How Much Trailer Interchange Coverage You Need

Interchange liability is contractual, not the $750,000 filing

The federal BIPD filing does not pay for the trailer you borrowed. The $750,000, the $1,000,000, and the $5,000,000 figures in 49 CFR 387.9 are public-liability minimums. They respond, within the policy and the MCS-90, to injury and to damage you cause to other people's property as auto liability. The trailer on your fifth wheel, when you took it under an interchange or a similar contract, is a piece of equipment you promised to return. That promise is physical damage. It is not the BMC-91.

Trailer interchange coverage, or whatever physical-damage form the contract actually names, is what the agreement is asking for. Carriers hear TI and think it is a box on the liability certificate. Sometimes the agent can add it to the auto policy. Sometimes it is a separate physical-damage line. The name on the certificate has to match a form that pays for the trailer, not a form that only raises the liability limit.

The agreement's anatomy, the indemnities and the return conditions, already has a page. The trailer interchange agreement owns those clauses. Stay here for the dollar limit and the gap.

Whose trailer, whose policy, whose deductible

The trailer belongs to the company that interchange it, often a carrier, a leasing company, or a railroad. Your policy is being asked to pay them, or to pay you so you can pay them. The deductible is yours unless the agreement says they will eat it, which they usually will not. The loss payee should be the owner, named correctly, not your factor and not the broker who posted the load.

A broker is rarely the trailer owner. Do not name the broker as loss payee because they sent the rate con. Name the party the agreement identifies. A wrong loss payee is how a valid loss turns into a delayed check and a threatened offset.

If two policies might respond, yours and the owner's, the contract decides who is primary. Assume yours is primary until the wording says otherwise. Do not assume their fleet policy will be nice about a trailer you were pulling.

A limit that does not cover the trailer is a fight

The limit has to be at least the trailer value in the agreement. A $40,000 limit on a reefer the agreement values at more than that is a gap. The gap is not theoretical. A totaled reefer is a six-figure conversation, and the amount above your limit is an invoice with your MC number on it. Use the agreement's number, not a national average this page refuses to invent.

Dry van trailers and reefers are not the same value, and a new reefer is not a ten-year-old dry van. If you interchange both, the limit has to survive the more expensive one, or you need a rule that you do not hook the more expensive one. A single low limit bought to keep the down payment pretty will be the limit on the day you hook the expensive box.

Agreed value, actual cash value, and stated amount are different settlement methods. Ask which one the policy uses. A limit of $80,000 that settles at actual cash value on a trailer the contract says is worth $80,000 can still leave you short. Match the contract's valuation, not only the certificate's big number.

Non-owned trailer versus scheduled trailer

A scheduled trailer is one on your policy declarations, usually one you own or lease long term. A non-owned trailer, or trailer interchange specifically, is the coverage for a box you do not schedule because you pick it up at a drop lot and give it back. Power-only carriers live in the second category. Owning one pup trailer does not automatically extend physical damage to every foreign trailer you hook.

Read the definition. Some forms cover a trailer in your possession under an interchange agreement and exclude a trailer you borrow informally. If the load is informal, you may have neither the contract nor the coverage. Get the agreement and the form to use the same word.

Deductibles on non-owned trailers are often higher than drivers expect. A $2,500 or $5,000 deductible against a bent landing gear is still your money. Know it before the hook, not after the yard jockey calls.

When bobtail or non-trucking does not respond

Non-trucking liability is for the truck when it is not under dispatch. It is a liability form, aimed at the bobtail accident while you are off a load, and even that description has exclusions you must read on non-trucking liability versus bobtail. A trailer on an interchange while you are under dispatch is a different policy. The bobtail policy is the wrong place to look for a smashed reefer you were pulling for a broker.

Deadhead with an interchanged trailer, on the way to the shipper, is still in the dispatch. Do not log it as personal and do not expect the off-dispatch policy to open. The interchange coverage is the one that should be in force from the moment you take possession.

Power-only without a trailer policy can still owe the trailer. The absence of a policy is not the absence of the debt. Power-only insurance requirements lists the coverages that operation actually buys. Add interchange to that list before the first hook, not after the first claim.

What to read on the agreement before the hook

Get the limit, the deductible, and who is the loss payee in writing before the first hook. A rate confirmation that says TI required with no number is not a limit. Send it back. Ask for the interchange agreement or for a written value. If they will not give a number, do not take the trailer. You cannot insure a blank.

Also read who pays for tires, who pays for the reefer unit as distinct from the box, and what happens if you drop the trailer at the wrong yard. Those clauses change the loss you are insuring. A policy that covers the trailer and excludes the reefer machinery is a gap on a temperature-controlled box. Point at it before you hook.

Photograph the trailer condition at pickup if the agreement requires it. That photograph does not raise your limit. It stops a pre-existing damage bill from being added to a limit you already set correctly. The limit is the subject of this page. Set it, then hook.

What to verify before you act

Before the hook, write three numbers from the agreement: the trailer value they state, the deductible you will pay, and the limit on your policy. If the first number is higher than the third, do not hook. If the first number is blank, do not hook. TI required is not a number. A national average is not a number this page will invent. The agreement's value is the only number that closes the gap.

Confirm the loss payee is the trailer owner, not the broker who emailed the rate con. Confirm whether the reefer unit is included or excluded. Confirm the coverage applies from the moment of possession, including the deadhead to the shipper, which is still under dispatch. Bobtail liability will not answer that deadhead. The interchange form has to be the one in force.

Power-only carriers should assume they owe the box even though they do not own it. Add the coverage before the first interchange, at a limit that survives the most expensive trailer you are willing to pull. A cheap limit bought for a dry van and then used on a late-model reefer is the gap. The agreement anatomy is on the other page. The decision to hook is the limit.

Frequently Asked Questions