Insuring your trailer is an important step to protect your investment and stay compliant with state laws. However, many trailer owners make mistakes that can leave them underinsured, paying more than necessary, or even facing denied claims. Understanding common pitfalls can help you avoid costly surprises down the road.
In this article, we’ll highlight some of the most frequent mistakes people make when insuring their trailers—and how you can steer clear of them.
1. Not Getting Separate Trailer Insurance
Many trailer owners assume their auto insurance covers their trailer, but in most cases, it does not. Standard auto policies typically cover the towing vehicle, but trailers often require their own insurance policy or endorsement. Skipping separate trailer insurance can leave you exposed to financial loss if the trailer is damaged or involved in an accident.
Tip: Verify with your insurer whether your trailer needs its own policy and get coverage accordingly.
2. Underinsuring Your Trailer
Valuing your trailer too low or opting for minimum coverage can result in insufficient payout after damage or theft. This is especially risky for high-value trailers like enclosed cargo trailers or specialty equipment haulers.
Tip: Accurately assess your trailer’s value and consider agreed value coverage or replacement cost coverage to ensure full protection.
3. Ignoring Liability Coverage
Trailer accidents can cause property damage or injury to others. Many people overlook the importance of liability coverage for their trailers, which can leave them financially responsible for costly claims.
Tip: Make sure your trailer insurance includes adequate liability limits to cover potential damages and injuries.
4. Not Disclosing Trailer Use
Failing to inform your insurer about how you use your trailer—whether personal, commercial, or rental use—can lead to denied claims or policy cancellations.
Tip: Always be upfront about your trailer’s intended use to get the right policy and avoid surprises during a claim.
5. Overlooking State Insurance Requirements
Trailer insurance requirements vary by state. Some states require liability coverage for trailers over a certain weight, while others don’t mandate trailer insurance at all. Not knowing your state’s regulations can lead to legal issues or inadequate coverage.
Tip: Research your state’s trailer insurance laws or ask your insurer to ensure compliance.
6. Skipping Security Measures
Not taking steps to protect your trailer from theft or damage can increase your insurance costs and risk. Trailers left unsecured or parked in unsafe locations are more likely to be stolen or vandalized.
Tip: Use anti-theft devices, store your trailer in secure locations, and inform your insurer about security features for possible discounts.
7. Choosing the Wrong Coverage Options
Selecting the wrong type of coverage—such as opting out of comprehensive or collision when needed—can leave you with unexpected expenses after an incident.
Tip: Review your insurance needs carefully, including coverage for damage from accidents, weather, theft, and liability.
8. Failing to Update Your Policy
Changes like purchasing a new trailer, modifying an existing one, or changing its use should be reflected in your insurance policy. Neglecting updates can result in gaps in coverage.
Tip: Keep your insurer informed about any changes to your trailer or its use promptly.
Avoiding these common mistakes can save you money, stress, and potential legal trouble when insuring your trailer. Taking the time to understand your insurance needs and maintaining open communication with your insurer ensures you have the right protection for your trailer.