not write the check. You
will.
Questions about trailer coverage or what your policy actually includes?
Email us anytime at info@trucku.biz — we’ll break it down for you, no pressure and no jargon.
Disclosure:
This post is for educational purposes only. It’s not legal advice, insurance advice, or a substitute for calling your agent. We’re good, but we’re not psychic. Policies vary, laws change, and courtrooms get weird. Don’t make decisions based solely on something you read on the internet, unless it’s from us, in writing, with your name on it.
All opinions are our own and do
not represent the views of any carrier, employer, or underwriting department
that occasionally wishes we were quieter on LinkedIn.
