Trailers are a necessity for many people. You might tow a boat or an ATV behind your personal vehicle, or you may use a utility trailer to haul yard waste or other items from place to place.
Business owners have all kinds of reasons to use trailers, too, from hauling equipment, machinery, or livestock, to heavier industrial uses.
Whether your trailer is for business or personal use, it needs to be insured. If you get into an accident, you need trailer liability insurance to make sure you can pay for any damage or injuries you cause.
But how you insure your trailer depends on the type of trailer you have, how you use it, and any state and insurance company requirements that you must follow.
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What Is Trailer Liability Insurance?
Accidents involving vehicles that are towing trailers are not uncommon. Trailers are often large and heavy, and can cause serious property damage and injuries when they collide with other vehicles or objects.
Misjudging turns, colliding with objects while backing up, and clipping other cars while changing lanes are very common trailer mishaps.
If you injure someone or cause damage to their vehicle or property with your trailer, you will need trailer liability insurance to help you pay for damages, medical expenses, and legal fees resulting from the accident.
Trailer liability insurance protects your personal assets if you cause injuries or damage with a boat trailer, horse trailer, fifth-wheel RV, utility trailer, or any kind of trailer you use with your personal vehicle. It can also cover legal fees if you are sued for causing an accident.
If you are a business owner, commercial trailer liability insurance protects your business assets if you are at fault for an accident in which your trailer causes harm to other persons or property.
It is important to remember that trailer liability insurance only pays for damage your trailer causes to other people or property. It does not pay for damage to your own trailer or its contents.
Personal trailer liability insurance is often included in the auto or truck insurance policy for the vehicle that is towing the trailer. Commercial trailer liability insurance is included in your commercial auto insurance.
When you purchase a new trailer for business or personal use, you should review your coverage with your insurance company, or contact an independent agent.
How To Tell If You Are Covered for Trailer Liability
If you use a trailer with your personal vehicle, your personal auto insurance policy likely extends liability coverage to your trailer in some way. But you need to be sure exactly how your policy works.
Most personal auto insurance policies extend liability coverage to a trailer that you are towing if you own the trailer and it is being pulled by an insured vehicle at the time of an accident. But state requirements and insurance policies vary, so it is always best to check with your insurance agent or carrier to be sure.
Some insurance companies might require your trailer to be listed on the declarations page of your auto insurance policy in order to be covered, or you may need to purchase a separate endorsement.
And remember, if you want coverage for damage to your own trailer and its contents, you will need to purchase additional comprehensive and collision coverage specifically for the trailer. Damage to your trailer and the items in it is not covered by your auto insurance policy.
Trailers that are used for commercial purposes must be covered by commercial auto insurance. You cannot cover a trailer that is used for business purposes with a personal auto insurance policy. The liability portion of your commercial auto insurance provides some protection for commercial trailers.
But you might need higher liability limits or additional coverage depending on the type of trailer you have. And if you want to protect your own trailer or cargo, you definitely need to purchase additional trailer insurance.
What Does Trailer Liability Insurance Cover?
Trailer liability insurance provides coverage for the following, up to the policy’s limit, in a covered collision:
- Property damage liability: If your trailer strikes another vehicle or object and causes damage to another person’s property, this coverage will provide compensation to that person or business.
- Bodily injury liability: If your trailer is responsible for injuries to another person, your policy will cover their medical expenses related to the covered accident.
- Legal fees: If you are sued for causing an accident that has harmed another person or another person’s property, your trailer liability insurance will reimburse you for your defense costs and other legal fees.
Both commercial and personal trailer liability insurance will offer similar types of coverage. But there may be different or additional insurance requirements for commercial trailers depending on the type of trailer and how it is used.
Be sure to discuss coverage requirements with your insurance agent so you have the protection you need for all of your commercial trailers.
Do You Need Personal Trailer Liability Insurance?
If your trailer use is strictly personal, you are not required by law to specifically insure your trailer. The state-mandated liability insurance for your vehicle will extend to your trailer.
If you want to cover the trailer itself and the items inside it for damage, theft, and more, then you will need to purchase an endorsement on your auto insurance policy, or a separate trailer insurance policy.
Do You Need Commercial Trailer Liability Insurance?
All states require commercial trailers to be registered with the state and have valid liability insurance.
Commercial auto policies extend some liability coverage to commercial trailers, but specific insurance and licensing requirements vary by state, depending on how the trailer is used, and sometimes on its weight and hauling capacity.
If, for example, you use a utility trailer for your landscaping business, the liability insurance requirements for your trailer will be much less extensive than for a business owner who uses a car hauler or a heavy-duty flatbed trailer.
Because they are inherently more dangerous to other drivers on the road, you may be required to purchase higher liability coverage limits for bigger, heavier commercial trailers.
In order to cover the trailer itself and its cargo, you will need to purchase a customized trailer insurance policy. You can purchase commercial trailer coverage for a variety of trailers, including travel and utility trailers, concessions trailers, auto haulers, horse or livestock trailers, flatbed trailers, and more.
The type of coverage you need for your commercial trailer will depend on the make and model of the trailer, the types of materials that you carry, the annual mileage, where the trailer is kept, how far it travels, and the ages and driving records of your employed drivers.
Is Trailer Liability Insurance Expensive?
Many factors can affect the cost of your trailer liability insurance coverage, such as:
- Whether your trailer is for personal or commercial use
- The size of your trailer
- What you will be towing
- Where and how frequently you will be using your trailer
- Your driving record
- Your chosen coverage limits
- Your chosen deductible
- The insurance company you choose
For the most part, however, you can expect a basic trailer liability insurance policy to be very affordable when added to a personal car or truck insurance policy. On average, people spend about $75 a year for this added coverage.
For commercial purposes it will be more, and the costs will depend on additional factors, such as whether the coverage is added to a larger commercial insurance portfolio or purchased separately.
How Can I Get the Best Deal on Trailer Liability Insurance?
If you want help finding additional options and discounts, an agent can help.
One of these agents, right in your local area, can help you get the information you need. Independent agents are not affiliated with any one company, so they can gather several competitive quotes that might work for your needs.
These agents are devoted to helping clients find the right coverage at the right price. Find a local agent today and learn more about trailer liability insurance.