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UPDATED: Apr 23, 2016
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Car insurance not only covers the vehicles listed on the policy, but also additional vehicles that are defined in the policy booklet.
When you borrow a vehicle, rent a vehicle, buy a new vehicle, trade your vehicle in, or tow a trailer, each vehicle is covered even though it may not specifically be listed on the declarations page.
There is a lot of confusion around what types of trailers are covered and what they are actually covered for. Read this guide to your insurance and trailers so that you know whether it is time for an additional trailer insurance policy.
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What does your auto insurance cover?
While your auto insurance does extend to some trailers that are registered to one or both of the named insureds, a standard personal car insurance policy provides only partial protection.
Only some types of trailers are covered under the standard policy, and a majority of insurance providers will extend coverage for liability damages only.
You will need to review your policy information or speak with your agent to verify that your vehicle insurance policy has the same rules as most products sold in the nation today.
Types of Trailers Covered By Your Auto Insurance
There are several types of trailers that you can purchase for personal use.
Some trailers are covered under your car insurance and others are not. It is important to distinguish between the covered recreational vehicles and the options that require their own policy altogether.
Here is a breakdown of the types of recreational trailers that you can buy that will be partially covered under your car insurance:
- Flatbed Trailers
Trailers that are designed to haul various types of cargo are called flatbed trailers. Smaller models can be towed with your own personal Class C license. These are covered by liability insurance when the trailer is registered in your name.
- Pop-up Trailer
The pop-up trailer is an inexpensive recreational vehicle that folds for convenience and easy towing. Since the trailer is relatively small, a pop-up trailer can be towed by a mid-sized vehicle or SUV.
- Fifth Wheel Trailer
A fifth wheel trailer offers living space and a bi-level floor plan. There will be a bedroom area, a separate living area, a dining area, and a bathroom.
The fifth wheel has all of the amenities that are found in a motorhome without the motor. You can choose models in lengths between 21 feet and 45 feet.
Since the fifth wheel trailer is towed behind a private passenger SUV or truck, liability coverage will extend to the fifth wheel.
- Travel Trailer
Like a fifth wheel trailer, a travel trailer is a larger option that includes a full bath, kitchen and bedroom for comfortable vacationing, much like a motorhome.
Since the trailer connects to a hitch of a vehicle that is capable of towing, it is covered while hitched to the vehicle for liability coverage.
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Types of Recreational Vehicles Not Covered as a Trailer
Aside from the requirement that the trailer is owned by a named insured, the only other requirement is that the trailer is being towed by a listed vehicle on the policy.
Recreational vehicles that are not towed behind a personal car or truck will not receive the liability coverage extension.
Since these are typically Class A and Class B motorhomes, they will require their own specialty RV insurance.
How will liability coverage protect you when towing an owned trailer?
Not only are there risks when towing a trailer, the average damage caused in an accident with a hitched trailer is higher than the average damage reported in the standard accident.
This is why it is important to understand how your liability insurance works.
The likelihood of having an accident is much higher when you are towing a trailer.
Liability coverage consists of both Bodily Injury Liability and Property Damage Liability. Bodily Injury, which will be written on your declarations page as BI, will pay for the expenses to treat third-party injuries and to pay for other final expenses if a person dies.
The policy will only pay up to the per person and the per accident limits stated on the contract.
Property Damage pays to repair property that is damaged when you do not own it. The limits apply to all of the property damaged in the accident and not to each vehicle.
How much liability is enough?
Due to the fact that you are exposed to more risk when you are towing a trailer, you may need to raise your limits before you hit the road.
You are only required to carry as much liability insurance as is required by the state officials, but these state minimums are never enough.
You will need to discuss your budget, your assets, and your needs when you are raising the limits to make a decision. It is recommended that you carry no less than:
- $100,000 per person
- $300,000 per accident
- $100,000 in property damage
How can you get coverage for physical damage on your trailer?
Your personal liability insurance extends to a towed trailer, but physical damage on the policy does not.
For named insureds who own trailers that do not hold much value, liability insurance may be enough. For the owners of valuable, expensive or financed trailers, physical damage is a must.
To get coverage, you will need to purchase a separate recreational vehicle insurance policy.
Coverage under a recreation vehicle policy will protect the trailer and also your belongings that are hauled inside of the trailer. The policy will include comprehensive and collision cover with deductibles of your choice.
If you live in the trailer, you will also need personal liability coverage that would normally be afforded on a residential insurance policy.
Be sure to compare different plans before you make any decisions.
Whether you are shopping for a new trailer or you have a trailer you have been towing uninsured, it is time to price coverage.
Trailers will be protected for liability losses as well as damage losses when you buy an RV policy.