If you have a utility trailer, the chances are that your standard auto insurance policy won’t cover any damages. What if an accident were to happen? Well, if you don’t have trailer insurance, you’re out of luck and have to pay for everything out of pocket. However, this is preventable. All you have to do is purchase trailer insurance, and with an experienced broker by your side, you should have no issues.
This might leave you wondering if there are additional requirements for insuring your utility trailer. There are, but we’ll break them down in our comprehensive guide. Here’s everything you need to know about insuring your utility trailer.
Does standard car insurance cover trailers?
Drivers should never assume their standard auto insurance policies cover utility trailers. Unfortunately, the reality is most basic car insurance policies do not cover damage to a utility trailer if you get into a collision. For this to happen, you need to add an endorsement to your policy or purchase a separate policy.
It’s important to note that your car insurance policy may provide partial protection under the third-party liability insurance portion. However, this is contingent on a condition: the utility trailer has to have been hooked up to a tow vehicle at the time of the accident. Although the utility trailer might be insured for liability, anything that you are towing on it will not be covered unless it is insured, such as a boat or lawn mower.
If property damage occurs while parked in your driveway, your car insurance policy will not compensate you for any damages to your utility trailer. Additionally, third-party liability insurance is the only coverage that sometimes applies to your utility trailer. You will already have this coverage because it’s illegal to drive without it.
Even if you opt into collision coverage or comprehensive coverage, an endorsement is still required to cover damage to utility trailers. If you regularly hook a utility trailer to the back of your vehicle or have one parked in your driveway, consider purchasing separate insurance for it.
Can I add my utility trailer to my home insurance policy?
The answer to this question is yes and no. It comes down to your contents coverage because you likely park your trailer in your driveway. In this case, it depends on your limit. Because trailers cost so much, especially camping trailers, it’s easy to max out your coverage limit if you want it covered under your policy. Home insurance is supposed to protect the contents of your home. If you don’t think you have enough coverage to cover if something happens to your trailer, consider increasing your coverage limit.
It’s much easier to add your utility trailer to your standard car insurance policy. It’s also more affordable in the sense that adding an endorsement costs less than increasing your home insurance coverage limit. However, your insurance broker can advise you about the best way to move forward.
Is there a difference between insuring a utility trailer and a travel trailer?
Yes, insuring a utility trailer is different from insuring a travel trailer. That’s because a travel trailer, such as an RV, is motorized. As a result, you cannot add as an endorsement to your existing car insurance policy. It’s a separate type of trailer insurance that you have to purchase. This isn’t any different from having Ontario boat insurance or Ontario motorcycle insurance.
This also means that insuring a travel trailer is more expensive. You will have to purchase a separate insurance policy because you will be driving it around rather than towing it behind your vehicle. If you need to make a claim, it will be under your RV insurance policy instead of your car insurance plan.
Is utility trailer insurance required by law?
Unlike car insurance, utility trailer insurance is not required by law. This is because utility trailers are not motorized. Instead, they are trailers towed by a motorized vehicle on the back of the car. Despite this, purchasing utility trailer insurance will protect it against unforeseen circumstances, such as theft, vandalism, collisions, fires, and more.
There are many risks associated with owning a utility trailer. All types, including enclosed trailers, open-air trailers, flatbed trailers, and landscape trailers, can be added under a trailer insurance policy. Despite this, you should ask your insurance broker about which coverage is right for you before purchasing a policy.
Why do I need utility trailer insurance?
The short answer is if you don’t have a separate utility trailer policy or an endorsement on your car insurance policy, damages will not be covered. Without an additional insurance policy or endorsement, trailer owners have to pay for damages out of pocket. This can add up quickly depending on the extent of the damage, so why take the risk?
For example, if your trailer is damaged or vandalized while parked in the driveway of your home, your auto insurance provider will not cover repair or replacement costs. Trailer insurance is a type of optional coverage. Despite this, it’s a purchase that’s worth it to protect your investment. Whether you use your trailer for personal reasons or business, insurance can help you out.
What does utility trailer insurance cover?
How much coverage you purchase is up to you, but you shouldn’t opt out of utility trailer insurance if you can’t afford repair or replacement costs out of pocket. Similar to car insurance, you get to choose your coverage limit and which types of coverage to include with your policy.
There are many types of coverage available. It’s important to weigh your options before coming to a decision. If you have an auto policy, you will be familiar with these types of coverage. Let us break them down for you:
Collision coverage
Collision coverage protects the policyholder if they get into an accident with another vehicle or object on the road. Accidents happen, and with this type of coverage, it doesn’t matter who was at fault for the accident. The collision coverage section of your trailer insurance policy allows you to get reimbursed for the costs of repairing a damaged vehicle, such as a utility trailer.
Comprehensive coverage
Comprehensive coverage is helpful for drivers of all vehicles. That’s because it offers a wide range of protection. The difference in having comprehensive coverage is it protects against circumstances besides collisions. For example, if you include comprehensive coverage with your utility trailer policy, it will be protected against theft, vandalism, water damage, fire, and more.
Third-party liability coverage
Third-party liability coverage is legally required when it comes to auto insurance. It isn’t when you buy trailer insurance, but it can still be helpful. It will protect your utility trailer while hooked up to your tow vehicle on the road, but it will not protect it when parked. That’s why you should include third-party liability coverage should also be included with your utility trailer endorsement or policy.
Accidents happen. If someone injures themselves when using your trailer, you could be subject to a lawsuit. However, third-party liability coverage can help you pay for court and legal fees if someone sues you. To avoid potential accidents, you should follow our safe driving trips.
This type of coverage also helps pay for medical expenses associated with bodily injuries or the repair of damaged property. It can also provide compensation for applicable legal fees and settlements up to the coverage limit. However, you should consider adding accident benefits coverage to your policy in case you incur injuries as a result of the accident.
What if I use my utility trailer for my business?
You might also opt into a standalone policy if you use your trailer to transport goods for your business. The other more appealing option is adding your trailer as an endorsement on your commercial car insurance policy. You will often see this type of coverage called the following in the business world:
- Cargo trailer insurance
- Dump trailer insurance
- Utilitytrailer insurance or endorsement
Before making assumptions, you should speak with your insurance broker. It comes down to your coverage limit and policy, but most of the time, the policy only covers damage or theft. In the end, it comes down to the types of coverage you purchase.
You should also determine whether you need to licence your utility trailer. Some provinces require this process if you are using your trailer for business purposes. In other words, insurance will be mandatory, and the trailer must pass a safety inspection before you take it on the road.
Contact BrokerLink today!
Are you ready to protect your utility trailer? BrokerLink can help. We are your local car insurance experts here to help you find the right policy for your needs. We offer various coverage options and can help you choose the best policy for your budget and needs. Our team advocates for you and will help you every step of the way.
Whether you’re looking for car insurance in Toronto or looking to add an endorsement to your existing policy, we’re here to help. Call or email, and one of our insurance agents will be happy to assist you! We can’t wait to hear from you.
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