2013 - 1st Quarter

How Insurance is Applied to Trailers in Various Situations

By Michelle Fletcher, Sr. Fiscal Analyst

Trailer

Most people have experience with choosing insurance for licensed vehicles through their personal cars. By law a motorized vehicle must have Liability insurance to cover any damage done to another vehicle, property or individuals. In addition, you can elect to add Comprehensive/Collision insurance to cover physical damage resulting from comprehensive (fire, wind, theft, etc.) and collision damages that may occur to their own vehicle too.

Utility Trailers, while they are licensed, are not motorized vehicles and therefore do not fall in the same category. Trailers are technically considered “property” and are covered under the University’s property insurance as an asset. However, it is possible to add Comprehensive/Collision coverage to a trailer. There are few exceptions involving equipment trailers such as generators and electric billboard signs which would not be eligible for the additional Comprehensive/Collision coverage. For questions on a specific trailer please call the RIM office for clarification. No Trailer

To get an idea on how insurance for a University owned trailer might look in a given situation let’s take a look at some common scenarios below:

Scenario 1

A University trailer is being pulled behind a University vehicle and the driver backs into another vehicle with the trailer damaging the other person’s vehicle and the University trailer.

  • The responsibility or liability for the damage done to the other vehicle is covered under the Liability insurance of the University vehicle subject to a $500 deductible.  In other words, liability follows the vehicle that causes the damage.
  • The responsibility for the physical damage to the University trailer is tied to the insurance type on the trailer.
    • If the trailer is enrolled in our Comp/Collision coverage program the damage would be covered and be subject to a $500 deductible.
    • If the trailer was not enrolled in the elective coverage of Comp/Collision the damage would be covered under Property insurance subject to a $1,000 department deductible.

Scenario 2

A University trailer is sitting in a parking lot and rolls down a hill and damages someone else’s vehicle or property.

  • The responsibility or liability for the damage to the other vehicle or property would fall under the University’s General Liability Insurance.
  • Physical damage to the University trailer that rolled down the hill would be covered under the University’s Property insurance subject to a $1,000 department deductible unless it’s enrolled in Comp/Collision insurance program. Then the damage to the trailer would be covered under Comp/Collision subject to the $500 deductible.

Scenario 3

A University trailer sitting in a parking lot is destroyed by a tornado.

  • The physical damage to the University trailer is covered under our Property Insurance subject to a $1,000 department deductible unless it’s enrolled in the elective Comp/Collision coverage. Then the damage would be covered under Comprehensive coverage subject to a smaller $250 deductible.

Things to consider when thinking of adding Comp/Collision insurance:

  1. Replacement value of the trailer – if the trailer was damaged could the department afford to absorb the $1,000 department deductible to replace or repair the trailer?
  2. Is it cost effective to purchase the additional Comp/Collision insurance for the lower deductible?
  3. How long do you plan to own the trailer?
  4. What is your volume of usage for the trailer?
  5. Is your trailer stored in a secure location?

Lift Trailer

While we’ve touched on just a few examples here, we hope these provide some insight on insurance for the University’s fleet of approximately 283 trailers. If you have specific questions on a trailer in your department please contact our office at 882-8100.

 

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This entry was posted in 2013 - 1st Quarter.

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