Car Insurance for Trailers

Car insurance for a trailer is separate from personal car insurance and has its own requirements. Types of trailer coverage include (1) loan balance, (2) total loss, and (3) basic liability.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jan 22, 2021

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Here's what you need to know...

  • No matter what, a trailer is a liability and insurance is essential
  • There are all sorts of insurance you can choose from for a trailer, not even counting the benefits from doing so
  • Many unknowns on the road exist that can cause an accident; protect yourself and others by getting insurance

Whether you’re going on vacation or just helping a friend move across town, the minute you attach a trailer to your car, you become a liability. Even if you are operating someone else’s vehicle with an attached trailer, it is important to know what your role will be if you get into an accident.

Not everyone needs car insurance with trailer coverage protection, but this guide will help you figure it out.

If you have ever rented a trailer from a moving company, you probably noticed that the sales person urged you to get an insurance policy that would cover damages to the trailer itself. In fact, many rental car insurance companies have strict policies in place that require you to provide proof of insurance if you opt out of purchasing a policy.

It may seem extreme, but operating a car with a trailer attached can be quite a risk. Unless you are a very experienced driver that is used to hauling heavy loads, you will not be able to predict when or how a trailer will cause issues. If the trailer isn’t attached properly or the connecting parts break, other drivers can be hurt.

Even seasoned drivers can inadvertently put others at risk when hauling a trailer.

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Types of Car Insurance with Trailer Coverage

There are several different types of car insurance that offer trailer protection:

  • Loan Balance Insurance – If you have a loan payment that is due on your trailer, in the event of unrecoverable damage, you can be compensated.
  • Total Loss Insurance – These policies cover both the contents of the trailer and the trailer itself, although calculations will be based upon product depreciation rates.
  • Contents Insurance – In the event that the trailer is damaged or its contents are lost, this policy will provide coverage.
  • Liability Insurance – This is the most basic coverage available that will still pay for any damages you may cause to another party.
  • Accidental Insurance – Regardless of if you are driving or not, accidents like fires, theft, and other natural disasters can occur.

You will need to have, at the least, a policy with minimum liability insurance on your trailer, but getting more is definitely worth the consideration.

When thinking about your total loss, accidental and contents insurance, ask yourself:

  • How much is your trailer worth?
  • What kind of items are you hauling?

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Benefits of Insuring Your Trailer

  • Roadside Assistance – If you breakdown with a trailer attached to your vehicle, having roadside assistance will get you to your destination much faster.
  • Lessened Chance of Litigation – When trailers cause damage to persons and property, you can be sued if you don’t have the proper coverage.
  • Faster Recovery – If your trailer does indeed get damaged, you can get it fixed and ready to go much quicker than normal.

Car Insurance Trailer for Business

While many people only use trailers to move from one residence to another, many business owners may travel with a trailer up to seven days a week. In inclement weather conditions, trailers are especially prone to having mechanical failures. Erratic drivers can miscalculate tricky maneuvers, putting both you and your livelihood at risk.

If a trailer malfunctions, the car that is hauling it can become severely damaged. The entire rear fender of your car may become bent or completely ripped off. In some extreme cases, the actual frame of your car can be damaged if the trailer tailspins and collides with your vehicle.

Trailers that completely detach from a car can cause severe damage to drivers. A “runaway” trailer could be lost forever. As well, if you have, for instance, tools, important documents, or other merchandise in your trailer, your business could be severely damaged.

Having commercial car insurance with a trailer coverage policy will keep your business afloat.

Contents insurance policies offer great protection for various items, but what if you’re hauling live freight? Race horses are driven from destination to destination in trailers, often on open highways.

As much as it is scary to think that something could happen in this instance, the reality is that animals cost money, too. If your animal becomes injured, the bill for a veterinarian can be incredibly high without the right type of coverage.

Natural disasters happen in a split second. They can leave you with no opportunity to secure prized possessions. After the initial shock, the recovery process is often more traumatizing than the original disaster.

You may think that you will save a significant amount of money by passing on a more comprehensive policy, but, trust us, you don’t want to leave yourself open to chance. When it comes to a car insurance policy with trailer coverage, there is no right or wrong answer, so long as you get adequate coverage.

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