Physical Damage insurance for trailers being hauled under a trailer interchange agreement is provided by Trailer Interchange insurance. This is essentially physical damage insurance for trailers that are not owned. If the trailer is destroyed by collision, fire, theft, explosion, or vandalism, this insurance will cover you.
Because the traded trailers are not your property, they require separate insurance coverage that is not covered by your standard Physical Damage policy.
What is trailer interchange coverage a part of?
Trailer Interchange Insurance is a type of coverage available under the truckers or motor carrier policy forms that covers the insured’s legal liability for damage to other people’s trailers. By endorsement, coverage is also provided under the business auto policy (BAP).
Author: Winston Price, Sales Executive
It is normal practice for trucking businesses to employ trailers that belong to others in their daily operations. While non-owned trailers are protected under your car liability policy while hitched to your insured vehicle, damage to the non-owned trailer is not. Physical damage coverage can be extended to an insurance policy in two ways: by adding a non-owned trailer to your vehicle list or by adding Trailer Interchange coverage to your policy.
Coverage for a non-owned trailer attached to a covered (or scheduled) power unit is called non-owned trailer coverage.
It is critical that the maximum value of any trailer you intend to utilize be specified on the policy as the non-owned trailer’s worth.
It’s critical to remember that when covering a non-owned trailer in this manner, coverage is limited to when the trailer is connected to a covered (scheduled) power unit.
Trailer interchange covers all obligations for damages while in the carrier’s custody, but it necessitates the existence of a signed agreement.
This means that at the time of the loss, the trailer does not have to be connected to a covered power unit.
If you have this coverage on your insurance policy, it will cover both direct and accidental losses to your trailer.
The Non-Owned Trailer coverage only responds when the trailer is coupled to a covered (scheduled) power unit, which is one of the most noteworthy contrasts between these two coverages.
You may have a coverage gap if you are still responsible for that trailer after your covered unit is no longer tied to it.
In the case of Trailer Interchange, coverage would be in effect only if a signed interchange agreement was in existence.
What is an interchange agreement?
Current federal employees in the excepted service can apply for merit promotion jobs in the competitive service under an interchange agreement.
If you meet the following criteria, you are entitled to apply for a merit promotion job in the competitive service:
- You’re currently employed by the federal government in the exempted service (serving on a permanent appointment, not time-limited).
- Your agency and the agency where you intend to apply have an interchange agreement.
How does trailer interchange work?
If you have a trailer interchange agreement, you’ll need Trailer Interchange insurance to safeguard yourself while in possession of a container or trailer that isn’t yours.
A trailer interchange agreement is a contract that specifies how a trailer will be transferred from one trucker to another to complete a transport. Typically, the trucker in possession of the trailer is accountable for any damages that occur while the trailer is in his or her control.
What is GL limit?
The maximum insurance limit payable during any given annual policy period for all losses other than those occurring from specified exposures is known as the General Aggregate Limit.
What is a bailee form in insurance?
A bailee is a business owner who temporarily takes custody of someone else’s property. Any damages that occur while the property is on the business premises or in transit to and from it are covered by Bailee customer insurance.
What is the primary difference between the truckers coverage form and the Motor Carrier Coverage form?
The majority of cargo and freight shipments in the United States are handled by trucks. Contract carriers or common carriers can transport goods in owners’ vehicles. For these cars, the Insurance Services Office (ISO) offers three distinct coverage options. The Business Auto Coverage Form can be utilized in any of the three scenarios, but it is most commonly used when business owners transport their own items in their own automobiles. Contract carriers can use either the Business Auto or Motor Carrier Coverage Forms, but not the Truckers Coverage Form, while common carriers can use any of the three forms. The Truckers and Motor Carrier Coverage Forms offer coverages that are not available on the Business Auto Coverage Form.
The ISO Truckers Coverage Form CA 00 12 is meant for truckers moving products for a charge while operating on established routes or in territory permitted and regulated by a government regulatory authority. This form was created prior to the liberalization of the motor vehicle industry. Today, it is largely utilized by common carriers.
The CA 00 20 ISO Motor Carrier Coverage Form is tailored to the present regulatory environment. The alteration in the interaction between carriers and their consumers was a crucial component of deregulation. This form encourages more negotiation when it comes to negotiating shipping contracts. It clarifies who is an insured using contracts and other written agreements between the parties rather than regulated trucking jargon, making it adaptable to practically any carrier-for-hire circumstance.
Between the Trucker/Motor Carrier and the Business Auto forms, there are three main differences:
1. What Is An Insured Person? This is an area where there are significant differences in coverage, which is one of the reasons why truckers and motor carriers require their own form. Both the motor carrier and truckers forms can add and delete participants in addition to the entities specified as insureds on the Business Auto form. Owners of rented vehicles are one example. The trailer owner becomes an insured if a non-owned trailer is utilized exclusively for the named insured’s business or if the trailer is connected to a covered vehicle. In another situation, if the insured leases a non-owned vehicle other than a trailer without a hold harmless agreement to benefit the named insured, the lessor of that vehicle becomes an insured as well.
Any carriers that meet their financial responsibility duties in methods other than employing liability insurance, or that do not have insurance on hired autos for the principal protection of the vehicle owner, are not included in the Truckers and Motor Carrier forms. Additionally, when a covered trailer is loaded, carried, or unloaded and is not attached to the power unit, rail, water, and air carriers helping in the transfer of automobiles are not insured.
2. Additional Insurance Clause The principal liability coverage is provided by the party who owns the vehicle under the Business Auto form. Because truckers and motor carriers frequently hire independent owner/operators, these particular forms stipulate that the insured’s coverage is primary and the hired vehicle’s coverage is excess. When the insured leases a vehicle to another motor carrier, the insured’s coverage is additional to the coverage offered by the hiring carrier. The insured must be working under regulatory authority in order to be covered under Truckers coverage. Contracts between the parties establish the relationship and responsibilities under Motor Carrier coverage.
3. For the specialized Trucking forms, Trailer Interchange is the physical damage analogue of the Other Insurance Clause. When a non-owned trailer and its equipment are in the care of, or utilized by, the insured, the insurer agrees to pay amounts for which the insured becomes liable as a result of damages to the trailer and its equipment.
Regulation vs. contract is the fundamental distinction between the Truckers Coverage Form and the Motor Carriers Coverage Form. The Truckers Coverage Form refers to the insured’s business as a truck driver and the operating permissions issued by a government agency. The Motor Carrier Coverage Form examines the contractual relationship between the insured and its clients rather than the operation or operating rights granted by a public entity.
The underwriting and grading process is based on a set of well-known criteria. Because it applies to trucks that regularly drive more than 200 miles from their primary garaging location, zone rating is distinctive and essential. These vehicles are classified as “long-haul,” and their ratings are determined by the metropolitan or geographic “zones” through which they travel. This is a well-established zone structure based on travel origin and destination points. Of course, drivers are always the most crucial component, and they are the most scrutinized and feared.
Please keep in mind that this is just a sample of the coverages accessible through these programs. The Rough Notes Company, Inc.’s PF&M Analysis offers a broader and more in-depth treatment of these and other related topics. For thorough evaluations, discussions, and more information on these and other related matters, Agency OnLine customers can turn to PF&M Sections 220.4-2, Business Auto Coverage Form Analysis, 223.4-2, Truckers Coverage Form Analysis, and 224.4-2, Motor Carrier Coverage Form Analysis.
Does TSA have an interchange agreement?
The Office of Personnel Management (OPM) has developed an Interchange Agreement that allows most permanent TSA workers to apply for vacancies in Competitive Service agencies and be considered for those positions. OPM information on this and other Interchange Agreements can be found at http://www.opm.gov.